If Your Average Position is Higher Than 3… You’re Probably Overbidding
The Average Position metric in Google AdWords is a helpful measurement of what position in the Sponsored Ads section your ad shows on average. It’s a helpful metric because if your average position is 8 you’re most likely not bidding enough to be competitive and have your ad show regularly. However, one of the most overlooked factors about Avg. Pos. is having your average position too high.
Let’s clarify now that the Avg. Pos. measurement is a mean average of your ad positions, not a mode average. When your Avg. Pos. is 4 for instance, your ad has probably spanned from position 1 to 8 throughout the period of time you are analyzing. This is important because there is no direct correlation between ad position and Return on Investment. In fact, the best position for ROI according to Google is position 4.
What you will see when you begin to regularly optimize your PPC campaigns (if you aren’t already) is that bringing your Avg. Pos. down to 4 from close to 1 will usually not lead to a drop off in ROI. On the contrary, by not over-spending for top of page placement you will see a lower Cost per Click across your campaigns and your impressions will most likely go up (assuming you aren’t at maximum impression exposure).
By tracking the ROI performance of your campaigns over time along with your Average Page Position, you can optimize your campaigns to get better performance out of the same budgets.