Ego Bidding: Why Paying for #1 Position on Google Costs You More Than You Think


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In the process of managing search marketing campaigns for clients, we occasionally run into situations where client management is dictating that their company “own” certain key search terms on Google. Additionally, if that domination can’t quickly or easily be achieved through organic means (via Search Engine Optimization), then at minimum the mandate is normally to ensure that the company’s search ad appears at the top of the page.

In the business of Search Engine Marketing (SEM), this strategy is sometimes referred to as “ego bidding” – that is, securing the top position (or one of the top 3 positions) for a particular search term, regardless of cost or efficiency.

Unfortunately, the only guarantee that comes with targeting the number one position for your search ad is a big bill from Google at the end of the month. At the number one position, conversions (the ratio of clicks to leads) are generally lower and acquisition cost more expensive. Why? First, and most obviously, because you’ll need to outbid your competitors to achieve that top position, and secondly, because studies show that search users tend on click on the top ad instinctually, without regard to relevance. The result can be a large number of expensive, unqualified clicks that don’t convert into real prospects.

It’s rarely advisable to have a strategy of securing the top position for a particular search term unless 1) it’s part of a short-term strategy to maximize visibility (for example, as part of a product launch), or 2) if past data indicates it’s a profitable position – that is, where the higher bid cost has been offset by a higher conversion rate and thus a lower CPA. More often, at least in B2B markets, a better strategy is to aim for positions #3-5, where the bid cost is much lower and yet the ad still appears on the first page of results and “above the fold.”

Adapted from the Spear white paper: “Top 10 B2B Paid Search Mistakes: Why Your Google Campaign Isn’t Working And What To Do About It.”

Republished with author's permission from original post.

Howard Sewell
Howard has worked in marketing for 25+ years, and is president of Spear Marketing Group, a full-service B2B marketing agency. Howard is a frequent speaker and contributor to marketing publications on topics that include demand generation, digital marketing, ABM, and marketing technology.


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