More profitable to be in second/third position?

http://www.free-seo-news.com/newsletter330.htm#facts

According to the above article, a new study shows: "it is not profitable to have the first position for one to two words keywords. The most profitable positions in the paid results for short keywords were the fifth and the sixth position."

Similarly: "Keywords that consisted of three-words were profitable when the website was listed in the second or third position."


I don't use paid listings, but if you go down you'll find a paragraph about how this applies to organic listings. They don't have much to say.

I take articles like this with a pinch of salt.

What are your thoughts?

It's obvious that as you go down the page the cost becomes more attractive thus allows your ad budget to go further...

But that IS NOT PROFITABILITY in itself; that's merely reducing the bottomline.

Compare those same result with actual "CONVERSIONS" and see where the margins are...

If the idea is to get to the destination for the cheapest buck... their possibly correct...

But interested buyers or "HOT LEADS" are not pissy people that have been "COLD CALLED" - so I can say categorically since the study says "PROFITABILITY"... and they didn't include sales in their measurements... these claims are all hype and no substance.

IMHO!

AOL accidental release of 1/2 million results queries about 2 years ago showed... 40% of all searchers never go by #1 and 68% of searchers stop at #3]

That sampling was across the board not drive by niche conditions.

The key metric is profit per day.

A alterninate explaination is if people have gotten this low and not found what they are looking for they sart clicking on the sponsered listings as sick of looking in organic listings..

It is obvious, that as you get lower in the rankings in your paid search campaign your cost per click is lower meaning you are getting your clicks at a lower price than if you were at the first position.

Some companies just waste their money on their paid search campaigns just so they can be #1. I laugh at them!

Maybe they are laughing all the way to the bank.

How much are you selling at #7?

You are right in a sense... sometimes companies that are #1 can still have a huge profit margin. But for high competition keywords it is pays to NOT bid out everyone so you can increase your profit margin.

If I have a kickass offer that gets clicked a lot I don't have to outbid everyone to be ranked at #1.

Also, your profit margin might be double what mine is but if I sell three times as many units (because I have a kickass price) then my profit is higher than yours.

PPC is not a simple venture. If you go into it with one dimensional thinking those guys are probably going to eat your lunch.

You are 110% right... You can't start a PPC campaign with one dimensional thinking, you have to evaluate your competitors, your profit margin, your conversion rate, etc. etc.

I'm just saying that you don't have to bid for the #1 position to be successful in paid search. Thats all..

I learned all that when I got certified by google -> mitchelltylerdotcom/about

It certainly isn't as simple as being #1 for PPC to make the most money. Cost per conversion and the regular profit you make from it is all that really matters.

Very recently, in light of the current economy, a client decided to stop bidding aggressively for #1 in PPC (something they've been adament about for some time.) Once we dropped to #3, our competition began noticing, and adjusted their new positioning (either manually or auto) back to their previous position. We then followed suit, and the cycle continued. The simple decision to change our position from #1 helped us control the market for our keywords. The prices dropped drastically across the board, and it seems we're still fighting to stay down at #3.

The outcome: Almost as many clicks as before, much lower CPC, and roughly the same amount of conversions. Everyone bidding for our keyword won on this one.

Nice, now that's the way to do it! Good story BERG!

Thanks, but I write that story with a twinge of pain. I build sites and do SEO for other people as well as myself, but also use Adsense pretty heavily. When this kind of thing happens, it hurts me to know that there are some people out there feeling their daily income shrink.

I guess I need to stop being soft. It's not my wallet, and business is business.