Ad position and CTR: How do they impact your conversion rate

It has become vital to learn how to use your keyword ranking and click-through rate data for an improved performance of your paid search campaigns. Brands want to see their ads rank at the top of Google and have a great conversion rate. 

But this can be challenging especially if you don’t seek the professional help of an expert digital marketing agency. Get benefitted from our digital marketing services in San Francisco.

We help you understand the impact of these two metrics, and how to think about these metrics when optimizing to improve the overall health of your paid search campaigns.

Vanity vs. performance

Marketers like to run search queries periodically to see if their brand or clients’ ads are at the top. And it feels good to know that theirs is the number one. It’s totally understandable and there is no denying the feeling that all’s right with the world when your brand’s ad takes pole position.

However, being number one comes with a higher cost per conversion as there is an ongoing struggle to deliver both efficiency and volume.

For instance, if you pulled in various account data and looked at the relationship of cost-per-conversion between different metrics like absolute top impression share and click-through rate (CTR), the findings probably won’t surprise you, but seeing the data often forces you to think about your account differently.

Do get in touch with our PPC agency in San Francisco for expert advice and guidance to manage your PPC.

Cost per conversion vs. absolute top impression share

When Google made a decision to remove the average position in 2019, it was a solid move that focused on results versus vanity. The metric that they provided to take its place was absolutely top impression share. Giving advertisers what they needed to answer, “Are we number one?” and “Are we above organic rankings?” 

Data was used to compare the cost per conversion versus absolute top impression share over the past year.

The hypothesis was that the more frequently brands were in the true number one position, the more expensive those conversions would cost them. Effectively a tradeoff between efficiency and volume.

The data showed a 60% increase in cost per conversion from ads that were <10% absolute top impression share to those that were >80%. There are truly outliers. But the trendline tells the story. 

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Cost per conversion vs. click-through rate

And then the same data was used to compare CTR vs. cost-per-conversion. This is a little starker of a story.

The cost per conversion goes down as the CTR increases by a larger margin and then the CTR data scale was changed from high to low, left to right. And it all indicated that having a better CTR provides a better cost per conversion. 

And here’s why:

1. Keywords that have a higher CTR resonate better with consumers and therefore flow through to having a higher conversion rate/lower cost per conversion.

2. Branded terms typically have the highest conversion rates and CTRs. 

The key is to focus on relevance as a focus on relevance, branded or otherwise, you give you better conversion rates.  

3 ways to improve your paid search campaigns

Focus on relevance

Yes, Google rewards relevance. This comes in the form of higher quality scores by keywords matching ad copy, which also matches landing pages. The better and larger you can create tighter keywords groups based on themes, the better.

The best lens to view this through is the customer experience. Think from the customers’ perspective about what the customer is searching for. What would they expect to experience when reading that ad copy or clicking through to the site? The answer to this question is your solution. It will lead you to a relevant experience and reward you with better performance.

Understand efficiency and volume

This is a constant tradeoff done in business all the time. And brands do it with the pricing of products, but we often don’t see it as frequently in marketing.

The method to perform this is to find a group of keywords that are performing well and see how far you can push them. Run a test to increase bids by 25-50%, raise the budgets and analyze what happens.

1) Is there an incremental lift?

2) What was the cost per incremental conversion?

3) Is that tradeoff better than any other opportunity you have to spend on either other keywords or marketing tactics?

The best thing about paid search is that you get real-time feedback that helps make informed decisions. Use that to your advantage.

Getting in touch with our lead generation agency in San Francisco can help you in this regard.

ABT: Always be testing

This has to be performed as a combination of the two prior recommendations but the key is to keep testing. Because, the algorithms, your competitors, and your customers are all constantly changing.

Ongoing ad copy testing is just one element. Create a test to learn the strategy and work through it methodically. Have a hypothesis and prove or disprove it through your testing. Keep repeating the process. 

Summary

Your ad position and CTR does impact your conversion rate. If you are in a high ad position, then your ad is more likely to be seen by people and if your CTR is high, then your ad is more likely to be clicked on. Hence, if you want to have a high conversion rate, you need to make sure that your ad position is high and your CTR is high. 

Do get in touch with our digital marketing in San Francisco. We help you create a compelling ad that stands out from the competition by targeting the right people with your ad.