Search Trends - Search Engine Marketing

The second part of a report from Atlas DMT shows some interesting results. Consistent with previous test results I've seen, it shows that conversion rates decline significantly for clicks on lower-position paid placement ads for high volume keywords. The interesting twist is that conversion rates were actually higher for the lower position ads on low-volume keywords. This isn't some dinky little test, either. They analyzed July and August 2004 traffic representing 41,460,000 clicks and 408,000 keywords. That seems likemore than enough to provide a valid sample for this test.

Obviously there is going to be variations by industry and for myriad other reasons, so you'll want to run your own tests to see if it holds true, but I was surprised to see these results turn out like this.

In their report, Atlas offers the following advice for marketers:

• Balance your efficiency and volume goals. When setting target values for return-on-adspend (ROAS) or cost-per-acquisition (CPA), you should factor in the volume of conversions. You may attain the best ROAS at rank 10, but may be disappointed at the total number of conversions generated at that rank.
  
• Pay a little extra for a higher rank. Conversion rates for your highest volume keywords will drop by rank. If rank bids are close together, as often happens, it will likely make sense
  to pay the additional few cents to move up in rank. Analyze your own data to identify what bid increases are justified by rank based on the resulting increase in conversion rate.
  
• Test lower ranks for low volume keywords. Conversion rates for your low volume keywords may very well increase as rank falls. We observed this trend across both search engines. This insight presents an opportunity for marketers to lower their costs while sustaining conversion volumes for their low volume keywords.
  
• Look at your own data. Many factors contribute to the likelihood of a conversion; therefore a study such as this is primarily useful for forecasting and comparing your results to industry benchmarks. What we have shown here may significantly differ from the trends revealed by your own data. Every marketer will find unique trends specific to their circumstances. Finding the sweet spot for conversions for your ads is about measurement and experimentation.
  

Read the report for yourself