Why is CTR (Click Through Ratio) so important?

When you decide to go online to advertise your business or product you may hear a lot of lingo that may sound like a different language. There are a lot of “techie” web terms people use to describe ads and how well they are performing. One of those terms is CTR, otherwise known as clickthrough ratio. No matter what platform you’re advertising understanding CTR is crucial to determine how well your ad is performing, especially if that platform is Google AdWords since it directly affects your ad.

How is CTR calculated?

Before talking about how CTR impacts ads in Google AdWords, it’s first vital to know how click through ratio is calculated. The click through ratio is the number of clicks your ad gets divided by the number of times your ad is shown (otherwise known as impressions). The higher the CTR, the more likely users are finding your ad to be helpful.

How does CTR affect my ad in Google AdWords?

Now that you know how the CTR is calculated, it’s important to know how that number can affect your ad in Google AdWords. This statistic is used to help determine quality score within Google Adwords. The higher quality score your ad has combined with your bid amount, the better the AdRank. Your AdRank determines where your ad is placed which could greatly affect how well it performs. When your ad is at the bottom of a list of 20 others the likelihood of someone clicking on it dwindles. People want results fast; that’s why they use the internet. They want to find the best ads first and not waste their time with ones that don’t serve their needs. You can see the results of your CTR in your bottom line. If your high ad is generating sales then you know you are on the right track.

What is considered a high CTR?

Simply saying the higher CTR the better is not enough for many companies. They want numbers so they can set goals. By industry standards, a good click through ratio is around 2%. If you are hitting that number you can rest assured that your ad is powerful and serving its purpose…usually (you can see when it actually might be a bad thing below). If your CTR is higher, it may even be better for you! If it’s lower, then you know you have some work to do. A successful CTR can also be measured by the conversion rates to see how many of those clicks actually resulted in business.

How can I increase my CTR?

If numbers show your ad is not performing well then it’s time to reevaluate your ad. Here are some things to consider:

Add symbols if appropriate. Adding symbols just for the sake of doing it will achieve nothing. But, adding symbols that are relevant to the ad can make it stand out against the competition. This can give you a higher chance that someone will click on your ad over another.

Use a call to action. Having a clear call to action like “call today” or “sign up here” will likely get people to click on your ad if they aren’t already.

Using ad extensions. When people see a review or a recommendation, they’re likely to click on the ad. That’s how using ad extensions can boost your CTR.

Reevaluate your audience. While you likely studied your intended audience before you placed the ad, you may want to refocus to see who you’re really trying to reach. If you thought your intended audience was one group but really should be another, this can affect your CTR dramatically. You have to know who you’re trying to target so that the ad resonates with them. If it doesn’t, they won’t click on it. This may be one of the reasons why you’re ending up with a low CTR.

Let the team of Portside Marketing help you understand the world of CTR.  As a Google Certified Company, Portside Marketing can help you create an ad that will get people to click and improve your quality score within Google AdWords. One of the ways we can do this is to explain how search engine optimization relates to your ads. We have some of the top search engine optimization experts in the country. Let them work for you to help increase your CTR.

Is a high CTR ever a bad thing?

Although we’ve been talking a lot about achieving a high click through ratio and how it can be beneficial in the Google AdWords world, there are times when a high CTR can actually hurt your business. Since people are putting in a keyword to generate ads, you want to make sure the keyword they are searching is pertaining to your business. If you’ve chosen keywords for your ad that are not the best, then your high click through ratio number may not be as effective as you think.

Sure people are clicking on your ad, but what are they doing after that? The answer is nothing. As they soon discover, your ad really had nothing to do with what they were looking for after all. You’re not only not  making money from their click, but it is actually costing you money since you pay for Google AdWords by each click. The concept works well when you are making a profit in return for someone clicking on that ad, but it’s counterproductive if you’re not. This is why CTR can be such a tricky thing.

Contact Portside Marketing at (972) 979-9316 to let us help you increase your CTR in a way that will be beneficial to your company.