Are Top Ads in Google Worth Every Penny?

Written on 23 June, 2015 by Lazar Dusanovic
Categories PPC

In many aspects of life, we have been conditioned to believe that being #1 is best. This is arguably true in environments where all competitors start from the same position and achieve #1 through skill, talent or effort.

A big exception is where you can buy the #1 spot. While some people can validate buying a new Lamborghini, most people would be happy paying a lot less for a car that is still quite good.

And so it is with advertising, a world that has Super Bowl ad spots at one end of the scale, and free classifieds at the other. Because the same ad platforms are used by a myriad of products, all targeting different potential buyers, #1 isn’t always best.

The Super Bowl is an extreme example, where a 30 second ad spot costs $4.5 million. Those ads run during the game. If you want to save a little money, the ads that run after the final whistle are $1.5 million cheaper. That was the sweet spot for Esurance in 2014 (1). Pregame ads are reportedly half-price (2).

Finding the Sweet Spot

When it comes to PPC advertising, on search engines like Google and Bing, #1 isn’t necessarily the best place to be. This is especially true when those competing with you in the ad auction:

  • are hell-bent on being #1 no matter what the cost (pride);
  • own the brand you are bidding on (high CTR makes it cheaper for them);
  • are a better fit for the keyword (but a stretch for your brand).

Also important is the type of search being conducted.

Searchers who are comparing prices, especially when the prices do not appear in the ads, will often click on every ad. This is especially true for a high-value purchase, like a car. That means you can pay less to be in #5 and still receive plenty of clicks. On the other side of the coin, if searchers are clicking on every ad, any premium paid to appear at #1 is wasted.

Other examples of clicking on every ad include generic keywords in the fields of art and fashion. A woman who searches for “bikinis” is likely to visit most of the sites and ads on page one before deciding on a purchase.

One more example is when search queries are ambiguous. If somebody searches for “buy apple”, and you are a fruit supplier, paying to outrank ads for the Apple smartphone or Apple computer would be ill-advised. Consider a lower placement for your ad – it might not get seen as much, but those who do see it and click on it are more likely to be qualified buyers.

Or you can forget about the logic altogether and just let the numbers do the talking. Try a week at #1, a week at #2, and so on, for your exact keywords. See how each ad position affects your costs, your conversions and your return on ad spend (ROAS). Sometimes the reality is counterintuitive!

While Google doesn’t let you buy particular ad positions, you can achieve it quite well using their Automated Rules. Keyword bids can be raised or lowered if they are above or below a certain ad position. Make sure you are only using exact queries, or else differing search queries will just confuse matters.

Make sure to pay attention to your competitors. Use Google’s Ad Preview tool to see which ads are surrounding yours. Ask yourself if they are taking clicks from you, or are irrelevant. Ideally you should do this every day, or for retrospective analysis, you can use Google’s Auction Insight reports.

Finally, when it comes to search partners (AOL, etc), because the ads are less obviously separated from the organic results, #1 becomes even less appealing. A study conducted by Accuracast in 2013 showed that the paid ad position with the highest click-through rate (CTR) was actually #5. (3)

Written by Rob Skelton — Performance Media Specialist at Webcentral.





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