Higher Paid Search Rank Not Always Better, Study Says

The effect of rank on conversions from paid search listings differs depending on keyword volume. That’s the conclusion of the latest Digital Marketing Insight (DMI) research from aQuantive’s Atlas DMT.

“Many have hypothesized that conversion rates might actually rise at lower ranks, theorizing that users clicking on lower listings are more qualified prospects, but this approach turns out to be neither entirely right nor wrong,” said Young-Bean Song, director of analytics for Atlas DMT and its research and education arm, The Atlas Institute.

The research confirmed that, for high-volume keywords, conversion rates generally fall as rank decreases. However, when looking at the bottom 80 percent of keywords based on click volume, conversion rates often converted at higher levels than the top ranked listings.

For example, at Google, ranks 8 through 10 for low volume keywords had about 30 percent higher conversion rates than the top ranking. While at Yahoo’s Overture, low volume keywords showed sustained conversion rates across all top 10 ranks.

“Every marketing medium has the fundamental trade-off between volume and efficiency, and search is no exception,” Song said. “Understanding factors such as rank on traffic and conversion provides marketers tools to better control costs, while maximizing targeted traffic and sales.”

Atlas DMT, an operating unit of aQuantive, released research in July focused on how paid search engine rankings impact traffic. According to that research, there is about a ten times difference in potential traffic between the first and tenth paid search position rankings. Google showed a 40-percent drop between the first and second positions, while the difference on Overture was not so pronounced.

Utilizing data from Atlas Search, the company’s integrated search marketing and campaign management system, traffic representing more than 41 million clicks and 400 thousand keywords during July and August 2004 were analyzed. The analysis took into consideration advertisers’ “primary” conversion metric, which for most represented online sales, but also included conversions such as lead acquisitions, account sign-ups and requests for information.