This series of posts is intended for those new to search engine marketing who are looking for some guidance to help identify, monitor and adjust the key performance indicators (KPIs) that determine how successful a PPC campaign is.
What Is Click-Through Rate (CTR) and Why Is It Important?
Click-through rate is a measurement of the number of times an ad displayed on a search engine results page (SERP) is clicked on. The calculation is as follows:
Number of clicks / Number of impressions = CTR
Not surprisingly, CTR is one of the most commonly looked at indicators of success when it comes to online marketing. In most cases (when looking at CTR alone), the higher, the better as it indicates your ads are doing a good job at bringing in clicks.
CTR as a Key Performance Indicator (KPI)
What CTR means for you is going to depend on the type of campaign you’re running and what the goal of that campaign is.
If you’re running a marketing campaign that’s solely focused on increasing brand awareness and nothing more, your may determine that CTR is the main KPI you want to optimize for. Because you're only focused on spreading information and not actually selling anything on the site that the ad links to, a high CTR would be the goal as it would indicate that you’re successfully getting your message in front of as many eyeballs as possible.
If, on the other hand, you are selling something on your site, CTR is still important, but it’s not the only KPI you should be looking at. You may have a click-through rate that’s through the roof, but if all these clicks aren’t resulting in any sales, you aren’t getting a good return on your PPC advertising investment. It’s not enough to simply have people click on your ads in this case, you want them to take action on your website too… whether it be purchasing an item, signing up for a newsletter or whatever you determine to be an indicator of a conversion/acquisition.
Because good click-through rates are dependent upon other factors (position, cost-per-click), evaluating your adCenter reports should be done with a holistic view that takes the big picture into account. For example, if you notice that your CTR is low, you may also find that your ad position is low as well… if potential customers don’t see your ads, they can’t click on them. In this scenario, raising your bids to improve your position may also help improve your CTR (for more scenarios and how to remedy them, visit the links below).
Troubleshooting Tips
Now that you understand what click-through rates are and how they’re used as a key performance indicator (KPI), visit the below links for tips and tricks on how to improve your CTR:
Troubleshooting Low Click-Through Rate (CTR) in adCenter
Campaign Optimization Quick Reference Guide
Ad Copy Testing: Systematically Improving CTR
Five Tips for Creating Successful PPC Ad Copy
Optimizing Your Ads for Relevancy
If you have any questions, feel free to leave them in the comments field below, or else visit our forums.