Is click through rate the best metric for PPC? – PPC Metrics Part 1

With Google PPC it is possible to use hundreds or thousands of key words. So how do you decide which keywords to focus on?

After you have created your pay per click advertising campaigns using possibly hundreds or thousands of keywords it’s important to regularly review campaign performance to make sure your PPC investment is achieving the best results. But with so many internet metrics available on Google Adwords and Google analytics most people can’t see the wood for the trees! This is part 1 of a series of blogs looking at PPC metrics.

Click through rate (CTR) is an important early indicator of how well your PPC campaign has been set up. CTR is expressed as a percentage and is the number of clicks divided by the number of ad impressions *100. So a higher CTR means that more people prefer to click your ad for a specific keyword than other competing ads.

Why is CTR important?

For most keywords there are dozens, or hundreds of competitors competing for their ad to appear on page 1. However, Google only show 8 – 11 PPC ads on each search page, so making sure you are as high as possible on page 1 is a challenge.

Although the maximum bid price (the maximum you are prepared to pay for a click) is important, Google wants the best (the most relevant) ads to appear at the top (so that searchers see the best results), not necessarily those who bid the most. To help achieve this, Google calculates a Quality Score to determine the Ad rank or position.

CTR is an important component of the Quality Score which also includes ad text relevance, landing page performance, historical keyword performance and other factors.

So all other things being equal, a higher CTR means:

  • higher ad positions
  • you will pay less for each click
  • in fact, your ad would achieve a higher ad position than a competitor with a lower CTR bidding the same amount as you

How to improve your CTR?

The CTR will be higher for prominent ads with relevant ad copy.

Prominence depends on your maximum bid price and your Quality Score. To improve the ad position in the short term you may have to increase the maximum bid price but set a ceiling based on your maximum cost per sale or cost per new customer which will covered in a future blog. As your CTR improves you may be able to reduce your maximum bid price and get the same results.

Your ad is competing on a results page alongside up to 10 other PPC ads plus 10 or more organic search results. An ad with compelling copy that is relevant to the keyword will always perform better than a dull ad that is less relevant. So it’s important to test different ad variants to identify winning ads that help boost the CTR.

After an initial period to ensure results are statistically significant, it’s best to stop keywords with low CTRs of less than 1%.

CTR is an important early metric to focus on but in coming blogs I will feature other metrics that contribute towards pay per click success and improve overall internet marketing ROI.

2018-08-06T10:15:20+00:00Attract web leads, PPC|