Why you should never bid for a Position in AdWords Search?

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Many advertisers want their bids to be adjusted so as to achieve a certain position. The position could be 1, 2, 3 or any number. There are many fundamental problems with this approach to campaigns.

Worry about your conversions not position.

One should make changes to bids by only looking at the conversion ratio of keywords. The average position will be nothing but a result of this change. Let’s take a simple example here. Our aim is to get maximum conversions at 100$ per conversion.
Keyword 1 has a conv ratio of 10% & Keyword 2 has a conv ratio of 5%. Your bid change should be so as to get Keyword 1 at 10$ & Keyword 2 at 5$ so as to generate conversions at 100$.
You see what I did there? I completely ignored the average position and that is precisely what you need to do too. Average position should be a result of your strategy not your target

AdWords Auctions are dynamic

Google AdWords auction happens every time a user searches in Google. Although you are not changing the bid every single auction, Your effective bid will change due to the complex Google algorithms which takes in multiple factors like your Ad, User Location, Previous performance etc. This effectively gives you a different position every time a user makes a search or no position at all. So it is never possible to get the same position every single time. What you will see is a distribution graph like the following.

Impression weighted distribution of position
Impression weighted distribution of position

In the above example, although the average position is around 3, Only around 30% of the impressions happened from this position.

No evidence to suggest position related conversion ratio change

Most common argument I hear from people advocating bidding for average position is that the conversion ratio is higher for top position (I have heard the reverse argument saying that other positions have higher conversion ratio). In the countless tests people have conducted over years, there is little to suggest that there is any such correlation. Most of the time the conclusion comes after incorrectly interpreting data.

Conclusion

Data suggests that one should not bid for position. Always keep your business objective (maximize conversions) in mind while changing bids but not any other metric like average position.

About the author

Salil Panikkaveettil

CEO and co founder of AdNabu. Exploring the intersection of data and marketing

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