How do you know your pay-per-click campaign is paying off? And what should you be looking for when evaluating a PPC campaign? When I ask new PPC clients this question, many focus solely on a low cost-per-click or the number of valuable conversions such as purchases, and form completions. And at the end of the day they would be right to an extent. Nothing matters more than visitors taking valuable actions on your website at an efficient cost.
However these measures can’t be relied on to tell the whole picture. PPC account managers would be making a big mistake by ignoring other important factors such as the click-through-rate (CTR).
What is a Click-Through-Rate?
The click-through-rate is a measure of how frequently an ad is clicked compared to how often it is seen. The CTR is calculated by:
Average click-through-rates vary greatly by industry, targeted geography, and competition. According to Google, the average industry CTR is between 1-2%.
Why Do Click-Through-Rates Matter for PPC?
In Google Adwords click-through-rates matter for 4 main reasons; the CTR is an indicator of strength of messaging, accurate targeting, can assist in guessing offline conversions, and maintaining a high CTR results in cheaper clicks.
1. CTRs Can Indicate Strong and Weak Messaging
Click-through-rates are useful in understanding how strong your advertising message is. Since CTRs are calculated by the frequency an ad is clicked when seen, it’s clear that ads featuring more enticing messaging will be clicked more frequently. This can be an especially useful tool when trying to understand what messages actually matter to your audience (You may be surprised!).
2. High CTRs Signify Accurate Targeting
The stronger your message is, the more frequently it will be clicked when seen. However, what happens if the audience you’re targeting is too wide? No matter how strong your message is, if it is being seen by the wrong audience it will receive a low CTR.
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