Impact on Conversions from Paid Search Listing

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In search of the tools to make strategic decisions about paid search advertising, Atlas DMT, a digital marketing technology provider and an operating unit of aQuantive, released research demonstrating the rank of a paid search listing and its impact on conversions.

The Atlas DMT Digital Marketing Insight (DMI) is a follow-up to research released in July, which focused on how search engine rankings impacts traffic.

“Paid search’s success is undeniable and, while its popularity has grown rapidly, so have prices,” said Young-Bean Song, director of analytics, Atlas DMT & The Atlas Institute. “Every marketing medium has the fundamental trade-off between volume and efficiency, and search is no exception. Understanding factors such as rank on traffic and conversion provides marketers tools to better control costs, while maximizing targeted traffic and sales.”

Atlas’ two paid search DMIs provide conversion modeling and forecasting benchmarks for the top 10 rankings in paid search, and can be used to plan more strategic search engine marketing campaigns.

“Many have hypothesized that conversion rates might actually rise at lower ranks, theorizing that users clicking on lower listings are more qualified prospects, but this approach turns out to be neither entirely right nor wrong,” said Song.

The research discovered that conversion rates generally fall according to rank, and this was especially true for high volume keywords. However, when looking at low volume keywords (the bottom 80 percent of keywords based on click volume), in many instances conversion rates in the lower ranks converted at higher levels than the top ranked listings

For example, at Google, ranks 8 through 10 for low volume keywords had about 30 percent higher conversion rates than the top ranking. While at Yahoo!’s Overture, low volume keywords showed sustained conversion rates across all top 10 ranks.

Utilizing data from Atlas Search, the industry’s first integrated search marketing and online campaign management system, traffic representing more than 41 million clicks and 400 thousand keywords during July and August 2004 were analyzed. The analysis took into consideration advertisers’ “primary” conversion metric, which for most represented online sales, but also included conversions such as lead acquisitions, account sign-ups and requests for information.

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