Effect of Ad slots on Revenue using Advance Segments

Update : Google Adwords now have released a nice feature detailing the performance of ad unit within adwords reporting it self.

See this blog post for more details

Recently, I read highly respectable Hal Varian’s research at inside adwords about their research on ad position and conversion rate. I was really intrigued by the findings but since their findings are statistical, it is reliable. I still have respectful disagreement to the concept which I’d share here.

The hypothesis is higher positions tend to get more clicks and therefore more conversions in total and higher relative value derived from the top position.

We tried studying the cause and effect relationship between the Ad Slots and revenue. The purpose was to establish a relationship that if we move up our advert on Google Adwords, can we gain extra revenue? If ye how much?

To answer this question we created two advance segments with respect to medium and Ad slot (Top and RHS) as shown below:

Advance segment for Adwords slots

If you are not familiar about Ad slots here is what I am talking about:

Top spots in google adwords

Note that, when you see data for Top slot your ad is shown in first three position and if it is RHS , it could be from 4 to 11 slot no.

So what does that mean now from site usage standpoint!!

Site usage report after applying advance segments in google analytics

Ok I know its not rocket science and probably now you even dont need me to analyze but just to finish the post, I will get it done ! Bear with me. If you are an Analytics Ninja, you are most likely to go off from here and immediately create these segments !

So what does the site usage report suggests to us :

  • Visitor engagement is more for Top slot compared to RHS slot as seen from the No. of pages/visit metric which is 9.02 for former and 7.72 for later one.
  • Bounce rate in Top slot case is less than 50 % of site’s bounce rate.
  • Average time on site is also higher in case of Top slot visits compared to RHS visits.

Essentially the Top slot provides quality traffic to web site. Now lets have a look at what is the revenue impact of your ad slot.

Ecommerce report with adwords position slot

It isn’t hard to find out that, top Slot provides almost double per visit value than the RHS slot.

Now you know that the Top spot per visit value (which is our friend’s favorite metric) which is about 100% more than when ads are shown at right hand side of the google ads. You can now go ahead to your adwords change the budget and position for your important keyword based on the data that you will see after creating such segment.

So in nutshell, I dont think the positioning of have has no relavance with your conversion/revenue. It certainly has. However, to establish better relationship (above is too simplistic) , we need to take into account quality score and ad copy etc.

But can you discount the numbers if you see them as you see in above reports ? Do you have opinion here ? do you think if there is better way to do this ? no ?

Thanks for reading !

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Ravi Pathak
Ravi is the co-founder of Tatvic and expert at managing different web analytics tools. Ravi actively works on conversion optimization projects to improve conversion rate and test newer hypothesis with e-commerce companies.
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3 Comments. Leave new

  • if i’m interested in finding a career at Tatvic and visit the offical Web site, is there any way of knowing about the current/upcoming openings or to drop my resume?
    thanks!

    Reply
  • Um very interesting concept. However where it falls down is it shows Search and Network as whole and Network is shown as RHS. We have high conversion rates for our network advertising so it’s all a bit blurry. Is there any way to segment search from network. Also there is the Keyword Positions report within Adwords which I’m assuming wasn’t there when you first wrote the article.

    Reply
  • Thank you for the brief, it is definetly a helpful metric.

    Reply

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