In setting up Google advertising, it’s important to know about a contextual performance indicator such as CTR.
Search engines value clickthrough rate (CTR).
After all, in a pay-per-click model, the more someone clicks, the more the search engine earns.
But CTR marketing is important for advertisers.
When a user accesses a search engine, he has a question and he is looking for an answer. They express a need or desire.
What makes the search so awesome is that users tell you exactly what they are looking for! They have already decided that they need something, and are now trying to find it.
Creating a relevant paid search ad (PPC) is your first step as an advertiser to meet this need.
In this article, we’ll show you how CTR affects your ad’s rating and quality score, and when low CTR is acceptable.
CTR - what is it in advertising?
Simply put, clickthrough rate is the percentage of impressions that resulted in a click.
If your CPC ad had 1000 impressions and 1 click, then the clickthrough rate will be 0.1%.
As an indicator, CTR tells you how relevant search engines find your ad.
If you have:
• High clickthrough rate, that is, a high percentage of CTR - users find your ad very relevant.
• Low CTR - users find your ad less relevant.
The ultimate goal of any PPC campaign is to attract qualified users to your website and perform the desired action (for example, make a purchase, fill out an application or contact form, download the specification).
CTR is the first step in the process of increasing the relevance of your ad and generating the desired actions.
Let's start with the basics: the essence of PPC (contextual advertising)
What is a normal clickthrough rate?
So what is a good clickthrough rate?
The answer, as with many things in PPC, is “it depends.”
It depends on the:
• your niche
• Keyword Set
It’s not unusual to see a high CTR for brand keywords when someone searches for the name of your brand or trademark.
In addition, it’s not unusual for a clickthrough rate of less than 1 percent for broad non-branded keywords.
How CTR Affects Ad Rank
CTR is not just an indicator of how relevant your ads are to searchers. CTR also increases the ranking of your ad on search engines.
An ad rating determines the position of your ad on the search results page.
The top position goes not to the one who gave the highest price. It goes to the advertiser with the highest rated ad. And CTR is a huge factor in the ad ranking formula.
But ad rankings are even more difficult. Google compares your actual clickthrough rate with the expected.
Therefore, if you served a lot of low CTR ads, Google will assume that any new ads that you add to your Google Ads account will also have a low CTR and may rank them on the page below.
That's why it’s so important to understand CTR in your ads and try to improve it as much as possible.
A low clickthrough rate can lead to low ad positions, no matter how much you offer.
How CTR Affects Quality Score
Quality Score is a measure of the relevance of ads, keywords, ads, and landing pages.
The more relevant your ads and landing pages are to the user, the more likely you are to see higher quality metrics.
Quality Score is calculated based on Google’s estimated clickthrough rate, ad relevance, and landing page views.
A good clickthrough rate will help you get higher quality scores.
When low CTR is ok
Since CTR is so important, should you optimize all of your ads for CTR and forget about other metrics like conversion rate?
Success in PPC is not about ad rank and clickthrough rate.
We could write an ad labeled “Free iPhones!” That would get a great CTR. But such advertising will not help our business become profitable.
Always focus on business metrics in the first place, and CTR in the second.
If your business goal is not to attract a lot of PPC traffic, CTR should not be your primary KPI.
In fact, there are times when a low clickthrough rate is normal, and perhaps even good.
One of those cases when you have to deal with ambiguous keywords.
Ambiguity is a necessary evil in any PPC program. People can search for your product or service using broad keywords that mean different things to different people.
Here is an example: "security."
Let's say you run a company that sells physical security solutions for businesses to protect them from hacking. Your company wants to bet on the term “security” in order to attract users who are just starting to think about their security needs. Sounds like a great strategy.
But “security” can mean many different things. People can search for:
• credit card security
• financial security
• data security
• home security
• work of the security guard
And these are just five examples. See how different they are?
Suppose you decide to bet on "business security", as this is more relevant.
This is still a broad term - and your clickthrough rate may not be very good. But let's also say that you get a lot of potential customers for this keyword at a good price.
Do you need to pause this ad due to low CTR?
Of course not!
Always let performance be your guide.
A low clickthrough rate is great if your keywords and ads are effective depending on your business goals.
CTR is an important metric that PPC managers need to understand and track. Optimization for CTR, as well as optimization for business metrics, will lead to successful PPC campaigns.
Futureinapps company is setting up contextual advertising for any business! Contact!