Crunching the data available in AdWords can be daunting. There are just so many columns of numbers and it may be difficult to determine what the numbers represent and how to interpret the data in order to improve the results of your campaigns. A key data point to look at is “CTR” or click-through rate, which we’ll explore in this article. To illustrate what it means and how to improve it, we’ll share how we worked with a client who grew his CTR from 0.64% to 3.31% over a ten month period.
Understanding Click-Through Rate
What does CTR Mean?
Click-through rate is actually just a formula: clicks ÷ impressions. A click is literally just a “click” on an ad, while impressions means a person has searched for one of your keywords and viewed the ad. For example, if you had five clicks from ten impressions, your CTR would be 5 ÷ 10 = .5 or if it was a percentage, it would be a 50% CTR. If it was 500,000 clicks out of 1,000,000 impressions it would still be a 50% CTR, the only difference is that half a million clicks would be considered superbly phenomenal, and honestly unrealistic, especially at a small business level.
What is a good CTR?
CTR can be used to determine things like the engagement with your ads or as a benchmark to measure performance. You’ll probably read many different blogs and opinions about a healthy CTR, most of them telling you 2%, but all I’m going to say is there is no single answer. It really depends on many factors like budget, market, competition, etc. The higher the CTR means more clicks on your ads from people searching for keywords relevant to your offering.
Case Study: Improving CTR with AdWords Extensions
For this case study, we will leave the name of the advertiser anonymous, and just refer to them as “Company A”. So, Company A had basic campaigns set up that were running live.
When we took over the account, we noticed the campaigns were missing ad extensions; none of them were running. We did some analysis and began to utilize this feature. Keep in mind we left the existing ad copy, budget, CPC bids and keywords untouched. Look at the timeline below — January 1, 2015 – October 31, 2015 — and you’ll see the small changes that yielded major shifts in the CTR.
Want to explore what you can do with extensions? Check out my post on Why and How to Use Google AdWords Extensions.
Impact of AdWords Extensions on CTR
Timeline of AdWords Extensions Changes
- 7/17/15 – Sitelink and Call extensions added
- 8/6/15 – Callout Extensions added
- 9/4/15 – Structured Snippet Extensions added
- 10/26/15 – More Structured Snippet Extensions added
Above, you can actually see how in each month where the extensions were added, the CTR increased over the previous month. Keep in mind Company A was on a limited budget which had not increased since their launch with AdWords. Their click-through rate shot up with no additional spending.
More Clicks from Fewer Impressions?
Due to shifts in the economy, search traffic for this client’s keywords dropped significantly over the course of 2015. Although we continued to target the same keywords, the number of impressions fell to less than a third of what it was. Counter to what you’d expect, we got more clicks even as impressions dropped! The chart below shows the relationship between increasing clicks and declining impressions.
Same Ads + Better Position = More Clicks
How did that happen? When impressions are on a steady decline, normally you would expect clicks to decrease as well, but they did the opposite.
In this case, it was all about the extensions. Clicks increased as soon as the extensions were optimized, with the CTR rising as high as 3.31%. The extensions made the ads more engaging, so that more people chose to click on them. Even better, the higher CTR may have given our ads an advantage in the algorithm that Google uses to determine an ad’s position in search results. By making our ads more appealing to the customer, we were able to improve their position on the page – at no additional cost.
This case study shows that even if impressions are low, you can still get results when your extensions, keywords, ads, and landing pages are high in relevancy and quality. It comes down to targeting your market well, providing a strong appeal and meeting their need with your product or service. This was a very attractive advertising scenario for Company A.
CTR Isn’t Everything. Here’s a More Important Metric.
As important as CTR is, don’t obsess over it. You have to be careful because a high CTR could also hurt you if you have very low conversions. That means you’ll be spending more on clicks and they won’t be producing the desired results. At the end of the day, the goal is that your ads are converting so that your advertising efforts lead to success. So don’t be only focused on high CTR as the end-all solution; there are a lot of other important metrics to look at too.
Want to know more? Check out our other posts about AdWords.
Want to learn more?
If you want to improve your AdWords results, we’re happy to help. Contact us to get started. If you want to grow your own marketing expertise or get up to date, consider our online or in-person JB Media Institute – a comprehensive course in Internet marketing taught by leading professionals who do it every day.