Understanding Click-Through-Rate (CTR) and How To Improve It
When you use pay-per-click ads to market your business, brand, or product, it’s important that you measure the performance of these ads consistently to ensure that they’re bringing in new customers and helping you increase sales. The best way to measure the performance of your PPC ads is by looking at the click-through rate of […]
Mar 01, 2021 | 10 min. read
When you use pay-per-click ads to market your business, brand, or product, it’s important that you measure the performance of these ads consistently to ensure that they’re bringing in new customers and helping you increase sales. The best way to measure the performance of your PPC ads is by looking at the click-through rate of the ads that you’ve placed online. CTR is a very simple metric that allows you to identify the number of people who have clicked on your ads and have been taken to your website. An effective PPC ad will have high click-through rates.
The formula for CTR is clicks/impressions = CTR. The total impressions of an ad refers to the amount of people who have viewed your ad. If a high percentage of people who view the ad end up clicking through to your website, this indicates that your ad is popular and effective at driving sales. If you’re trying to identify what the right score is for CTR, there’s no exact number that your ads should obtain. The average click-through rate with AdWords is right around 1.91 percent. However, this isn’t necessarily a great CTR. For search ads, a quality score would be around 4-5 percent. On the other hand, a good score for display ads would be just under one percent.
When you want to measure the success of your PPC ads, the best tool for looking at the click-through rate of an ad is Google Analytics. With this tool, you can determine the click-through rate of every ad that you’ve placed on the Google search engine. While it’s recommended that you take steps to improve the click-through rate of your PPC ads, it’s also important that you don’t allocate too much of your marketing budget to doing so. Click-through rates can vary significantly from ad to ad. Each advertising campaign that you create will also have different audiences and goals, which means that you shouldn’t always attempt to reach a specific CTR.
Two Different Types of CTR
The two different types of ads that CTR is used for include search ads and display ads. Search ads are advertisements that appear at the very top of search results. If these ads are attached to the right keywords, you could bring a significant amount of traffic to your website. Display ads appear on other websites in articles and are typically related to services or products that the user recently searched for. The CTR for display advertisements is almost always lower when compared to the CTR for search ads. While search ads blend in with other results, display ads are clearly identifiable as marketing, which many users automatically avoid. This article goes into detail about the steps you can take to enhance the click-through rate of your ads.
What Determines a ‘Good’ CTR?
To better understand the importance of click-through rate, you should know more about what determines a good CTR. The primary factors that indicate a good CTR include keywords, ad positioning, and the quality of the imagery that you use in your ads. While there are a variety of different benchmark studies that can be used to identify if your ad has a good click-through rate, these studies aren’t able to provide precise answers. In reality, all of the variables mentioned above mean that a good click-through rate can differ from ad to ad.
When you want to create search ads and display ads for your website, the main platform that these ads can be created with is Google AdWords. If you gain high click-through rates for your ads, you may be able to obtain better ad positions for lower costs on the Google AdWords platform. Good CTR rates will vary by industry. For search ads, the average CTR for the real estate industry is right around 7.58 percent. On the other hand, the average CTR for the education and employment industry is as low as 2.75 percent. Before you measure the performance of your PPC ads, you should first identify what the average CTR is for your industry. Because search ads gain higher click-through rates when compared to display ads, the best type of advertising for achieving a higher CTR a search ad.
How To Improve Your CTR
While you shouldn’t spend too much of your marketing budget on making improvements to the CTR of your paid ads, there are some cost-effective ways to improve and enhance your CTR. Benchmarks are great for helping you determine if your CTR is where it should be. You can view the baseline performance of your ads and compare it to the competition. Because of how different each PPC campaign is from one another, making comparisons can still be difficult, which means that you shouldn’t rely on benchmark tools. While there are plenty of benchmark tools that you can use to measure your CTR, likely the best would be WordStream, which is free to use.
1. Target Your Audience
The first step that’s needed to improve the click-through rate of your ads is to target your audience, which means that your ads need to be paired with the right search results. No matter how amazing your ad copy is or how appealing the imagery is, your ad won’t be clicked on if the people who are viewing the ad aren’t a part of your primary audience. Targeting has proven to be a pain point for many businesses. In 2017, over 60 percent of advertisers for small businesses didn’t focus on targeting the right audiences, which caused poor performance.
There are many tools you can use to identify who your core audience is. For instance, you can use targeting parameters on Facebook to learn more about your main audience. Keep in mind that your targeting efforts should be focused. If the audience is broad, you’ll likely send your advertisements to too many people. If the primary goal that your company has is to increase sales, targeting too many people will cause you to spend too much money for very little gains. Focus primarily on the people who are most likely to purchase your product or create an account on your website.
2. Be Specific
You should also be specific when talking with your audience if you want to improve the CTR of your ads. Many businesses make the mistake of creating generic ad copy that doesn’t match the specificity of the search phrase that the potential customer used. When a user enters a highly specific phrase into a search engine, your search ad should be written as an exact match for the keyword. Try to avoid putting numerous keywords into a single search ad.
Because of the importance of using the right keywords in your search ads, make sure that you improve the search engine optimization for your website. While you create the ad copy for your search ads, you should include aspects of your product or service that set your business apart and resonate with your core audience. These aspects could be anything from the main features of your product to free shipping.
If you want to spruce up your search ads, it’s highly recommended that you use sitelink extensions. The ads that you can create on Google AdWords are very basic and can only include 30 characters for the headline and 80 characters for the description. You can avoid the hassle of fitting good copy into such tight restrictions by adding sitelinks to your add, which are extra links that you can place below your description.
These links should be related to the primary link that the ad takes the visitor to. Sitelink extensions are great when you want to make sure that your ads are specific to the interests of your main audience. For desktop ads, consider using six sitelinks. On the other hand, mobile ads work best with four sitelinks.
4. Modify Your Display Ad
While search ads are typically more effective at bringing visitors to a website, you should still focus on improving the CTR of your display ads. The CTR for a standard display ad is typically very low and can be around 0.1-0.2 percent. If the CTR for your display ads is currently lower than the average, it’s important to modify your display ad. The primary thing that you should do is choose the best size for the ad. Google states that the most effective sizes for display ads are:
- 300×600 pixels for a half page
- 336×280 pixels for a large rectangle
- 300×250 pixels for a medium rectangle
- 320×100 pixels for a large mobile banner
- 780×90 pixels for a leader-board
Make sure that you also perform some testing with different ads to determine which ones are most effective at increasing click-through rates. If your ads aren’t performing well, it’s possible that the imagery should be changed altogether. You should also think about conducting extensive research on the competition to identify what works best, which will allow you to improve your own ads.
Conclusions to Click-Through Rates
CTR has always been a difficult metric to measure. Because of the large number of variables that can alter the click-through rates of an ad, gauging the success of a marketing campaign can’t be done solely by looking at click-through rates. However, these rates can help you determine if your ads are effective and if changes should be made to enhance your ad copy or improve the imagery. If your click-through rates begin to improve, it’s likely that you’re doing better at reaching your target audience, which can be highly valuable towards your future success.
Trial and error is a key factor of improving your click-through rates. You can’t be certain about the results of your improvements until you’ve tested them. The four methods for improving your click-through rates include targeting your audience, being specific, using site link extensions, and modifying your display ads. Once you make these improvements, you should notice an increase in your click-through rates. A better CTR should also help with your CRO efforts by increasing conversion rates.
Subscribe to our newsletter and get more awesome content like this article.