Monday, May 18, 2009

Google Analytics - Keyword Positions

One of the biggest questions advertisers have when manage their pay per click account is how much they should bid for their keywords. Bidding too high may incur too much cost and advertisers might not be able to sustain a profitable ROI, whether bidding too low might not allow their ads to be positioned at a visible spot.

There is a function in Google Analytics that allows advertisers to see at which positions their keywords receive the most visits, transactions, revenue, conversion rate, and etc.

Simply login into Google Analytics, select a report which has the proper filters applied. Then click on Traffic Sources. Within the expended pull down menu, select Adwords then click on Keyword Positions.

Now just type in the keyword that you want to analyze into the “Find keywords” box to see the stats on that keyword. Click on the keyword once, then you can start seeing the position break down on the right.

This handy little tool might not be practical for huge companies that have tens and thousands of keywords, since manually analyzing each single one of them would just be overly time consuming. But for small businesses that have a few core keywords which make up the majority of their conversions, this is a great way to get some general ideas on how much they should bid to maximize their investments.

One thing to be careful though, is not to solely rely on the number of transactions to make decisions; instead you should also take the conversion rate, and number of visits into account.

For example: let’s assume for the time period you are analyzing, your keyword have spent 90% of the time at position one and only 10% of the time at position three, so most likely there would be more transactions happening at position one than at position three.

But at the same time, the keyword might only be getting a 0.3% conversion rate at position one whereas at position three, it might be getting a 3.2% conversion rate. Assuming there isn’t a big different on the number of visits between the two positions, it actually makes more sense to lower your bid and have the keyword on position three for most of the time.

As with any other analysis process, make sure you have a sufficient data collection before making any judgements.