Know the Difference Between Cheap Price + Great Value

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Frank Wehrmann
Director
6P Marketing

The other day, one of my colleagues asked me to help out on an online advertising performance challenge. Here is one of the charts I was asked to review:

Campaign Impressions Clicks CTR
Google search: Top 11,574 242 2.09%
Google search: Other 22,665 24 0.11%






What this simplified chart shows is that when our client’s ads run in the Google search network, those that are positioned at the top of the page, while being served ½ as often (impressions), are clicked on 10 times as often. This yields a click through rate that is 19 times as high as the click through rate for the ads in the “other” positions.

The chart for Google partners told a similar story:

Campaign Impressions Clicks CTR
Google search: Top 38,078 1272 3.34%
Google search: Other 463,861 487 0.10%






When our client’s ads run in the Google partner network, those that are positioned at the top of the page, while being served less than 1/10th as often (impressions), are clicked on 2.6 times as often. This yields a click-thru rate that is 33 times as high as the click through rate for the ads in the “other” positions.

So, now I’ll pay off the headline of my article:

  • The bid-price of the top positions is 2-3 times greater than the price for the other positions.
  • The bid-value of the top positions is six to ten times greater than the other positions.
  • The conclusion is that this client should willingly pay the premium bid-price to capitalize on the superior value proposition associated with a top position.


The Implications for your account, regardless of who manages it for you are:

  • Top positions on Google Search and Partners yield a superior return on your investment.
  • This is even more important for those of you with products searched for on mobile platforms where screen size limits listings to two or three at most.
  • While this premium position argument for online advertising may be new to you, it is old and fundamental to the manner in which media is consumed and sold around the world. Premium advertising positions on TV, Radio, Magazines, Newspapers and Outdoor all sell at a premium price because they provide a demonstrably better return.
  • The same is true for non-media investments including blue-chip stocks that are more stable and offer the investor the promise of steady growth plus a regular dividend.
  • The same is true for real estate where a better location results in stability in tough times and greater growth in good times.


The bottom line: Stop looking for Cheap. Go for Good.

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