Search engines, like Google, have placed a very high premium on good CTR (click-through rate). However, CTR is also important to advertisers as well. Whenever a user goes to a search engine, they have a query, and they are searching for an answer—here, they are expressive a want or a need.
What makes search interesting is that users are telling you what they need. They have already made the decision that they need a particular thing and now they want to find it. The first step as an advertiser towards fulfilling the user’s need is to create a relevant paid search. In this post, we shall discuss what CTR is, what’s a good CTR, and how it affects your Quality Score and ad rank, and when a low CTR is allowed.
What Is CTR?
Well, this has a very simple definition—CTR or click-through rate the total percentage of impressions that result from a click. For instance, if your PPC had gained 2,000 impressions and 2 clicks, that’s a 0.2 percent CTR.
CTR, which is a metric, informs you how relevant searchers consider your ad to be. Therefore, if you have a:
- Low CTR, users find your ad not to be relevant
- High CTR, users find your ad to be very relevant
At the end of the day, the goal of any PPC campaign is to direct qualified users to your website and complete the desired actions—like to make a purchase, download a manual, or fill out a contact form or a lead. Click-through rate is the first step in the process of improving the relevancy of your ad and also generating these desired actions.
So, what’s A Good CTR?
This is a question that many advertisers ask every now and then. But, the answer to this, as with many other areas in PPC depends on a number of factors. That means, the definition of CTR depends on:
- Your industry
- The individual campaigns in a particular PPC account
- The keywords that you are bidding on
It’s not uncommon to see a double-digit click-through rate on branded keywords whenever a person is searching for a certain brand name or the name of your trademarked or branded product. Moreover, it’s not uncommon to see CTRs of less than 1% on broad and non-branded keywords.
How Does CTR Impact Ad Rank?
One thing about CTR is that it’s not an indication of the relevance of your ads to searchers. However, it does contribute to your Ad Rank in search engines. Ad rank, on the other hand, determines the placement of your ad on SERP. This makes PPC not to be a pure auction. Here, the highest bidder doesn’t take the top position. The advertiser with the highest Ad Rank takes the top position—and CTR a huge determinant in this Ad Rank formula.
However, it is also important to understand that Ad Rank is more complex than that. Search engines, like Google, measure your actual CTR in contrary to an expected CTR. Therefore, when you run lots of ads with a low click-through rate, Google assumes that the new ads that you add to your Ad Words account will have a low CTR, meaning it may rank these ads lower on the page.
That’s the reason why it’s essential for advertisers to have a clear understanding of the CTR on their ads and to aim to improve the CTR as much as they can. It’s important to every advertiser to understand that a poor CTR leads to low ad positions, regardless of their bid amount.
How Does CTR Impact Quality Score?
Quality Score measures the relevance of an advertiser since it’s related to ad copy, keywords, as well as landing pages. The more relevant your landing pages and ads are to the user, the higher the possibility that you will get higher Quality Scores.
The search engine’s measurement of the anticipated CTR, landing page experience and ad relevance are the determinants of Quality Score. A good click-through rate will assist you to get higher Quality Scores.
When Is A Low Click-Through Rate Ok?
Because CTR is very essential, should you optimize your ads for CTR, and leave out all other metrics like conversion rate? Well, you should never do that!
The success in PPC isn’t about CTR or Ad Rank. Well, you can write an ad saying “Free Uber Ride!” which would get an amazing CTR. However, unless offering these rides is the determinant of the business score for you, this kind of ad cannot assist your business to be profitable.
Therefore, you should always concentrate on your business metrics first, then click-through rate. If your objective is to sell many products at the lowest possible price, you should make sure that you optimize your pay-per-click campaigns for cost per sale. If your objective is to generate leads below a certain cost per lead, then make sure that you optimize your PPC for cost-per-lead.
Unless the goal of your business is to drive a lot of PPC traffic, you should not make CTR your primary KPI. Actually, there are moments when a low CTR is just ok—and can be a good thing. Dealing with unclear keyword is one of those times.
There is one necessary evil when it comes to all PPC programs—ambiguity. Some can search for your service or product using broad keywords with different meanings to different people. Let’s take security as an example.
Now, let’s say that you manage a company that deals with physical security solutions that protect a business from break-ins. If the company wants to bid on the word security to attract users who want security services. Now, this sounds like an amazing strategy—but the problem with it is that security means lots of things.
Users might be searching for:
- Financial security
- Credit card security
- Security guards
- Home security
- Data security
Can you see how these terms are contrasting? Now, if you choose to bid on business security, it will be more relevant. Still, it’s a broad term, meaning you might not have a great CTR. But, what if you get lots of threads from the same keyword, at an amazing cost? Will you pause the term because of the low CTR? Not at all!
Performance should always be your guide. Low CTR is very ok—so long as your ads and keywords are performing well, depending on the objectives of your business
Bottom Line
Click-through rate is an essential metric for PPC marketers to monitor and understand. Optimizing your keywords and ads for CTR, as you optimize for business metrics will make your PPC campaigns successful.