AdGooroo: Top ad placements not always most profitable

When it comes to ad visibility, most would expect the most profitable AdWords placements to be those positioned either directly above the organic search results or the first to be listed on the right hand side of the search results page.

However, search marketing firm AdGooroo has found that the most profitable placement for an ad is actually in seventh position, particularly when bidding on broad keywords. Using data from Google Adwords they quantitatively measured the correlation between CPC, CTR and average ad position.

"The top position in AdWords only makes sense for the top tier advertisers working with large budgets and those with highly sophisticated ROI models that track the return on multiple keywords leading up to a single lead or sale," said Richard Stokes, AdGooroo's president and founder. "Every rule has its exceptions, but we're trying to create a starting point for advertisers here that gives them a better jumping off point for their campaigns."

Stokes goes on to explain that if an ad isn’t profitable when it appears in the seventh spot it is a waste of budget to increase the bid to attempt to jump one, or even four, more places. "Though it would seem like getting a higher placement would increase conversions, we found that the conversion rate doesn't increase nearly as much as your CPC,” he said.

Instead, marketers should work on improving their landing pages and ad copy, or even stop bidding on that particular keyword altogether.

Tags: ad placement, ad profitability, AdWords, keywords