Does Pay Per Click Ad Rank Impact Your Conversion Rates?

Rob ReedGoogle AdWords, Pay Per Click Management

If you lower your ad position in Google AdWords, how will your conversion rate and number of overall pay per click conversions be impacted? A study several years ago by the Atlas Institute found the overall answer to this question.

I use the term “overall” because you should never assume that search marketing studies like this one on PPC conversions will apply accurately to your specific paid search account. In addition, the study is somewhat dated and visitor behaviors and the search marketing platforms are continually changing.  Having said that, the study provides some general knowledge that may benefit you.

The study found that the overall conversion potential for both high-volume and low-volume keyword phrases decreased as the ad rank decreased. This makes sense because your click-through rate normally decreases as the ad rank decreases. Fewer clicks on your ads translates to fewer visitors to your site and lessens the opportunity for conversions. The overall impact on conversion potential dropped 90% between ad rank 1 and ad rank 10.

In addition, the conversion rates for both Google AdWords and Yahoo! Search fell 20%-30% between ad rank 1 and ad rank 10. So, as you move down in ad rank, this study found you’ll not only garner fewer clicks, but you will also convert fewer of the visitors who do click.

If you combine the lower click-through rates with the lower conversion rates as you decrease the ad rank, there is a significant impact on the keyword phrase conversion potential. In Google, for example, the study found ad rank 2 had a conversion of 54.5% versus ad rank 1. Ad rank 6 had a conversion potential of 22.5% versus ad rank 1. In Yahoo, ad rank 2 had a conversion potential of 73% in relation to the top position and ad rank 6 had a 22.2% conversion chance.

One very interesting finding in this study had to do with the conversion rate for high-volume vs. low-volume keywords. In both Google and Yahoo, the conversion rate decreased as the ad rank decreased. However, the conversion rate for low-volume keyword phrases actually increased as the ad rank decreased.

As always, take the information in search engine marketing studies with a grain of salt. Use the information to develop and test results for your own pay per click strategy.