Did you know that the top position in the paid search results can increase your click-through and conversion volumes exponentially?

This report, based on research by one of First Rate’s Senior Consultants Stephane Bottine, draws on intelligence from over 1,000,000 Google searches across 10 large search engine marketing campaigns to shed light on the relationship between ad position and click-through rate.

Why Ad Position Matters

It’s common knowledge that ads appearing in the highest paid positions usually experience a higher click-through rate (CTR). However, surprisingly little research has been published on this subject. Few people know how fast CTR falls for ads that appear lower down the page, or even what the distribution of CTR is across ads beyond their own campaigns.

In an industry first, First Rate has conducted research using the paid search accounts of ten of its clients. Our research reveals that ads showing in position #1 experienced an average CTR of 17%. In other words, an advertiser can expect to attract 17 clicks for every 100 impressions when the ad appears in the top spot. Ads that showed in position #2 also drew significant attention, with an average 13% CTR recorded over the period. Interestingly, click-through rates flattened across positions 4 to 7, before tailing off.

This has produced some interesting insights:

• If an advertiser is appearing in position #4 and the bid is reduced, can CTR be maintained even at a lower paid position? Our research suggests that this is possible.
• If an advertiser is appearing in position #3, then how big an increase in CTR could they secure by lifting their paid ad position? Our research suggests ads in position #1 experience more than double the CTR of ads in position #3.

The Long-tail Generates Higher CTR

Ad position is only one the factors that influences click-through rates. Other factors include the relevance of your ad to the search query, the number of competing ads, and the quality of organic search results.

Our research shows that long-tail search queries experience substantially higher click-through rates. This result holds true across all paid ad positions. For example, ads appearing in position #1 can record an average CTR of 32% for long-tail searches featuring 4 words and more. Conversely, the same ad can attract up to 12% CTR for short-tail searches featuring up to 3 words.

Short-Tail vs Long-Tail Searches

Short-tail searches on non-brand keywords typically occur in the early stages of the buying cycle, when people are driven by informational needs. Longer tail searches arise further down the buying cycle, when people are likely to pay more attention to ads and convert.

First Rate research indicates that 3-word searches compose 30% of all searches. Long-tail queries featuring 4 words or more account for 58% of all searches.

Interestingly, few marketing managers know how to successfully capture long-tail searches through paid search campaigns, preferring instead to bid on short-tail, high-volume phrases. Based on this research, they would do well to expand their search campaigns beyond the short-tail, with a campaign and ad group structure that capture medium- to long-tail searches.

How to Reach the #1 Paid Spot

Appearing in the top spots above organic search results can have a transformational impact on your Internet marketing campaigns. If your focus is on brand-building, a top position will help grow your impression share and increase brand awareness.

If, however, your focus is on conversions, a top position will maximize traffic to your landing page and grow your bottom line, as long as you have struck a balance between your cost per acquisition and revenue per conversion. Importantly, if the incremental cost of bidding to the top ad position is not offset by a higher conversion rate, you could end up blowing out your CPA, making the achievement a hollow one.

Advertisers often ask us how they can target the top placements above search results. For any given search, AdWords opens these positions to the highest ranking ads only if they meet a certain Quality Score and CPC bid threshold. Reaching out to long-tail queries with compelling ad text is one of the ways you could get there.

Related Posts:

• Recent Google AdWords Ad Changes and Improvements
• metservice.com SEM Case Study
• Case Study: Smart Performance Marketing Drives Rapid Customer Growth for Number One Shoes
• AdWords PPC Case Study – Accommodation (SKYCITY)

Mark Baartse, Consulting Director at First Rate will be presenting a session on Cross Channel Attribution at the upcoming eMetric summit in Melbourne 16th – 17th November. Mark will speak about how to optimise the true value of every click on the path to conversion.

We know that users cross channels, yet we continue to do a bad job of reporting on and optimising to multiple clicks that cross channel. Mark will speak about case studies that use cross channel and multiclick attribution to get a true view of the value of each click – regardless of the channel used. After the session you will be able to optimise your media spend, to the real contribution of different channels, helping you to get the most for every media dollar.

We’ll also be running a Search Marketing Bootcamp session for eMarketers wanting to understand practices better or to brush up on their skills.

It’s free! and will take place in the exhibition hall – check it out here

Chat to the First Rate team in the exhibition hall about any niggling issues or find out what’s next for the future of search and performance.

Dont forget to drop your business card in the bowl at the First Rate stand for your chance to win a nifty Apple iPad.

