Don't forget to segment your visitors by their CPC bid!
You'd be surprised how differently a visitor who clicked through to your site from the first ad spot behaves compared to visitor who comes from the 7th or 8th ad spot. For one thing, people who are clicking the lower ads tend to be more price conscious!
So if you have e.g., $20 per day to spend, it might be better to buy 5 clicks at $4 each than 20 clicks at $1. You could very well convert half of the expensive clicks and none of the cheap ones!
In over $5,000,000 of paid search spend managed, I have never seen this to be true.
The perception of this is universal to all clients, but the numbers never backed this up. Would love to see a case study that shows it's true.
I would think the opposite might be true. The person who is likely to click all the way down has already tried a bunch of links on top and their purchase intent may be much higher than the casual shopper who isn't as determined to find the best price. Also, the more price conscious shopper is not necessarily the worst shopper if you have the lowest price!
In theory you are right, but in practice that is rarely the case. See the link I posted above to Google's case study and explanation.
This is one of the biggest myths in the SEM world, most likely a result of paid search managers charging a percentage of ad spend, and therefore motivated to find justifications to bid more and spend more. (I am not saying this is a conscious effort, but you certainly can't deny the validity of the bias... and the fact that there is a better explanation to why the data might mislead you. (the better converting ads, end up in higher positions.)
I've not managed $5MM in ad spend, but its held true for many of the accounts that I have managed. At any rate, I'm only advocating for segmenting your visitors by CPC and looking at the results; I'm not saying that what's been true in my experience will be true in yours!
Regarding the article you shared: I assume Google is making that judgement based on AdWords' conversion tracking, which does not account for offline behavior, but rather tends to track actions like form submissions and calls. That's an incomplete picture for any business with a sales funnel that includes on an offline component (e.g., speaking to a salesperson on the phone, touring a college campus, or coming in for a test drive).
In my experience, customers who click on lower positioned ads might be as likely (or more likely) to fill out the contact form and ask for more info, but they are not as likely to convert into customers. YMMV.
Most of my experience is with offline conversions, using call tracking data, with a number switching app from mongoose metrics. Google's data has held up to my experience.
Did you track the position of the same ad, keyword, adgroup, and landing page across different positions and see a significant difference in conversions?
otherwise, there could be several explanations.
In my experience, while CTR are higher in higher positions, conversion rates stay steady across positions.
Yes - even with the same ads/ad group/keywords/landing pages, my experience has been that customers who click through from lower positions tend to be price shoppers, and are often less likely to become customers.
That said - my data is largely qualitative. My AdWords experience is primarily in selling local services online, and my customers tend to offer premium services (at higher prices) than their local competitors. All of this could be a factor.
"otherwise, there could be several explanations."
Absolutely, that's our own special kind of hell. :)
It could be that customers who see our ads in top spots recognize the brand from other channels, and so they aren't bothering with the other ads, whereas customers clicking on lower positions are meeting us for the first time. Or it could be that our landing pages speak to one type of customer (e.g., one who wants to hire the best, and is less concerned about price) but is leaving another type cold (e.g., those who want quality, but put a premium on value).
I'm just saying - don't forget to segment visitors based on their ad positions. :)
PS: thanks for the great discussion - its always wonderful to hear another perspective, and re-evaluate assumptions.
I have this discussion at least 5 times a year with clients. In industries with lots of price comparing, I have clients insist that lower positions produce better leads, cuz they already shopped around... The data just doesn't back this up in my experience.
I agree completely that you should measure and optimize around every metric you can, and bid management solutions can often do this for you.
I personally have yet to see data that supports the theory that searchers who click on different positions of the page convert at different rates...
"...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."
You'd be surprised how differently a visitor who clicked through to your site from the first ad spot behaves compared to visitor who comes from the 7th or 8th ad spot. For one thing, people who are clicking the lower ads tend to be more price conscious!
So if you have e.g., $20 per day to spend, it might be better to buy 5 clicks at $4 each than 20 clicks at $1. You could very well convert half of the expensive clicks and none of the cheap ones!