In a recent post on Google’s Inside Adwords blog, Google revealed that the position of an ad on the page does not affect the ad’s conversion rate (see definitions below).

It remains true that people are more likely to click on search results that are higher on the page than results that are lower on the page.  However, they are just as likely to buy whether the ad was higher or lower on the page. Google was able to determine this by looking at examples of the same ad in different positions, and looking at the corresponding conversion rates.

Makes Sense

This makes intuitive sense. Once the click brings a prospect to your website, whether she buys your product or registers for your service has nothing to do with where the ad was on the search page.  Whether she buys has everything to do with the relevance of your web page compared to what she was looking for.  So, as long as you are on the first page and can be seen, the conversion is driven by the relevance and quality of your website.

Implications for Using Adwords

This suggests that there may not be any benefit in trying to get your ad higher up on the page, assuming it’s already on the first page. With Adwords, you are paying by the click.  So if you buy 100 clicks, it may not matter to you whether the ad was placed high on the search results or lower on the page.  You’ll get your 100 clicks either way.  Whether they convert (i.e. buy or sign up) depends on the relevance and quality of your site.

Definition of CLICK-THROUGH RATE (CTR)

The “click-through-rate” is the number of users who clicked on an ad (on a web page) divided by the number of times the ad was delivered (a.k.a. impressions).

click_through_rate = clicks / impressions

For example, if a banner ad is delivered 100 times and 3 people click on the ad, then the click through rate is .03 or 3%.

Definition of CONVERSION-RATE

The “conversion rate” is the number of people who buy the product (or register for your service) divided by the number of people who see your ad.

conversion_rate = buys / views

It can be the ratio of buyers to viewers, or joiners to viewers, if the site is asking for membership.  For example, if 100 people view your ad and 2 buy your product, then your conversion rate is .02, or 2%.

By the way, Google has no way of knowing how much traffic your site actually gets. That’s why they count the number of links to your site. They use the number of links pointing to your site as a rough indicator of your site’s popularity. Google and other search engines get this link information from their web crawlers.

However, there have been some recent changes at Digg that reduce the number of links that are likely to point to your site. Under certain circumstances, links that could point to your site now point back to Digg. This increases the traffic to Digg at the expense of users and publishers. Consequently, these changes reduce the advantages of using Digg. Here are two recent reports from Mashable.com that explain the issue in detail: Digg Accused of Twitter Traffic Bait and Switch and Digg Just Highjacked Your Twitter Links

Digg, of course, continues to be a good way to get more traffic to your site. When you “digg” an article, you are recommending it to others who may then check it out. This traffic to the article still happens.

We will report on any further changes from Digg, or on any response from Digg regarding these changes.

This is a training site devoted to helping you thrive with a home business. In these pages you’ll find a diverse range of articles. We will explore the practical, psychological and spiritual levels, as they relate to your growth and prosperity in your business. For example, you can expect to find how-to articles on marketing strategies, such as how-to use Google Adwords or how-to use Squidoo articles to drive traffic to your site. However, you can also expect to find articles that help you to clear any internal debris that may be in your way. For example, there will be articles on the Psychology of Money and how to reprogram your thinking for success.

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