adwords on budget: target specific ad positions to optimize cost and budget

Google Adwords is an easy to use and popular platform for internet marketing. Undoubtedly it garners the most visitors for your ad campaign compared to most other ad networks. This also means that you can very easily run out of budget very quickly. One important and easy way to optimize your campaign is to target specific ad positions for your keywords.

If you are on a smaller budget, then you want to make sure that you are using it optimally. Sometimes, it means getting less number of hits but more meaningful ones.

One of the ways that you can reduce your cost, is by targeting lower spots on the search page. On the Google’s search results page (SERP) there are about 11 spots or ad positions available for Adwords. The top three that appears on the top of the search results are considered premium as these usually get the most hits.

So, that leaves another 8 spots that are available on the right hand side of the page. Usually these spots cost substantially less than the top three. Also the cost decrease as you go down the order.

If you are routinely running out of budget every day, then it is a good idea to target lower or specific ad positions. This could still get you just about the same amount hits for a much lower CPC (Cost per Click). Let us look some of the pros and cons of the top three positions versus the lower ad positions.

Top Positions

While talking about the top positions, usually the top three positions are being the ones that are mentioned. The top three positions do come with the following characteristics among other things.

More Clicks: Getting a higher ad position will typically fetch you more clicks, but at a higher cost both budget wise and in terms of CPC.
Quality Score: A good quality score often helps here. Having a good quality score will not only get a higher position but at a lower cost as well. Actually having a high quality score is essential in being considered for the top three positions.
High Competition: If the keywords you are targeting are popular keywords then you can run into high competition which will drive the cost up.

Lower Positions

Lower Cost: Lower positions usually cost less, but it is not that straight forward. It can also depend on the quality score of the keyword. If you have a low quality score then you are better off trying to improve your quality score rather than compete for a specific ad position.
Engaged Customer: You are much more likely to end up with hits where the users are actively looking for what you are advertising for rather than with visitors who clicked on the first link they saw. This is a generalization and your experience might vary, so be sure to test the patterns of your visitors. Ideally, and hopefully you will end up with less hits but more engaged visitors which is a better return on investment.
Quality Score: Lower positions will garner less hits, which will affect your Click thru rate for the ad. It can be argued that lower CTR will also affect your quality score negatively. CTR is only one of the many factors that affect the quality score. So, you need to be careful in how far low you want to go with ad position. This is very much specific to your ad and keywords.

Unfortunately, you cannot explicitly target an ad position in Adwords. Ideally, you set the maximum bid amount of a keyword and depending on the competition your bid will get you a spot on the results page. So, the only way you can manipulate the position for your ad is to do it indirectly by bidding a lower amount than the suggested cost.

Step 1: Start out by bidding the suggested cost or one dollar which ever is lower for each of the keywords. Also, be sure the set a low enough and affordable daily budget so that you don’t bleed money when you are “testing” your campaign.

Let the ad run for at least a week (or till it has received enough impressions, about a 1000 which can be multiple weeks), then check what the average position for your ad was. At this time, you have to consider mainly three values: Number of impressions, Average Ad position, Ad Cost per click (CPC).

Impressions: If you are not getting enough impressions, because your ad position is too low then you will need to increase the bid amount. If your bid was too low, then it is quite possible that you have slipped out of the first page on the search page. There are other ways to improve your Adwords impressions as well.

Average Ad Position: Check the current average position of your ad and compare it with the previous value and your desired position. If you are getting more than enough impressions at the current position, then you can bid even lower for the keyword to further lower your ad position.

Cost Per Click: This should have decreased as you are now bidding lower.

Step 2: Adjust your bid for each keyword as described above. The adjustment should mostly be to bid lower than the existing bid, if you find yourself having to bid higher then either you have reached the “sweet spot” for that keyword or your quality score is bad. If you are not getting enough impressions even after bidding higher amounts it is quite possible that you have a low quality score and you should work on improving the quality score of the keywords.

This process could take a couple of iterations to perfect. Also, you will need to monitor the stats every couple of weeks or so and fine tune it to keep the ad showing in an optimized way.

The position of your ad can vary depending on several other factors which are out of your control, such as more (or less) competition, changes in the bid amount of your competitors etc., even when you have not changed your bid. This is the reason that you will need to run the ad with the same bid for at least a couple of weeks to get a good idea about the ad position.

The key to this approach is to hit the sweet spot between enough impressions, sufficient hits, a specific ad position on the page and the cost per click of the ad. This will allow you to get the optimum return on your investment within the limited budget that you have.