The Clickable Search Engine Marketing Blog

Which position is the best placement on search results pages?  The optimal ad placement (a.k.a., rank, position) is an aspect of search marketing that gets a lot of attention ― probably too much ― from novice search advertisers.  Most people have clear intuitions and anecdotes about what is a "good" place for your ad, but here I will present some real empirical data that should help answer this question.

First, I will discuss the common misconception that "higher position is better." Everybody likes to be number 1. Nobody likes finishing second. This is especially true when advertisers are jockeying for the top few positions on the search results page with their key competitors.  However, if your ad is consistently running in position #1, you are likely to win the battle but lose the war. You pay a premium to appear in the higher position, which means you deplete your budget more rapidly and end up getting fewer clicks.  Suppose you and your competitor both sell widgets, and you both have the same, limited, $1,000 budget, and for the keyword "widgets", your ad appears in position #1, and theirs appear in position #2.  You may get a slightly higher click-through rate being in the top spot.  However, you are definitely paying a much higher cost per click. Your competitor pays less per click, which means their budget lasts longer, which means that at the end of the day you have both spent $1,000 but they got more clicks and they sold more widgets. If you are consistently running in position 1, you are probably paying too much per click.

I liken this to the recent trend of professional basketball teams shunning the #1 pick in the NBA draft. Number 1 draft pick players typically command a lot of media attention and glamour, and demand very high salaries in their initial contracts―perhaps rightfully so, because, as their agents will remind you, they are the "best" available. But they may be only negligibly better than the #2 and #3 players, if at all.  Cost-conscious NBA franchises these days don't want to pay big bucks for #1, when they can get an equally good player at #3 for half the cost.

The allure of position #1 in Google is a lot like the allure of position #1 in the NBA draft. You're paying a premium for a glamorous ad placement, but your money would be better spent elsewhere.  Specifically, you ought to be spending that money on more, different keywords or on more clicks from that same keyword.  The name of the game in search marketing is performance―getting more people to visit your website and take desired actions on your site―not appearing in a more prominent spot than your competitors.  The same logic that has advertisers lusting for the top spot in Google would also suggest that they should get out of search marketing entirely and run a TV campaign, or buy a billboard in Times Square, or get sponsorship deal with the #1 pick in the NBA draft.

You may still be wondering, "is performance really just as good in positions 2 and 3 as it is in position 1?"  Here I will refer to some published experimental data and some un-published data that we've aggregated from our client accounts here at Clickable.  The answer is "yes", 2 and 3 are just as good if not better than 1.  An eye-tracking study by Marketing Sherpa has found that the top two or three ads on a Google search results page are typically scanned and compared almost simultaneously.  They found that among the top three spots, it is relevance to the user's query, and not position, that determines click-through rate.  Our aggregated client data confirm this: there is only a very small, insignificant, decrease in click-through rate from position 1 to position 3. Users don't care as much about the rank of ads as they do about the quality of ads, and so they typically view multiple ads and compare.

A car dealership in my area has the slogan "shop here last".  While they argue that their deals are superior, really they are banking on the fact that in the case of a "tie" between their offering and nearby competitors, the shoppers preference will go to the dealership they are already at, the last one.  The "shop here last" strategy is especially advantageous for search marketers, who actually receive a discount on cost per click when they are the last ad that the user reads, rather than the first. Don't pay a premium for the top position, when you can get the same if not better performance from position 2 or 3, and save some money to spend on more clicks elsewhere.

Ehren, Clickable SEM Guru

Note: Clickable employees volunteer several hours a week to helping other search marketers succeed. "Clickable Gurus" participate in numerous online search communities to provide straightforward answers to numerous questions, and, each week, one of the gurus posts a search marketing tip to the Clickable Blog.

Pingback from  Your Publicity To You  » Blog Archive   » What is the Optimal Ad Position on a Search Results Page? - The …

It's a new year, and, as always, an opportunity to reflect on things we might do better in the year