According to the study, you can expect your click-through
rate to decline rapidly after position 1. Click-through
rate, or CTR, is computed by dividing the number
of times a listing or ad was clicked by the number
of impressions, or times it was viewed.
A search engine will have a limited number of impressions
for any given keyword or phrase. Think of these
impressions as a Boston crème pie with each search position
occupying a slice of that pie. Unfortunately,
if you're last in line at the desert bar, the piece
of pie you get will be dramatically smaller the
further you are from that first slice.
For example, with Overture, if you receive 100 clicks
per day for a number 1 position on "strawberry cheesecake," then
according to the study, you could expect to receive
about 77 clicks in the number 2 position. A number
3 position drops to about 59 clicks. By the time
you reach position 10, you would receive only 7 or
8 clicks. The relative percentages vary between Overture
and Google AdWords, but the conclusion remains the
same: You can literally double your traffic by simply
improving your rankings by a few positions.
So when dealing with paid placement, should you
always go for that number 1 slot? Only if maximizing
your traffic is of paramount importance, as you'll
normally pay a premium for the first few positions.
