Why Aggressive Bidding & 1st Place in Search Results Are Not the Best Option
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As an online marketing agency client, I’m sure you’ve searched for your business on Google and realized you’re not on the first position. Reached for the phone and called the Google Ads specialist to do something to climb you up.
As a Google Ads specialist, you definitely recognize the situation.
In this article I’ll show 2 real situations where a high CPC (cost per click) and a top position doesn’t necessarily mean a high conversion rate.
1. How do you decide if the paid CPC for a word brings you the best results?
Google Ads gives you the ability to see the estimated CPC to appear on the first page, in the top positions or even the first one. By simply adding three columns that accurately indicate the estimated CPC for each of the three situations (the Keywords tab -> Columns -> Attributes) and by analyzing the average CPC, you can draw relevant conclusions about the effectiveness of your bidding strategy. At the same time, it is important to pay attention to the average display position and conversion rate. Following the analysis, you can decide what words saves you budget and which ones are really generating added value.
Google Ads gives you the opportunity to ……TEST. When testing, consider keeping all controllable variables unchanged (allocated daily budget, ad models, landing page, extensions, campaign level settings, etc.). The only thing you modify is the maximum CPC you’re willing to pay to influence the average search position after the bidding. Of course, it is important to consider that a big difference between the test periods can influence the results as the search volume may fluctuate and the bidding strategies of other advertisers may vary depending on the season.
In order to better understand the importance of analyzing the average CPC and average search position, and also the benefits of testing, I will show you two situations where different values for the two performance indicators influences the conversion rate in an obvious way.
In the first case it can be seen that a ~ 75% CPC decrease and an only ~ 12% increase in the average search position led to an almost 10 times increase in conversion rates. It’s an atypical situation (usually lowering the CPC will lower the average search position. The situation submitted in this case may happen when the competition drops and the number of advertisers entering the auction is small, thus bidding lower). The conclusion is that a less aggressive bidding that leads to a lower search position may lead to higher conversion rates.
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In the second case, as polar opposites we can see that a ~12% CPC growth and raising the average search position with ~20% resulted in a ~20% lower conversion rate. The conclusion is that an aggressive bidding doesn’t necessarily mean a better search position and also does not imply a direct increase of the conversion rate.
The overall conclusion is that testing the various scenarios for the average CPC and average search position can bring unexpected results in the conversion rate. There is no general rule to apply since there are big differences between niches, level of competition, and user behaviour vis-a-vis the product/service (conversions come largely from mobile where an average search position below 2 means the bottom of the page or conversions come from desktop, where a search position over 4 ensures the result above organic ones).
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