AdWords: Is 3rd Position Better Than 1st?

When you’re running a Google Ads campaign, the default mindset is “I want to be number one” in organic search engine results.

Let’s do a bit of math to illustrate why that may not be the best strategy for your business.

Here’s an example of a search results page.

Let’s say that you have a $10 cost per click for first position, so 10 clicks equal $100 ad spend.

Now, let’s say you convert 10% of those; your cost per acquisition is $100. That’s what your math might look like when you’re in the first position.

Now, third position costs less than first position. So, let’s use a $5 cost per click just to illustrate a point. At $5 cost per click, you’ll get 20 clicks, which equals $100 in ad spend. If you convert at 10%, your cost per acquisition is $50 because you received two leads.

So, one position equals two leads, and another equals one lead. When you were in third position, you were lower on the page, your cost per click was lower but you get twice as much traffic if the cost per click is twice as much.

You get twice as much traffic, you convert at the same rate, and get twice as many leads. So, from a performance-based perspective, that’s a pretty good situation!

Two ways that you can test and experiment to get to these results:

1: Manual cost per click strategy: I’m bidding $10 and these are the results that I’m getting. So I’ll decrease to $8 and see what happens with my clicks and impressions and conversions. Also, look at your average position as you’re making the change; you might let that run for 10 days and then it might go down to $7 and $6. What you’re doing is decreasing the bid enough as to where your ads are still showing, but your average position is slowly increasing.

Once your budget isn’t being hit, impressions start to dip or you’re not getting clicks, you’ve gone too far and decreased the bid too much. So start bumping it back up! I like to go from my current bid down to a lower bid and get to a threshold that drops me off the third position. Then I can just start increasing my bid again.

2: Maximize clicks approach. Here’s what we like to do at ParaCore.  Maximize clicks works well if you are hitting budget in your campaign. We change the campaign to maximize clicks.  Doing so might auto-adjust your bids down to a position where you’re getting as many clicks as possible.

And if that’s happening, it doesn’t matter if you’re in first position, third position, sixth, seventh, or eighth. If my Google Ads budget is being spent and my click-through rate is consistent, I don’t care if I’m all the way at the bottom of the page!

So, in summary: strip away the vanity of wanting to be first, and you just might outperform the competition in the long run!