So you want to maximise your paid search click-through rate (CTR), while paying as little as possible. But, is it better to bid a lot to ensure a top position, or is it more efficient to pay less to get a middle of the range position? Also, what sort of returns can you expect from a top or middle of the range position?
To answer these questions we need to begin with understanding the average CTR of each position in the paid-search listings and the average cost-per-click (CPC) for that position.
At iCrossing we sought to better understand the paid search market and conducted analysis on the CTR and average CPC for each of the major three UK search engines (Google, MSN and Yahoo!). We collated hundreds of thousands of paid search results from past campaigns, spanning dozens of clients and going back many years. Our aim was to determine typical click through rates, so we removed:
- all branded keywords as these are liable to have a greater CTR for the brand themselves and lower for competitors, and;
- low volume keywords where only a few ads may show.
The results were both insightful and surprising.
The results for Google and MSN showed an exponential curve with rapidly declining CTR, which begins to plateau after the first handful of positions. Google and MSN have comparable CTRs with Yahoo! having the lowest CTR of the three (more than half for the top spots), but aligning with Google and MSN at around position 6. There also seems to be an intriguing secondary peak for clicks around position 5; which for Yahoo is top of the right-hand side bar.
Why does Yahoo have such a low CTR compared to the other engines, especially when you consider the amount of real estate given over to paid ads in Yahoo? We would suggest that Yahoo’s methodology for discounting clicks from bots is not as rigorous as the other engines; as also evidenced by the vastly inflated figures the Yahoo Search Term tool used to output.
So how does this relate to your bidding strategy? Well, if you know the CTR and you know the estimated traffic by search term, you can calculate the amount of traffic each position will deliver and base your bidding strategy around this information.
In the next post we’ll look at the average CPC by position and how that information combined with the information presented above can be to create a highly optimised PPC campaign.
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October 21st, 2008 at 11:52 am
Hi,
It depends also on how strong the brand is.. even on non branded terms brands that have a strong brand in the description can have just as good click through rates in position 4 as position one.
Thanks,
Zoe.
October 21st, 2008 at 2:15 pm
Yahoo impression figures should also be taken with a pinch of salt. They (only my opinion) consistently over report the amount of searches that are undertaken which leads to a low CTR. This has pretty much always been the case, but CTR figures are not to be trusted.
CTR is also very dependent on the match type used i.e broad match strategy will most often lead to far lower CTR rates than either phrase or exact. The position to click/conversion ratio is also individual to specific verticals. If the vertical has few or not many direct competitors, it seems that the correlation between rank and click/conversions is far better than other verts that have a large competitor base.
October 21st, 2008 at 2:21 pm
Yeah, I’d agree with Wade. Although not definitive, I would suggest Yahoo! impressions are considerably over reported. However the linear trend seems accurate to me…
October 24th, 2009 at 2:15 pm
What about the CTR for Local Business Results.
You get the first three sponsored links, then
you get the Local Business Results,
then the organic results plus the sponsored links on the right.
A complete mess, and I have a feeling a lot of people click the
Local Business Results link and disappear looking around google maps results.
Here is an example query:
http://www.google.co.uk/search?hl=en&q=chinese+takeaway+hackney
* Now this query did not list the three sponsored links at the top when I
tested it.
I am just wondering how the CTR is for the main link for Local Business Results, example:
“Local business results for chinese takeaway near Hackney, Greater London”
And the CTR for the 10 results listed for Local Business Results.
It may be better to be listed at the top for Local Business Results rather
than at the top for the actual main search results.
Not looking for exact figures and deep analysis, as I can imagine it is hard
to test.
Just a general idea would help.
Thanks,
Sinoea