It’s easy to assume that a higher position in search advertising will result in a better result. Right? The fact is that this subject is one of the most complicated in the digital marketing field. During the last decade, dozens of researchers worked on this question and published amazing scientific papers, but unfortunately, there’s no agreement on the best answer.
Depending on the size of the firm, type of keyword, consumer perception of the brand, intensity of competition and several other variables, the effect will be significantly different. Some of the best research findings are summarized below:
Company Size is a determinant factor here. A group of researchers analysed data from a carefully designed study of Google, Bing and Yahoo search advertisements for eBay and found out that for an advertisement using keywords that contain a brand name, there’s almost no significant effect. In other words, for eBay, running search engine advertisements for “branded keywords” makes no difference.
Result: eBay stopped all branded keyword advertisements! [i]
In another study, researchers used search advertising data from 4 different companies competing on a similar group of keywords. The effect of position is only significant for bigger firms when ads change from position 5 to a higher one, but for smaller firms, ads at positions 6, 5, 3 and 1 are more effective than lower positions. [ii]
Conclusion: If you’re a big well-known firm, it’s less important to compete for position 1 and you may end up saving some advertising dollars bidding for lower positions! But it’s all based on the assumption that other competing companies will not use your brand name as a keyword to capture the spill-over.
If you’re a big well-known firm, it’s less important to compete for position 1 and you may end up saving some advertising dollars bidding for lower positions!
Based on research on search engine advertisement data from a major US retailer over a 4-year period, researchers concluded that ads in the 4 top positions capture 80% of all clicks and the top most position alone captures half of these clicks! Clicks on this position are 21 times the clicks on the lowest position of the first page and 496 times the ads on the second page! [iii]
But the effect on conversion rates is not that clear. Position one has a significantly higher conversion rate compared to the other lower positions, but among other positions, they did not find a significant difference.
Conclusion: First make a decision on your goal. Search engine advertising strategy is totally dependent on your goal. Are you aiming to increase your brand awareness, find new customers who have never heard about your brand or product or are you looking to increase sales?
First make a decision on your goal. Search engine advertising strategy is totally dependent on your goal.
Weekday vs Weekend may make have a different effect on the position. At the weekend consumers are more relaxed, have more free time and so it’s easier for them to spend more time on searching. In comparison users spend less time on searches on weekdays. Research data shows that in order to capture customer attention it’s more important to appear in a better position on weekdays than at weekends.
Conclusion: Analyze your data! Some search terms belong to B2B searches and people will rarely spend time looking for them at the weekend. So to avoid wasting money on unrelated clicks, you can pause your ads at weekends. But sometimes you can bid lower at weekends and capture inexpensive, but high quality, leads!
Sometimes you can bid lower at weekends and capture inexpensive but high quality leads!
Consumer composition has an effect on the level of importance of an ad position. Based on research data from a Korean search engine, the composition of online consumers has a significant effect on the value of the ad position as well. [iv]
Conclusion: Learn more about your target customers. How do they search? When do they search? How much time do they spend on searching? Data is determinant here.
- There’s no definitive answer to this question. Pursuing the same approach in every situation is a direct path to failure.
- Define your marketing strategy first. You can split your marketing budget based on your goals in order to achieve a good result
- Categorize keywords based on the users’ perspective. It’s almost impossible to find the exact intention of users by just looking into their search criteria, but there are methods and technologies to predict it and refine the advertisement strategy accordingly.
- DATA! The main advantage of digital marketing over traditional marketing is data. You can use your own historical data, make assumptions, test hypotheses and refine them to optimize your online marketing campaigns.
Another article for you:
[i] Blake T, Nosko C, Tadelis S (2015) Consumer heterogeneity and paid search effectiveness: A large scale field experiment. Econometrica 83(1):155–174.
[ii] Sridhar Narayanan, Kirthi Kalyanam (2015) Position Effects in Search Advertising and their Moderators: A Regression Discontinuity Approach. Marketing Science 34(3):388-407
[iii] Zhe Liu, Bernard J. Jansen, Zach Simon, Investigating the Effect of Results Ranking in Sponsored Search
[iv] Tat Y. Chan, Young-Hoon Park (2015) Consumer Search Activities and the Value of Ad Positions in Sponsored Search Advertising. Marketing Science 34(4):606-623