How keyword length and ad position impact CTR and CPC on Google AdWords

Posted by Richard Stokes on June 23, 2008 to

June 22, 2008

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Of the many factors impacting campaign return, cost-per-click (CPC) and clickthrough rate (CTR) are among the most important. For this reason, it is vital that professional search marketers understand their relationship at more than a superficial level.

In a study conducted by the AdGooroo research team in early 2008, we attempted to measure the exact relationship between cost-per-click and clickthrough rate. More importantly, we measured how these critical campaign metrics were affected by the length of the searcher's keyword phrase as well as the average position in which the ad appeared on Google AdWords.

The end result of this study was a proprietary index (the “AdGooroo search index”) which illustrates how these relationships change across the entire range of ad positions on Google.

We demonstrate how to combine this index with standard website metrics, such as conversion rate and average order size, to reliably predict the optimal average position for both broad and niche keywords.

Our model can also be used to predict those rare situations in which advertisers can aggressively outbid their competitors for top positions while maintaining profitability.

Finally, the index can also be used to reliably predict how a keyword ad will perform when historical data is unavailable or insufficient, such as when setting up a new campaign or managing keywords which receive only a few clicks per month.

Tables and Charts:
1. Change in average cost-per-click by keyword length and average position
2. Average cost-per-click versus keyword length
3. Change in average clickthrough rate by keyword length and average position
4. Clickthrough rate versus keyword length
5. Predicted profit for broad keywords
6. Predicted profit for niche keywords

Download PDF (11 pages)