Has PPC Ad Position Been Reduced to a Simple Race to the Top?

5-arrows-upThere was a time when the conversation of PPC ad position was relatively straightforward. You ranked what you ranked, as long as it was on the first page of the SERPs, and you optimized to your goal KPIs.

Oh, how times have changed.

As each year passes, and as each new Google AdWords feature goes live, the importance of ranking in the top 3 becomes more evident.

It would seem that in the discussion of ad position, the conversation has been reduced to a simple race to the top. Let’s explore a few of the reasons why.

The Stats Don’t Lie

In 2011, Google AdWords provided a new layer of data transparency with the release of the Top vs. Side performance segmentation. Since then, the report has morphed into the Top vs. Other report – as it includes ads that are displayed below the organic results. Regardless of the name, this data clearly shows the performance differences between ranking in the top 3 ad positions or anywhere position 4 or higher.

top-vs-other-b2b-campaign-example

The example above is from a B2B campaign, but the differences in performance are similar across verticals. When you rank in the top 3, CTR is higher. Conversion rate is higher. CPA is lower.

It's hard to argue with those stats. Rank higher, perform better.

User Behavior Hasn’t Changed

For years, all of us in the SEM industry have been inundated with eye-tracking studies that illustrate the “golden triangle” of the SERPs. Users see the top 3 ads and the first few organic listings and little else. Now we can marry this knowledge with the stats (top vs. other report) and it is obvious – ranking in the top 3 positions carries significant weight.

Google’s Feature Parade

One of the biggest concerns for PPC advertisers is the constant parade of new ad features being rolled out by Google. Ad extensions, text ad changes, and the ever-expanding product listing ads all are a factor in how ad position plays into overall ad performance.

  • Ad Extensions: Some ad extensions, like Sitelinks, are only triggered when your ad ranks in the top 3 positions. Sitelinks are a known factor in garnering higher CTR and conversion rates. If you don’t rank in the top 3, you don’t get the benefit of improved performance.
  • Ad Text Changes: Google has been tinkering with how ads are displayed in the top 3 positions. Over time, these ads have been fashioned to mimic organic listings. The end result? More searchers click on these ads – CTR and conversion rates increase. Google has placed so much importance on this that when you create a new ad, you are shown exactly how your ad will appear in the top 3 spots vs. anywhere else.

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  • Product Listing Ads: Product listing ads are great when you have products to sell. Searchers are drawn to images and the bottom line effect on conversion rates is huge. But PLAs also take up a lot of space. So much space that if your ad position is 4 or higher (lower in the SERPs), your ad is essentially pushed below the fold. Your ad might as well not even be displayed.

So, what are you left to do?

  • Review your data. Pull the top vs. other report in AdWords and note the differences in performance. Maybe you are that rare advertiser who sees acceptable metrics in position 4 or higher.
  • If the data indicates that positions 1-3 garner improved performance, increase your bids to ensure that you rank in those positions more frequently.
  • Make sure that you take advantage of as many ad extensions you are eligible for. Ad extensions are proven performance multipliers. And in the case of sitelinks, they are only triggered when you rank in the top 3.
  • Most importantly, don’t misconstrue my points here as a statement of “bid for position 1.” It is still your job as a competent PPC manager to optimize campaigns to meet or beat your KPI goals. Use all of your PPC knowledge to support ranking in the top 3: manage search queries for negative keywords, optimize for long tail keywords, test ad copy, implement day parting, etc.

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  • And if all else fails, spend more money on Bing Ads. In many cases, the top ad unit contains 4 ads instead of the 3 that Google displays. The product listing ads are there, but they don’t appear in the upper right (yet), so position 5 or higher will carry a bigger punch!

About the author

John A. Lee is an Internet marketing jack-of-all-trades with experience managing PPC, SEO and social media campaigns, but is perfecting his pay-per-click and analytics skills for Clix Marketing clients. John is an avid blogger, writing both professionally for the Clix Marketing PPC Blog and on personal blogs.

Before joining Clix Marketing, John worked as Paid Search Manager for Wordstream and was a Senior Search Marketing Consultant for Hanapin Marketing in Bloomington, Indiana, where he was instrumental in the success of Hanapin's two search marketing blogs: PPCHero.com and SEOBoy.com. John's writing has also appeared on the Wordstream Blog, ShimonSandler.com, and within Website Magazine.