Check out SMX and the eMetrics Summit, which run along side each other here.

Related Posts:

• IgnitionOne Launches, Offering Industry-First Digital Marketing Suite
• The Integration of Search Marketing and Display Advertising
• Increasing the Performance of your Digital Media Spend with Cross-Channel Conversion Attribution
• New SearchIgnite 4.0 Driving Increased SEM Performance for First Rate Clients
• Do you want better results from your Paid Search?

Having trouble with online advertising? Do any of these statements sound familiar?

• “I can’t make my display advertising work…”
• “I am finding it hard to come up with the right creative message…”
• “My banner click-through rates are weak…”

If you have ever carried out any display banner advertising, you know that display offers one of the lowest click-through and conversion rates of any online channel.

As a result marketers predominantly use this channel to boost brand presence when it could be embraced for its direct response attributes.

Using Analytics to Develop Smart Creative

It’s not hard to develop creative that is so outrageous that everyone wants to click – just get your creative agency to develop banners that read “Click here and receive $5,000!” and see the clicks flood in.

However, I’m pretty sure that while you’ll generate a boost in traffic, 99% of this traffic will not add any serious value to your business.

So how do you increase traffic without compromising quality? Engage focus groups to analyse your products and services? Pay thousands of dollars to research houses to supply in-depth market intelligence?

In fact, there’s an easier, cheaper solution: Use search data to draft your ads.

Search engines and analytics packages are loaded with valuable data that can be used for display advertisements. These include Keywords, Search Volumes, Click Volumes and Conversion Data.

There is a lot of information here. You just need to study this data to find the opportunities.

Here are two tactics that I recommend trialling that use search data to help drive display advertising.

Approach 1: Use Paid Search data

If you are running any Paid Search (SEM) activity, then I recommend extracting a report of the best performing Text Ads from your program. Ensure you capture their corresponding Click-through Rate (CTR) and Conversion Rate (CR) performances.

The data available here can be, at the very least, just as valuable as any other market research that can be purchased, and a lot less expensive too.

The data tells you the story of how consumers are finding, interacting and converting on your site. Assuming that your Adwords and Analytics are implemented correctly, pay per click advertising can provide compelling data.

So why not use this to build your display creative as well?

1. Get your team to do an extract of the Text Ads within your Google Adwords campaigns
2. Ensure the report contains “Text Ads”, “Text Ad Impressions”, “Text Ad Keyword Click-through Rates”, “Text Ad Conversion Rates”
3. Sort initially by Conversion Rates – highest to lowest
4. Add a 2nd sort by Click-through Rates – highest to lowest

After cross-referencing Click-through and Conversion Rate, you can assess the data and determine the best performing Text Ad based on driving the highest number of clicks and conversions.

Example

Using this intelligence you now have a blueprint of what keywords and Ad copy should be adopted in your banner creative. In this example, it’s easy to see which key words performed strongly and, therefore, were incorporated into banner ads.

Approach 2: Use Google’s Keyword Tool

1. Go to Google Keyword Tool and select your region (in this example, Australia)
2. Start typing in a wide selection of keywords that relate to your products or services. Google will make further suggestions of keywords you can use; select where appropriate.
3. Once you have a good selection of keywords, set the filtering to to ensure you only capture exact searches (no phrase variations)
4. Sort by local search volume from the previous month.

Now take the keyword with the highest search volume and integrate it into your banner creative.

For example, look at the keyword “Property Investment”. This keyword had approximately 175% more user searches in July 2010 than the next highest searched term, “Property Investing”.

By using the term “Property Investment” in your marketing you have taken an existing insight and preempted the user’s future search action. Google Keyword Tool can give you the most popular phrasing that consumers are using. Combine its use with an offer and this ad becomes highly targeted and relevant.

Example

Liaise with your creative agency (- eg. Market United – ) to develop a simple animated banner which looks and feels like a search text box. Have the animation feature a blinking cursor in the text box, then typing in the keyword identified in your initial research, before clicking on the “Search” button.

Follow up with an offer to prompt a user action.

Summary

As can bee seen, strong creative messaging can be generated by using data from Google’s Keyword Tool or your own PPC account data. Gather insights, understand your target audience, how they interact and convert with your site. Once you have this intelligence then the creative almost writes itself.

Please note that the above recommendations should only been seen as a preliminary step to developing your creative concept. If you are already running some display activity, then at the very least you should use best practice marketing techniques and TEST these concepts against your current display activity.

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