Posted by admin on 14th February 2012

How important is ad position for paid search ad?

Is a top ad position critical for achieving results in paid search? I’ll present an argument here that ad position is often, but not always, the most important factor in achieving results with paid search campaigns. Let me explain.

Marketers who utilize paid search advertising typically have one of two objectives:

  • Building brand awareness
  • Lead Generation and sales

The importance of ad position depends on which of these objectives you are trying to achieve. If your primary goal is to build brand awareness, achieving a top ad position is critical in a similar way that achieving page rank is critical in SERP (search engine results page). Commanding a top position represents dominance in the market, financial strength and marketing power. Securing a top position will increase brand awareness and generally translates into more clicks but at a higher cost per click. More people will see your ad but less than half of them will click. If your goal is brand awareness, this strategy can produce the desired results.

If your objective is lead generation and sales, you need to get as many clicks as possible at the most cost effective price. Under this scenario you need to determine the most appropriate bid to achieve optimal ad placement, not necessarily a top 3 position. When your goal is lead generation and clicks, securing a top position is not as important, and it can be cost prohibitive. The top position is generally not going to be cost effective as the competition is high and you will pay a significant premium. However, securing a lower ad position (below the top 3) can be a cost effective approach when clicks, not brand awareness, is your goal. Search behavior data indicates that people are likely to view ads below the top 3, particularly when they are searching for a discount price as opposed to a specific brand.

One mistake we commonly see marketers make is trying to achieve both brand awareness and lead generation with one ad. Lack of a clear objective usually results in dilution of effort and poor results. Unfortunately, these marketers often end up discontinuing their PPC campaigns mistakenly thinking they don’t work. In actuality these campaigns can be very successful but you must have clearly defined objectives and align the campaign with your specific objectives.

As most know, search engine ad display logic is complicated and many variables are included in the algorithm that determines ad position. Due to this complexity, even the most advanced search marketers and PPC management software cannot guarantee the desired ad position. However, PPC biding software can be a powerful tool to help place your ad in the optimal position based on your objectives. A good PPC bid management software will have the capability to monitor keyword competition and rebid on a daily basis to concentrate ad spending on the best performing keywords and the optimal ad position for your goals.

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