Guidelines on Conversions, Paying for High Page Rank
"If your page rank rises from the fourth spot to the third, there is 43 percent more conversion," she said. "There's a 54 percent jump in conversions from third to second. On the business-to-consumer side, a 71 percent increase in conversion occurs if the page rank moves from second to No. 1."
I am constantly evaluating this question, too, and though I agree with Laura's basic guidelines I find her quote to be misleading. Perhaps it was taken out of context when this article was edited. Either way, the way it is stated as fact is really over the top. Though this may have happened to a particular word or phrase, I doubt that there was a statistically valid set that was analyzed before making this bold statement.
It seems that this quote will put many new and experienced search word managers in uncomfortable water with their bosses or clients who may not be direct response marketers nor understand the subtleties of our jobs. It has been my experience that being in the top three is helpful, but we often have found that the conversion between the top and most expensive spot and the third spot is minimal.
I hope that you will consider the impact on the lives of the daily direct response workers when "bosses" read DM News!
Laura Frizzell responds: The quote was taken from a larger presentation on bid strategies that impact conversions. It is always difficult to capture an entire presentation in a short article. The data that was referred to represented the average of all BTB and BTC advertisers that are running through the bid management system that we use: SearchIgnite. It is a one-month snapshot of data from Google. Yahoo shows similar trends. Also, it showed that total conversions increased at greater increments with each increase in rank. We've found the conversion rate to be the same regardless of rank.
The point was to show that a marketer needs to consider whether they are willing to take less gross margin per unit to gain the additional clicks and transactions at the higher rank and cost. Profitability is a function of volume and margin per unit. A company can take lower margin and maintain profitability if they get more volume.
You are correct that a search marketer cannot take these averages and apply them to every campaign because each campaign is unique. After the presentation, a question from the moderator was how a marketer should use this information to manage an individual campaign. The answer is that though this information is interesting directionally, to maximize a campaign you would need to determine the graph for each campaign and even for each keyword. We use technology that does this math for us.