What PPC Bid Position Is Best?

This week, I want to answer a question that comes up with a lot of PPC beginners: what keyword bid position is best? There’s a lot of misinformation out there about this, so I wanted to offer my own opinion and what has worked for me in the past.

A lot of pay per click marketing newbies assume that getting the number one position is best. While this is guaranteed to get you a lot of traffic, it’s not always the best strategy. Remember, PPC keyword bids are based on an auction system. If you want to be at the top, then you need to bid the highest (and have a pretty decent quality score, but that’s another blog post entirely…). But think about what happens when you’re up against another deep-pocketed competitor who also wants to be at the top no matter what. You’ll end up getting into a bidding war with each other, and will drive up each others keyword bid prices as the auction goes ever higher. This will continue until one of you runs out of money or comes to your senses, whichever comes first.

Now the funny thing about being in the top position is that it almost assures high traffic volume, but doesn’t necessarily offer the most conversions. Most search engine users who are shopping around for products and services are on an information-gathering mission. They want to compare prices and product selection before they make a choice. This means that they are probably going to click on several results (PPC ads and organic results) before they actually complete a transaction. So being #1 isn’t going to do you much good unless you offer a better product than the other guys they click on.

But, you still need to be pretty visible so that you’re in that initial selection of options. That’s why I always try to shoot for a bid position of around 3 to 5. You’re still showing up at the top of the page (around the first result on the sidebar), but you avoid the inevitable bidding war that comes from going for that top position.

Ultimately, the best keyword bid position is the position that offers the best return on ad spend. That’s up for you to decide. How much ad spend can you afford before it eats too far into your profit margins? Or is it worth it to lose money on an initial customer acquisition in the hopes of gaining a customer that will provide a high lifetime value? These are all serious questions that you need to ask about your advertising efforts, and the answer will vary with each business. Fortunately, PPC gives you the metrics you need to make informed decisions to ensure profitable keyword positions. But it’s up to you to use them.

About Shawn Livengood

Shawn Livengood is a search engine marketing professional based in Austin, Texas. He has extensive experience managing pay-per-click ad campaigns for clients in various industries, from small home-based businesses to large international companies. You can connect with Shawn on Google+.
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One Response to What PPC Bid Position Is Best?

  1. Gargoyle PPC says:

    Lots of analyses, including one by Google, show that position has no effect on conversion rate. As you said, the optimal position is at the point do you reach diminishing returns (unless it’s a pure branding campaign)