In the rush to be successful in Google Adwords management, many companies often equate ad position with success. In other words, they fall for belief that having a higher ad position means that they will necessarily be more profitable. But that’s not necessarily so!

First, let’s explain what we mean by the phrase “ad position”. Ad position refers to the rank of your ad someone searches in Google. For instance, let’s say that someone searches on the phrase “best loans”. Google will do its best deliver the most relevant ads and the most relevant organic (or free) listings for that search query.

Paid ads will normally be at the very top and off to the right-hand side. Let’s say there are seven paid ads and all of them are listed down the right-hand side. If my company’s ad is at the very top, then my ad is in “ad postion #1.” If my ad were 5th from the top, then that would be “ad position #5.”

Now to most people and many inexperienced in Adwords campaign management , it would seem that the higher ad positions would be the most coveted…after all, the higher the ad, the more clicks, right? Absolutely. Chance are that (all things being equal) if your ad is high on the page, you will get more clicks. But those clicks don’t necessarily translate to more sales. In fact, many times those clicks can end up costing you money than you think. Here’s why…

One must consider the buying stage that a customer is when they are clicking ads. True, they may click your ad first if you are near the top of the page, but the typical potential buyer is more than likely at the “research stage” at that point where they click the ads closest to the top of the page.

Research has proven that many times the further down a page a searcher goes, the closer the searcher is to making a buying decision or the more desperate the potential customer is to find the correct solution to the problem.

Let’s explore a scenario and say for the sake of even numbers that the top ad position for the keyword “divorce attorneys” can be obtained for $10, but to be in position #6 on the page only costs you $4 per click. Now, let’s assume that the top position gets 30 clicks out of a hundred searches, but only 5 of those result in a lead because the searcher is not finished “researching”, as they are clicking on all the ads to get a feel for the advertiser.

So ad position #6 gets 15 clicks, but those clicks result in 5 leads. Who wins? Well, ad position #1 paid $300 (30 clicks X $10) for its clicks and got 5 leads. That is a cost of $60 per lead ($300 cost / 5 leads). Ad position #6 cost the advertiser $60 (15 clicks X $4) and since they obtained 5 leads, those leads only cost $12 per lead ($60 cost / 5 leads).

In this scenario, ad position #6 won, but hold on a minute! What if position #6 only got 4 leads. That changes the actual cost per lead to $15, but if the average conversion resulted in a sale of $1,000 in legal fees and the conversion rate was say 50%, then even though ad position #1 cost a lot more per lead, it is ultimately more profitable than position #6.

Sound confusing? It should because it IS confusing and normally requires expensive third party software to test properly. If you are not testing or your account is being managed by someone who hasn’t asked you the right questions, then your campaign may already be in real trouble.

The only real way to find out what is best for you is to test, test, and test again. Professional Adwords management always starts with good keyword research and ends with proper testing. Though, in reality, top Adwords managers never stop testing what works for their clients.