The profit margin on the product or service offered is a large factor. Tests have proved that the first ad position on the first page is, generally, not the most profitable, it gets the most clicks. It’s often a spontaneous action by the surfer before studying the ad, surfer is merely browsing the subject and is not ready to buy, commonly known as “tyre-kickers”.
Tests can definitely show that the further down the page an ad is, or, even on the second page, the greater is its conversion rate is. The surfer has taken the time to read the ad very carefully because he is ready to buy, the clicks are fewer, your overall pay-per-click bill is less than for a higher-positioned ad. The downside is that the click-through rate or CTR of the lower-positioned ads is lower affecting your Quality Score adversely and raises your cost per click.
A happy medium is to aim for positions 4 to 6 on Google’s first page, you can use the “Show Estimated Ad Position” and “Estimated Avg CPC” columns in the on-line Google AdWords Keyword Tool to determine the cost-per-click to bid for each of of your exact match keyword phrases. Then you can set those bids accordingly, these figures can, however, be notoriously inaccurate. Always check your keyword phrases’ positions afterwards in the ‘Avg Pos’ column on the Ad Group’s ‘Keywords’ index tab. You can do it by testing with a search on the main keyword phrases.
The profit margin on the product or service offered is a large factor. Tests have proved that the first ad position on the first page is, generally, not the most profitable, it gets the most clicks. It’s often a spontaneous action by the surfer before studying the ad, surfer is merely browsing the subject and is not ready to buy, commonly known as “tyre-kickers”.
Tests can definitely show that the further down the page an ad is, or, even on the second page, the greater is its conversion rate is. The surfer has taken the time to read the ad very carefully because he is ready to buy, the clicks are fewer, your overall pay-per-click bill is less than for a higher-positioned ad. The downside is that the click-through rate or CTR of the lower-positioned ads is lower affecting your Quality Score adversely and raises your cost per click.
A happy medium is to aim for positions 4 to 6 on Google’s first page, you can use the “Show Estimated Ad Position” and “Estimated Avg CPC” columns in the on-line Google AdWords Keyword Tool to determine the cost-per-click to bid for each of of your exact match keyword phrases. Then you can set those bids accordingly, these figures can, however, be notoriously inaccurate. Always check your keyword phrases’ positions afterwards in the ‘Avg Pos’ column on the Ad Group’s ‘Keywords’ index tab. You can do it by testing with a search on the main keyword phrases.