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BizReport : Search Marketing : August 19, 2009

Google: Conversion rates not linked to AdWords ad position

A team at Google has researched whether AdWords ad conversion rates improve the higher up in the ranking an ad is displayed. Their conclusion? Don't stress over where your ads appear, instead concentrate on a quality execution.

by Helen Leggatt

According to Google's Chief Economist, Hal Varian, it matters very little which position your AdWords ad appears in, because there is only a small variance in conversion rates across positions.

In other words, advertisers shouldn't stress too much if they aren't top of the pile all the time. Being halfway down, or even at the bottom of the ad rankings, will result in only a small drop in conversion rate, found Varian.

In fact, Varian claims that recent research he and his team had undertaken on conversion rates by ad position found a less than 5% variation in rate even in listings of 11 ads.

"In other words, an ad that had a 1.0% conversion rate in the best position, would have about a 0.95% conversion rate in the worst position, on average. Ads above the search results have a conversion rate within ±2% of right-hand side positions," he explained via a recent Inside AdWords blog post by Dan Friedman.

Google also ranks ads by bid x ad quality, explained Varian, and ads that rank higher tend to be of a higher quality. Those higher quality ads tend to have higher conversion rates. "Thus you may see a correlation between auction position and conversion rates just due to this ad quality effect".

Tags: ad ranking, AdWords, conversion rates, Google, online advertising

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