In a post today on the Inside AdWords Blog Google reported on conversion rate research conducted by their Chief Economist Hal Varian and his team concluding that conversion rates just don’t vary much by position.
We have used a statistical model to account for these effects and found that, on average, there is very little variation in conversion rates by position for the same ad. For example, for pages where 11 ads are shown the conversion rate varies by less than 5% across positions. 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.
While I can see the logic here [and find it fascinating that we finally have statistical proof from Google as to the conversion rates by position] the reality is that conversions take place on the site and actually has very little to do with the ad position and everything to do with the relevance and engagement when they land on the site.? Therefore, I think there is a piece missing from the research.
Does the same ratio hold true to non-converting ads?? In the statement these were ads that “did convert” and that conversion did not change relative to position.? My question is, does an ad that does not convert at a higher or lower position do so in the opposite higher or lower position?
Google does reaffirm in the beginning of the article that higher positioned ads tend to get clicked more and if they are relevant they lead to more conversions – duh
We know that to be a high ranking ad we need to have a higher CPC and/or a higher quality score than competing ads.?? By the nature of the quality score, those higher ads should be more relevant and thereby have a higher potential to convert better.
We need to be cautious on how this is spun but searcher marketers since this can lead to faulty logic by advertisers who decide to reduce their max CPC since they feel that they can get the same conversion at a lower position which costs less.? We need to make sure that advertisers have the full picture and not just a soundbite written from the Economist’s notes.
Would love to see the larger study!