Years ago some noted PPC experts like Perry Marshall recommended bottom fishing AdWords for deals in some competitive markets, claiming that as searchers moved down the listings they were more pre-qualified to make a purchase.
Google’s ad quality score algorithms, bid prices, editorial standards, and the competitive landscape of paid search have changed to where it is much harder to find deals with nickel and dime clicks. Google favors smaller tight lists of keywords over broad mix and match ad groups. And, in an attempt to kill off many forms of ad arbitrage, they made a decision to recycle leading ads against the long tail vs letting longtail advertisers get those clicks for cheap.
27 minutes into this video Dan Thies claims that their sales per click dropped off as their ads moved down the page.
Today George Michie published a blog entry on Search Engine Land about why position bidding wastes money, claiming that the value of traffic doesn’t vary by position (though stating it does vary by time of day and day of week).
The next time someone tries to engage you in a discussion about “finding the right position” for a particular term, remind them that the value of the traffic is measurable; but the cost of a position is unknown, and unknowable, changing based on the whims of your competition. Bottom line: don’t let your competitors run your search program.
Mr. Michie linked to a PDF titled An Empirical Study of Search Engine Advertising Effectiveness – though that statistical study focused on one advertiser in the automotive group. None of these citations should give you a clear optimal bid position strategy, but all should give you encouragement to test your market and find out what works best for you.