“I want to come up first in Google”
This statement echoes in my head because 90% of the time it’s in the first few words of each phone call I get. This statement creates great conversations on the business, products, services, market areas, and other key elements of the marketing strategy. This helps us understand the businesses we are serving but it does not address the issue of search engine position.
I rarely address the “I want to be first” statement directly because it is fundamentally flawed and not in line with the real business objectives. Business people are by nature competitive they want to win and they want to be first. Being first serves our egos but it’s not necessarily the best place for your business.
Position counts but you cannot get so focused on one attribute of the game that you lose focus on the big things. Advertising needs to feed your business in balance with the budget and your ability to serve new business. We have seen examples of too much new business where clients have had us throttle back to give operations a chance to catch their breath. In other cases we reduced the client’s position bids because being first made the sales unprofitable. If it costs $100 to generate $50 in gross profit you do not want to do that too many times.
Golden Rule of Positioning #1: Position your ad as high as necessary but no higher
We like to look at this from a business objective standpoint, so we often ask clients how much is a new customer worth to your business? This is often a thought-provoking question that creates a great dialog. If the client decides that a sales lead is worth $100 then the process becomes one of finding the maximum number of leads that you can generate with a cost at or below that number and within budget. There is a relationship between the cost of the lead and the quantity of leads you can generate. In most situations the more leads you generate the high the cost per lead since you are getting into less qualified traffic with lower response rates or you are paying more to be in a higher position.
Another limiting factor in this game is the budget, and yes, everyone has one.
There come times in Adwords Management when the daily budget is regularly stopping ad delivery because there is more traffic than money. In these cases the last place you want to be is first because your marketing goals just changed. The goal in this case becomes getting the cheapest clicks possible resulting in the most visitor per dollar.
Like many business decisions position is a ying and yang challenge with position, click through rate (CTR), cost per click (CPC), and budget. The general rules are:
- 1. The lower the position the higher the CPC
2. The lower the position the higher the CTR
3. The more visitors the more business
4. The higher the CPC the fewer the visitors
5. The budget ends the game
The problem is that these statements are not 100% correct although they are generally true. Did you see how I talked out of both sides of my mouth at the same time? Higher position does not always create a higher CTR and a more visitors do not always create more business. What you have to do is find the right balance for your business and then consistently execute that strategy. A healthy web site has a good balance between its direct, referral, paid, and organic with a steady growth.