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Top vs. Other PPC AdWords: CTRs Drop, Costs Per Conversion Climb

mackey-melissa
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Google AdWords gave us PPC data junkies a great new way to segment data in July. Dubbed “Top vs. side,” this segment broke out performance data for ads appearing in the top spot, above the SERPs, vs. ads appearing on the right side of the page.

PPC marketers across the web were quick to comment on what the change meant for them in terms of performance data analysis (here, here, and here). The data confirmed what most of us already suspected: ads at the top have a much higher click-through rate (CTR) than ads on the side.

Then, a couple of weeks ago, Google started showing PPC ads not only at the top and side of search results, but at the bottom too. While this move was new for Google, it’s not new for PPC: Yahoo routinely shows ads at the bottom of the SERPs. Still, some PPC pros were concerned about how their ads would perform at the bottom of the page – despite the fact that Google claims higher CTR as the reason for displaying ads at the bottom of the page.

But is that really true?

Well, Google isn’t telling us: side and bottom ads are combined into an “Other” bucket in the AdWords reports:

adwords-top-vs-other

OK, fair enough – but I was still curious whether ads at the bottom of the page really get a higher CTR than ads on the side.

So I decided to take a look at performance data for our clients before and after the addition of ads at the bottom of the page. The data is very interesting.

Let me preface the rest of this discussion with a couple of caveats:

  • While I looked at data across all of our agency’s PPC clients, this isn’t intended to be a representative sample across the PPC universe. Your mileage may vary! 
  • The data covers a span of time during which other optimization activities were taking place. For instance, ad groups may have been paused or activated; bids were changed, ad tests started, etc. While reviewing data across clients should normalize much of this variance, it’s not perfect. 
  • The addition of bottom ads is new. That means that other factors, such as seasonality, might be at play.

OK, now that we’ve gotten that out of the way, let’s look at the results.

The Bad News

First, I wanted to see if Google’s claim that CTR is higher for bottom ads than for side ads was really true for our clients. Since side vs. bottom data isn’t broken out, I compared CTR for the “other” segment before and after the addition of “bottom” to the “other” bucket. I also looked at top ad performance to try to gauge how much of the change was due to seasonality or other factors unrelated to the addition of bottom ads.

Here’s what the numbers look like:

top-other-ctr-before-after-adwords

While CTR for top ads decreased slightly, “other” ads decreased a lot. Four times as much as top ads, to be precise. So much for the “higher CTR” claim.

The Good News

I also looked at conversion rates before and after the addition of “bottom” ads. This data is somewhat encouraging, at least for “Other” ads.

top-other-conversion-before-after-adwords

While “other” ads clearly convert worse than top ads (which I think we all knew already), conversion rates for these ads are actually up slightly, while conversion rates for top ads are down.

This bodes well for the conversion rate of “Other” ads: it appears that conversion rates are trending upwards.

More Bad News

Finally, I looked at cost per conversion before and after the bottom ad launch. This is where it gets downright ugly.

top-other-cost-conversion-before-after-adwords

Ouch. While cost per conversion for “other” ads stayed the same, it’s up 11 percent for top ads. This is a direct function of the lower conversion rate; cost per conversion for top ads were actually down a bit following the addition of bottom ads.

However, costs for “Other” ads were up slightly following the change. This means that the improved conversion rate for “Other” ads is offset by a higher cost per conversion – so the whole thing is ultimately a wash. Bottom ads are essentially the same as side ads.

What It All Means

In all likelihood, absolutely nothing. Although this is a large data set across multiple verticals and clients, we can’t take seasonality out of the equation yet – the change is too new to draw a final conclusion.

Conversion rate might be down because of increased competition leading up to the holidays, rather than because bottom ads don’t perform as well. It’s likely that this trend will correct itself in January.

I’m feeling less confident about the CTR variance, though. We all know that the CTR on non-top ads is terrible compared with CTR on top ads. But the fact that CTRs have declined so sharply following the addition of the bottom ads is concerning.

The bigger question is why are conversion rates down for top ads? Is everyone gunning for the top position now more than ever, killing conversion rates across the board?

Are serious shoppers actually going through all the search results and ultimately clicking and converting on the ads at the bottom of the page? Or is it all bogus because it’s too early to tell?

What does your data look like? Do you think it will right itself after a few months?


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