Search Engine Marketing

Why Ad Position Doesn’t Matter

In track, the starting positions are adjusted so that no lane is shorter or longer than any other.

So why pay a premium?

I can’t find the bit of nonsense I ran across in an article the other day, but there’s a sea of it online if you search for “ad position sweet spot.” Nonsense articles like this from Seer Interactive with nonsense paragraphs like this:

“Contrary to what you might have heard, optimizing average positions does not always mean gunning for the top spot. Optimal positions will greatly vary among clients, industries, goals and engines.”

Balderdash. Despite whatever evidence you think you’ve seen, there is no “optimal position.”

You may have a favorite ad position to target. You may have years of experience and evidence to support your superstition, but that’s what it is: a superstition.

As data-driven digital specialists, our job is to separate meaningful correlations from noise. This means we are always working against our nature, because humans are pattern recognition machines. Randomness seldom looks random, which is why it’s so hard to disbelieve in luck.

Even the world of finance is full of superstitions, so why should digital marketing be any different? I’m only suggesting that PPC Specialists are just as susceptible to self-deception as billionaire hedge fund managers.

What is Ad Position?

Ad position is the order your ad appears on a search results page, as determined by its ad rank in a given auction. To make matters confusing, a higher ad position number means it appears lower on the page.

(I don’t know about you, but deciding whether to say “higher ad position” to mean higher on the page or higher ad position number, and vice versa, is a stumbling block akin to deciding whether to invert your controls in a video game. Once I’ve done it both ways I am uncomfortable either way.)

Also confusing is Google’s use of the term “ad rank.” The word “rank” implies an ordinal position in a series, but they define Ad Rank as CPC Bid x Quality Score, which yields a dollar figure. A more descriptive term would have been “Quality Adjusted Bid”. As it is, a higher Ad Rank means a lower Ad Position which means a higher placement on the SERP. Thanks for making it clear, Google!

Why Ad Position doesn’t matter

When people talk about a “sweet spot” for ad position, what can they mean? Let’s go through the possibilities.

We know that all else equal, the higher the ad position, the lower the CPC. Presumably there’s nothing “sweet” about paying more, so with regard to CPC, the less you pay the sweeter.

We also know that all else equal, the higher the ad position, the lower the CTR. Yet why should CTR matter? Sure a higher CTR means more clicks, but if the clicks are more expensive then you actually get fewer of them for your budget. Clicks = Budget / Avg. CPC. If your goal is to get higher click volume, then the “sweet spot” is the highest possible ad position that spends the budget.

Maybe people are concerned about CTR’s effect on ad quality. But Google has been perfectly clear that it evaluates the expected CTR for the ad position when determining ad quality. That is, bidding for position 1 to raise your CTR will not raise your ad quality.

What about the conversion rate? Looking at the data, you may notice a relationship between ad position and the conversion rate, but I would argue that this is just noise and you have to suppress that urge to see patterns where none exist.

Think about it: what plausible mechanism might explain why a user clicking an ad at position 3 on the page is more likely to convert than a user clicking an ad at position 2? If there is some psychological factor underlying that user profile, do you really think it would be possible to tease that out in the data?

No, any relationship you see between ad position and the conversion rate is almost certainly a coincidence. Ad position has no impact on quality score, either. Ad position doesn’t matter.

Focus on what does matter

I can only think of one reason to ever optimize for ad position, and that’s if a client wants to “own” a position on the SERP no matter the cost. If it’s important to indulge in that kind of vanity, then fine, in that limited case ad position matters.

But in most cases you are trying to maximize something else, like (ideally) profit or (less ideal) click volume. In that case you can forget about ad position and just turn on the bid rule that accomplishes your objective. Google will adjust your bids accordingly, and whatever ad position you get will be the sweet spot.

By the way, if you are reading articles like this to hone your digital marketing skills, we’d sure like to have you in our network.

By Kevin Frei

Kevin Frei is an entrepreneur, paid media specialist, and intermittent nomad from Arizona. Ethical Digital is his third startup after and an online traffic school company. An avid traveler and economics hobbyist, Kevin's goal is to revolutionize the way service companies are organized so that more people can achieve the dream of professional (and locational) independence.

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