Knowledge is the Foundation To Success  

We have learned, in PPC management, that there is a very strong correlation with your Ad Position on the page and your Click Through Rate (CTR).  In almost every case (I have to say “almost” for those exceptions that always exist), the higher the Ad Position, the higher the CTR.

However, conversion is an entirely separate issue.  Do not assume that just because a keyword converts at a certain rate at one ad position that it will only convert better if you bid it to a higher position.  In fact, that is probably not going to be the case.  And once again, we need to look at the intent of the search to understand why.

In general when a visitor clicks on an Ad that is positioned further down in the results page – sometimes even page 2 or page 3 – they are highly targeted and interested in what you are offering.  The key is to find the “sweet spot” where the CTR (which will be lower at a lower position) combined with the Conversion rate brings you the best ROI.

Of course there are always exceptions to every finding, but the higher positions tend to bring less targeted traffic for several reasons.

1. The searcher is testing out their query – Did they type it in correctly? Are the results even close to what they are looking for?
2. The searcher is just beginning their research process and will click on the first couple of ads just to get some high level information.  They may come back and buy later but they are not in the “buy” stage quite yet.

What is the best way to find out your Optimal Ad Position? Test! Every industry is different. Every keyword is different .  You will find out the most about your ad position and your conversion if you have installed Google Analytics on your website.  Google has some good information on their adwords blog on using the two tools together to optimize your position.

What is the best position for your keyword?

I can’t tell you how many people think that the top #1 position is the best performing keyword position. True, the top #1 position often does provide the most amount of traffic, however the resulting ROI from that traffic might not be exactly what they had hoped.

There is no doubt that keywords work better in different positions. Fortunately, Google Analytics provides a great report that can shed light on several performance factors that you can use to evaluate your keywords best positioning. This report is called the “Keyword Position” report and it is located in your Google Analytics account under: Traffic Sources/Adwords/Keyword Positions.

The Keyword Position report differs greatly from the data in your AdWords account. While the AdWords interface will show you the average position of a keyword and its conversion cost and rate; the Keyword Position report through Google Analytics will show you visits, pages per visit, average time on site, bounce rate, conversion rates, and the per visit value for each position. If you have an Ecommerce website and took the time to implement the Ecommerce feature correctly, then you will also be able to see revenue, transactions, average value, and Ecommerce conversion rate.

Positions are broken down into two areas, just like they appear on a Google SERP. You have the top and the side, and this layout is visually displayed to the right of the keyword list. The top can have up to 4 positions labeled Top 1 through Top 4. The side is labeled Side 1, Side 2, etc. This numerical representation displayed in Google Analytics is different than the value shown in the AdWords interface. If Google displayed 4 ads in the top position, then Side 1 would be considered position 5 in the AdWords interface.

By selecting a keyword, you will see the performance of that keyword in the various available positions. For example, I might notice that my keyword “green widget” supplied 240 visits in Top position #2, however provided 253 visits in Side position #2. Most likely the CPC required for this keyword to be in Side Position #2 will be less than that of Top position #2, and therefore the keyword in this scenario could potentially generate more traffic from a lower position with a lower CPC.

Of course, visits alone aren’t everything, and you might wish to see which position generates the best Conversion Rate. Simply select “Goal Conversion Rate” from the Position Breakdown menu and the keywords conversion rate will appear next to each position. For example, you might find that Top Position #2 actually had a higher conversion rate than Side position #2, so therefore maybe the extra CPC required to maintain that position would be worthwhile to your ROI. If you had Ecommerce tracking enabled, you could actually look up the revenue generated by the keyword in each position.

At first I was surprised to see that the top 3 or 4 positions do not necessarily generate the most amount of traffic, often the positions starting in the upper right side can generate more visits than positions 2 through 4 at the top. You might very well be surprised to see how your keywords perform in their different positions.

Now, what is “Best” for your keywords positions will vary greatly based on your individual business model and your PPC management strategy. The good news is that the Google Analytics Keyword Position Report provides a great deal of information that you can use to help fine tune your bidding and optimize your ROI.

Everybody knows that Conversion Tracking is an excellent way to judge the individual performance of keywords in your PPC Advertising accounts and their ability to cause an action on your website, however as an E-Commerce business owner you may want more detailed information regarding the ROI from your various marketing campaigns. Google Analytics E-Commerce Reporting might be just the tool you need.

Google Analytics E-Commerce Reporting goes beyond regular analytics reports and can actually import sales data from your customers completed shopping cart transactions. Since Google Analytics already imports the data from your Google AdWords account, it can combine the shopping cart sales data with AdWords data to give you a very clear picture as to the ROI generated from your various campaigns, AdGroups, and keywords.

For example, while AdWords Conversion Tracking might report that the keyword “blue widget” converted 5% of the time for an average cost of $12/each, Google Analytics E-Commerce Reporting can tell you the E-Commerce Conversion Rate, Total Number of Transactions, Average Order Value, Purchased Products, Revenue Generated, Per Visit Value, and more. So, you might find out that the keyword “blue widget” generated 5,308 clicks however only 4,102 visits, with an average CPC of $0.22, converted 5% of the time, for 227 different transactions, with an average order value of $192.81, generating $43,768 in revenue, making the per visit value $10.67. It will even show an ROI of 6,796.13%, and an RPC (Revenue-per-click) of $15.37. Now that is data that you can use to really evaluate bidding and budgeting.

Google E-Commerce Reporting will show data for all sources of traffic including; Yahoo, MSN, Comparison Shopping, Direct Traffic, Referring Sites, you name it, it will track it. You won’t see cost data from these sources like you do when tracking AdWords campaigns, although you still see all of the other great data, which in my opinion is still more than enough.

Unfortunately, enabling E-Commerce Reporting in your Google Analytics isn’t as easy as flipping a switch in the settings, although that is exactly how you begin. First, you must go into the Analytics Settings/Profile Settings, and in the main website profile area you will need to click “Yes, an E-Commerce Site”, and then click save. This activates the functionality in the account, however two more things must be done before it will actually track sales data. First, a tracking code must be included in the receipt page, and then below the tracking code you will need to have your webmaster insert some customized calls that import the data from the shopping cart. If that sounds confusing, your right, it is, and it has caused many a webmaster to pull his hair out trying to get this code to work.

Luckily the code directions and an example of the code can be found here. There is also a great forum with plenty of users willing to help.

While the implementation of this Free Google Analytics feature is a little tricky, the reward at the end is well worth the effort for any business owner looking to see a more detailed picture regarding the ROI from his various online marketing efforts.