Do top ranking PPC ad spots convert better?

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Lucidity

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I'm trying to figure out what the value of a top ranking ad spot is besides traffic volume. Do they convert better? Do page 1 ads have higher CTRs and conversion rates than page 2 ads of the same position on screen?

Otherwise, with everything else held equal, upping your bid to increase rank (and thus number of clicks) would have the effect of increasing revenue but lowering ROI. But clearly there must be good reason for so many people to compete over the top spots. Or they're simply happy to have a lower ROI in exchange for a higher dollar amount of profit.

So, can anyone share their experience of what top ranking spots did (or didn't do) for them compared to lower ranking spots?
 


It depends on what you're offering. You can be on the first page, but if you don't have a deal that the customer wants, you're not going to get conversions. You'll get traffic, but they'll be wasted clicks.

Kind of like a those coupon mailers you get in the mail, everybody is probably paying the same (expensive) price to be in that mailer, which is being distributed to everybody in your city. Let's say you want to order pizza, and you see 10 coupons, you're only going to go the merchant that offers the best deal. Doesn't matter how much they paid, or how many residents received that coupon, you the customer decides who you're going to go to based on what they're offering.

When you're dealing with conversions there are many things you need to take into consideration. Your offer, your landing page, the keywords you're targetting, and your ad, to name a few. Take a look at what everybody else is doing and take notes.

Also, try to go after targetted keywords instead of broad keywords, you'll be able to rank higher for them and it will cost less and your conversion rate should be higher (depensing on your offer and competitors).

I'm no expert but that's my $.02


EDIT: I'm not sure how you mean that increasing rank = less ROI. More traffic = more $$$. If you have everything setup correct taking into consideration some of the things I mentioned above. Kind of like using that coupon mailer and pizza situation above. Let's say you move up from the coupon mailer to a billboard (higher ranking, more expensive, but much more traffic), as long as you have a deal that sells, you'll make more money. Yes the billboard costs more than your coupon mailer, but you'll be making serious money if you're offering the right deal.

Sorry about my weird analogies, it's the best I can explain. Like I said, I'm no expert, but that's how I see it.
 
When considering bids and ranking compared to ROI, you also need to take your payout into consideration. You can be on page 1 for certain targetted keywords and pay $.10 per click and your offer pays out at $100 per conversion. You can also be on the first page paying $5 per click, and your offer only pays out $1.50 per conversion.

Also keep your conversion rate in mind, you can be on the first page at $.10 per click and your offer pays out at $100 per conversion, but if you get a 1:10000000000 conversion rate, you will have a problem.
 
Thanks for the reply ubaidabcd.

What I'm asking is if the top ranking ads will have different conversion rates or CTRs for the exact same ads / landing pages / offers compared to lower ranking spots. So holding everything else equal, and just changing the position of an ad from a low rank to one of the top spots, will the conversion rate or CTR be any different?

What I mean with bidding higher for more traffic lowering ROI is that (again, holding everything else equal) you're paying a higher CPC for the same amount of return per click. Your total dollar amount of revenue goes up because you're getting more clicks, which means more conversions, but you're paying more to get that increase in clicks by bidding higher to rank higher. In turn, you earn more total dollar profit, but ROI still goes down because your cost goes up.

An example:

Before:
CPC: $0.10
Conversion rate: 2%
Offer payout: $20
Cost per conversion: $5
Average Position: 12
Clicks per day: 1,000
ROI: ($20-$5)/($5) = 300%
Total profit per day: $400-$100 = $300


I decide I want to get more clicks (assume quality score is fixed), so I change my max bid to $0.30. This is enough to put me in the top 1-3 spots.

After:
CPC: $0.30
Conversion rate: 2%
Offer payout: $20
Cost per conversion: $15
Average Position: 2
Clicks per day: 10,000
ROI: ($20-$15)/($15) = 33%
Total profit per day: $4000 - $3000 = $1000

My ROI drops like a rock, I'm spending 30x more a day, but I'm making $700 more in total dollar profit.

But my question is, would the jump from the low position to the top position have any affect on the conversion rate or CTR? Perhaps the people who see the top ads on the first page are in more of a buying mode, or subconsciously assign more relevance / authority to them?
 
Not trying to whine, but it's been 48 hours since I made my last post here. Think I could get an approval?
 
Lucidity said:
Or they're simply happy to have a lower ROI in exchange for a higher dollar amount of profit.
Click to expand...
Bingo. Some people have the capital and put it to good use.

Personally, I don't find a big difference between the conversion rates I get on top (usually #2 or #3 spot) vs the side (#4-#6).
 
I've had similar landing pages for the same product and keyword phrases be in different positions in the search engines, for example, position 2, 4 and 5 and conversion rates are basically the same.
 
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