It turns out tire kickers aren’t usually a problem

Google’s Chief Economist recently released a study that found little difference in conversion rate (the percentage of visitors who do something, like buy or sign up) caused by the ad rank of Adwords ads.

In plain English, this means that whether your ad shows up in first place or tenth place, it probably won’t have much impact on the likelihood of the clicker turning into a client.

Why is this news?

Okay, admittedly this is kind of an academic revelation, most interesting to people who spend too much time thinking about online marketing.  However, many average Joes running PPC (pay per click) campaigns hear theories about PPC ad rank, which they try to follow, and which this study addresses.  For example,

- People who click on the highest ranking ads are “tire kickers,” and so you’re better off having your ads rank in the middle or bottom.

- People who browse down to low ranking ads are odd/crazy because it’s usually unnecessary to browse that far, so you’re better off having your ads rank in the middle or top.

- People trust ads that appear in the top slots, so you should always make sure your ads appear at the top.

Although anyone who tracks PPC ads can answer these questions themselves, most people don’t, so they pick a theory, follow it,  and try to keep their ads ranking accordingly.

What Google found

Google found that, on average, conversion rate only varies by 5% for the same ad in different positions.  This means that, on average, the “tire kicker” problem or other theories aren’t worth worrying about.

It’s important to note that outside experimental conditions where you’re comparing the exact same ad and landing page in different positions, there probably is a larger difference in conversion rate.  Why? Because of Google’s Quality Score — if the score works as it should, Google will automatically bump up ads of higher quality and relevance to what the user is searching for.  Naturally, a higher quality and more relevant ad/landing page will convert better.  So don’t take this to mean when you look at a given page of results, people are buying at the same rate across all the ads.

Further caveats

This study concluded that the difference in conversion is small (5%), not that there is no difference at all.  For a lot of marketers, a 5% increase in conversion could be well worth the effort, especially if it costs less per click.  Secondly, the 5% difference in conversion rates was on average, which means in some cases the difference was larger.  In your particular case, the difference could translate into a significant amount of money.

Final take away

The bottom line for this study is that your ad rank probably won’t make a big difference in conversion rate.  But a larger, and perhaps more important, point is that the only way to know for sure is to test and track your own PPC ad performance.

When it comes to PPC, the beauty of it is that you’re able to precisely track everything, down to a very granular level, unlike with other forms of online marketing– and if you setup your tracking correctly, you can arrive at the cost per phone call or even cost per client.  That’s the statistic that really matters, right?

Do you have tracking?

Most lawyers who run their own PPC campaigns aren’t tracking at all.  If you’re in that camp, this blog post should be a wake up call, because you can improve your ROI by tracking a variety of variables in your PPC campaigns, including ad copy, landing pages, audience targeting, geo targeting, etc.  Ad rank and its effect on conversion rates is just one variable among many that can impact your PPC ads’ effectiveness.  If you’re not optimizing for these variables, which you control, then you’re wasting money.

This entry was posted on Wednesday, September 9th, 2009 at 2:43 pm by Nick and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.