Establishing Good Metrics: PPC Click-Through Rates

Good CTR for PPC

Establishing Good Metrics: PPC Click-Through Rates

Paid search marketing is a powerful lead generation, conversion, and brand awareness tool. Implementing PPC ads in your e-commerce marketing strategy is integral to its success. Tracking and analysing paid search tactics can help you tweak the campaign in real-time and avoid excessive spending.

One of the most important metrics to track is the click-through rate (CTR). It can help you see how well your ads are working and affecting your overall campaign.

Let's take a closer look at the PPC click-through rate and why it deserves special attention.

What is a Click-Through Rate?

A PPC click-through rate is a metric that reflects the percentage of people who view your ad, click it, and arrive at your website.

Formula: Clicks (total clicks on an ad)/ Impressions (total views of an ad) x 100 = Click-Through Rate

For example, if 1,000 people see your ad and 10 of them click on it, your CTR is 1%.

In short, CTR gives you a rough idea of how well your paid search advertising campaign is working. If the rate is good then your target audience is attracted by your ads well enough to click on them and proceed to the website.

What is a Good PPC Click-Through Rate?

The average click-through rate across the majority of industries is about 2%. While your company may aim for being above average, it's not always the right tactic. A good CTR depends on a variety of factors including:

  • Industry — the CTR can vary dramatically across industries. For example, it's about 3.5% in the dating industry and about 1.35% in the legal industry.

  • Keywords — you may see a two-digit CTR for branded keywords and a tiny CTR for highly competitive keywords.

  • Network — platforms and networks you use for paid search ads can influence your CTR due to their reach, competitiveness, and costs.

The below information can be useful in guiding you when determining a good CTR for your company.

  • Average CTR on Facebook across all industries is 1.11% (Smart Insights)

  • Average CTR on Google Search Network is 1.91% (HubSpot)

  • Average CTR on Google Display Network 0.35% (HubSpot)

It's important to understand that while striving to outdo the average CTR, you could be hurting your campaign. Focus on a good CTR for your industry, keywords, and networks instead.

Are High Click-Through Rates Good for My Marketing Campaign?

This is yet another "it depends" question. In case your PPC campaign is yielding excellent results by converting customers and boosting profitability, a high CTR is great. However, an inflated click-through rate can be deceiving.

A high click-through rate can be bad for your e-commerce business if:

  • You are bidding on the wrong keywords — customers click the ad only to find out that you don't offer what you are looking for.

  • You are bidding on expensive keywords — while this approach can be effective, it can eat up your marketing budget quickly, not leaving enough money for other tactics.

Overall, a high CTR is only effective if it brings you the desired results without hurting your marketing budget.

Key Factors That Affect the CTR

To increase your CTR, you need to understand which factors affect its growth. Here are a few things to consider:

  • Headline — the headline is often the only thing a consumer needs to make a decision about clicking your ad. A poor headline = low CTR.

  • Ad copy — if the consumer moves past the headline, your ad copy gets a shot at driving a click through. High-quality ad copy doesn't just increase the CTR. It improves your chances of converting the lead.

  • Ad position — the higher your ad is on the search engine results, the more chances it has of getting a click. Ad position depends on your ad rank.

  • Ad relevance — the more relevant your ad is to the consumer's query, the more likely they are to click.

  • Ad extensions — ad extensions make your ad stand out. The more information you can give the consumer without overwhelming them, the better chances you have of getting a click.

  • Device — the click-through rate can vary depending on the device. For example, mobile ads get more clicks since they occupy more screen space than desktop ads.

  • CTA (Call to Action) — the more appealing your CTA is, the more likely you are to get a click. Remember "click here" CTAs aren't effective anymore. To get the desired click, you must get creative like "get a 5% discount now."

While you can increase the CTR by focusing on one of the above factors, streamlining all of them is the key to maximizing the CTR for your company.

How to Increase Your Click-Through Rate

Once you figure out what a good CTR for your business is, you can start working toward increasing it. Here are a few ways to do it:

  • Capitalise on FOMO (Fear of Missing Out) by adding a countdown timer to your ad.

  • Make sure the keyword you are bidding on is in the URL of your ad.

  • Work on improving your CTAs (don't forget to offer freebies).

  • A/b test your ads regularly to see which variations get more clicks.

  • Improve your ad copy by making it more personalised for specific segments of your target audience.

  • Use negative keywords to keep the wrong audience from seeing your ads (it can help you avoid useless clicks too).

  • Raise your bids whenever the budget allows.

Unless you plan to raise your bids dramatically, your CTR won't increase overnight. Monitor your CTR regularly but don't get obsessed with it. While being an important metric, it's only one of the many.

Paying Special Attention to PPC Click-Through Rate

Knowing what your CTR is and how it fares against the competition is important for improving your PPC campaign. While each company has its own "good" CTR, improving it is on every marketing team's agenda.

Take the time to learn what affects your PPC click-through rate and how to contribute to its steady rise. If you need help doing this, contact our team at any convenient time.

Steve Crowe