Search engine marketers strive to rank within the first three sponsored listings on search engines. But the notion that value can be found only through the coveted top trio of paid listings is
somewhat of an old search wives tale, according to an Atlas DMT study on paid search ranking and its effect on traffic. The report from the aQuantive, Inc.-owned ad technology firm shows that
actual value derived from each of the Top 10 ranks varies depending on a number of factors.
The ad technology firm's research compares Google and Yahoo!'s Overture rankings, measuring both
relative click-through rate-or the expected number of impressions in relation to the top ranking-and click potential, or the expected drop in click volume as ranking declines. Advertisers should
expect about ten times the amount of traffic from a sponsored listing ranked first as will be garnered through a sponsored listing ranked in tenth place, says the study, concluding that
"Advertisers don't necessarily need to be in the top 3 positions. The drop in traffic is consistent with each drop in rank."
Conducted over a period of several months, the report compiles data
from Atlas DMT's integrated search marketing and online campaign management system, analyzing the performance of hundreds of thousands of keywords across multiple industry categories and rank
levels.
"The entire game of search is what rank are you willing to pay for," says Young-Bean Song, Atlas DMT's Director of Analytics and the Atlas Institute. "Being in the top spot is
advantageous," he admits, "but there's another factor here which is cost." And pricing can fluctuate from hour-to- hour, he adds.
Another factor is the search engine itself. While search
marketers are always guaranteed the top sponsored listing spot when they achieve the number one rank, depending on the keyword term and search engine, a second or lesser ranking could appear in a
far less valuable spot, sometimes not even on the first page of listings, according to Song. The decline in traffic derived from listings served through Overture is gradual as ranking decreases,
dropping from 100 percent for the top spot to 77.7 percent for the second ranking.
However, on Google the disparity between potential traffic from listings ranked first and second is greater. In
fact, the study found that the amount of potential traffic drops more than 40 percent between Google sponsored listing numbers one and two, or from 100 percent to 59.8 percent. For example, if a
keyword term ranked fourth among Google sponsored listings results in 2000 clicks in a month, raising the ranking to third will increase clicks per month to 2,436, second to 3,067and first to a much
higher 5,128 clicks per month.
"Google protects the top spot and makes it really a premium spot for advertisers," Song notes.
As shown in the report, the cost of a third place ranking on
Overture for keyword term "search engine marketing" was $5.26, around half the price of a $10.00 per click first place ranking. Because the price of landing a particular rank can also vary quite a
bit depending on keyword, industry segment and search engine, Song suggests advertisers use the study findings as a benchmark guide rather than a strict playbook.
The study "assumes that all
words have equal power," comments Chris Sherman, Editor of Search Engine Watch's daily email newsletter SearchDay. Certain market segments like Travel and Shopping are so competitive, explains
Sherman, advertisers may be better off bidding on more specific niche terms featuring product makes and models, for example. "I've seen success stories where people have had sky-high ROI with very
targeted keywords," he continues.
There's always a catch, though. Cautions Song, "When you get more specific, traffic volume decreases."
Although the study suggests that achieving a
top-three ranking isn't the be- all and end-all to search marketing, Sherman comments that search engine marketers often fight to be ranked in the top three for good reason: some of Google's and
Overture's search listing distribution partners may only display the top three paid listings.
Atlas DMT plans on continuing the research throughout the year. In an upcoming report the company
will analyze the effect of search engine ranking on conversion rates.