Click Through Rate, or CTR, can be a double edged sword for marketers. Basically CTR defines the percentage of people who see a link and click on it. More specifically, Pay-Per-Click (PPC) platforms measure CTR as the number of people who see your ad links (impressions) vs. the number of people who click on them. For anyone who is buying traffic, a high CTR is not always a good thing, because not all traffic is worth buying. If you are paying anywhere from a few cents to a few dollars per click, a high number of clicks needs to result in enough sales or exposure to justify the expense.
You should also keep in mind that you should not expect a huge CTR. Many people who are new to PPC believe that they should be seeing a click through rate of over 50%, based on the idea that their products are the answer to the searcher’s question. Unfortunately, the search engine user’s attention span is divided among all the visible links on the page, and that person may choose not to click any links at all. Additionally, the user has a choice between sponsored ad results and natural listings. Considering that a minimum CTR for PPC search engines is usually around one half of one percent, you shouldn’t panic as long as you are seeing at least 2% of the traffic going to your keyword. If you see a lower CTR, then you may want to adjust you bid, refine your keywords, or see if you can make your ads more appealing and/or relevant. For example, if competitive ads show pricing or guarantees, you may be able to show a lower price or better messaging.
Your ad’s position is going to have a big impact on CTR, but that doesn’t always mean that the ad should be at the top of the page. In most cases, the highest bid holds the top spot for a keyword-based ad, and the company buying this spot may not mind losing money on a particular keyword if it generates exposure. If you’re like most PPC buyers, you probably want to hold a profitable spot among the ads, and the #4 spot may show up at the upper right hand side of the user’s screen, where it can be mistaken for the top sponsored spot. The dollar difference between a #1 and #4 spot can be significant depending on your industry, so even though you get less clicks you can still get enough to make good sales. After a few weeks, an ad with a good CTR can actually move above one with higher cost-per-click bids if the search engine believes that the ad will generate more money. For more competitive terms, lower spots can also bring in good traffic without creating a negative ROI.
CTR also changes based on the type of ads you’re buying. One of the contributing factors in the dot-com bust was the failure of banner ads, which people tended to ignore after a few weeks of online experience. Banner ads had been sold based on “impressions” but soured over time when buyers discovered that they got a tiny number of clicks for every 1,000 (or 100,000) views. The advent of PPC ads became more promising, and “content match” ads are one way of getting impressions and clicks through Google and Bing PPC platforms. If you are signed up for content match (which is usually a default setting when you create your campaign) then you may notice that content ads have a very low CTR but still can generate a lot of volume. You ad can show up in front of hundreds of thousands of viewers who may be reading articles that contain material similar to your keywords. Normally you want to set your content network bids to be a fraction of your search-match keyword bids in order to get the same (or better) ROI based on conversion rate. For content match, a CTR can be one quarter of one percent and still bring in some great traffic.
Finding an ideal CTR can be almost impossible given the dozens of factors involved in the search process. Different keywords get different click through rates, and search volume also varies widely by keyword type. Depending on the day of the week, demand for keywords and volume may also change. High volume keywords generally have a lower CTR than low volume (“long tail”) keywords, but a long tail campaign requires hundreds or thousands of keywords to match the traffic you would get from a few short-tail terms. For anyone who is new to PPC, the best advice is to adjust your ads so they appear in competitive positions that aren’t too expensive. To increase click volume, it either pays to go after more relevant keywords or increase an ad’s position until it hits the “sweet spot” where it is generating positive revenue. If you can go after enough high-volume phrases, even a 1% CTR can represent thousands of clicks every month, and a smart campaign can make you proportionally more profitable than some of the “big guns” who are going after clicks and traffic without considering the need to convert clicks into sales.
Tags: click through rate, ctr
