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In the battle for search engine placement across all organic listings, that golden spot of number one is top priority, and for good reason. That may not hold true in the realm of pay per click advertising. What many people may not know, is that the number one spot, although it typically grabs the highest click through’s, may not always be the most cost effective. Here’s why.

If you are running an ad campaign with limited funds, chances are you will max out your daily budget regardless of where you sit in the top 3, or even top 5 for that matter. It really makes little sense to pay a dollar a click for top spot if you are able to pay 50 cents for number 3.

Lets say you have a 10-dollar a day budget, currently sit in number one spot, and max your budget every day. You’re paying a dollar a click and getting 10 clicks a day. Wouldn’t it make sense to drop your max cost per click to 50 cents, drop to position 3, and generate 20 clicks per day instead? In my opinion it’s a no brainer. If you can increase your traffic while decreasing your spending, that seems to me to be the way to go.

One thing to remember though, regardless of the PPC engine you are using, in most cases the top few positions are distributed across a variety of network sites. Make sure you know which positions will be distributed and stay within them.

Please keep in mind that this example is for illustrative purposes only and will not apply to all ad campaigns or keywords, and typically will work best for those on limited budgets, but this is definitely something to think about when selecting your max CPC.