Chief Economist at Google, Hal Varian, announced recently that what we had thought all along as the Average Rank was not actually the position of the ad on the page, but rather the average position in the keyword auction. That is very big news! If you are selling on Google AdWords further reading on the AdWords blog is definitely in order.
“To begin with, it’s important to understand that there are two interpretations of the phrase “ad position.” The “page position” refers to the location on the page, such as “top ad 2” or “right-hand side ad 1.” The “auction position” is the rank of the ad in the auction that determines the order of the ads on the page. The critical point is that the reported average position metric is based on auction position, not page position.
Who knew? For years we have all thought the metric in the AdWords control panel that said Average Position was the ad position! And truthfully for years, it may have been. It might possibly be that as AdWords has decided to do away with the campaign setting Position Preference, that it decided to change what data is returned in the Average Position metric in the control panel.
What I find interesting in the blog post called “Understanding the Average Position metric” is that Google finally reveals several very important things that they have previously not clarified. They are as follows:
- Position one for your ad is the first position in the colored box at the top above search results. That means that position three or four may actually be the very top ad on the right rail depending on the number of ads in the top colored box.
- You can force Google to show your ad in a top colored box by bidding more if there was no colored box before.
- By now knowing that your Average Position is really your Keyword Auction position you know have an inkling of what the bids are by keywords and so you may actually be able to effectively decrease your bid with this information.
Hal Varian also revealed additional information that Google has found out about conversions and ad position.
“Some advertisers have asked how clicks from different positions tend to convert. In general, we’ve found that conversion rates don’t vary much with the position of the ad on the page. An ad in a more prominent position on the page will tend to get both more clicks and more conversions than an ad in a lower position, but the conversion rate (conversions/clicks) will tend to be about the same for the two positions.”