Search engine has rapidly gained in popularity because of the targeted nature of the traffic it provides. Many advertisers see a high click to conversion rate for search traffic compared to other forms of online media; many markers think that is a most efficiency way to reach their target audience. However, advertisers have also seen an increase in the average cost per click for paid search advertisement.

 

Most paid search ads are sold on a pay for position model (Nico Brooks, 2005). For example, you can adjust the rank of your ads by raising or lowering your bid. Lowering bids decrease advertising costs, but does it also decrease the effectiveness of your ads?  I don’t think so………

 

What is Conversion rate? Conversion rate is the percentage of click through that result in an online conversion. Having said that, let’s take a look at Google case that will help you to get the pictures.

 

A study done by Nico Brooks, American Marketing Association in 2005 shows, the conversion rates for Google only fall about 20%-30% between the rank 1 and rank 10, the overall impact on conversion potential was a 90% decrease. The dramatic drop is mostly driven by the fall in click potential rather than big differences in conversion rates.

 

Figure: Google Adwords Date

 

(Source: Nico Brooks, American Marketing Association, 2005)

 

 

 

Today many factors contribute to the possibility of a conversion, therefore, I think understanding the online traffic analysis with the impact of rank on click to conversion rate can better control the cost of search marketing campaigns while maximizing targeted traffic and sales.