What is Click-Through Rate and Why It Is Important in PPC?

5 Sep

The Click Through Rate (CTR) is an important metric to consider when measuring the success of your digital marketing campaigns. It measures the number of clicks that an advertiser’s link gets per number of impressions and can give some insight into how successful an ad campaign is.

This blog will teach you:

The exact formula used to calculate click-through rate (CTR).

Why your pay-per-click marketing account needs a high CTR.

How to achieve a good CTR for PPC campaigns.

What is PPC Click Through Rate (CTR)?

The PPC click-through rate (CTR) is a metric that measures how often people who see your ad go on to click it. The formula for CTR looks like this:

Formula for CTR

Let’s understand with an example: Suppose your ad gets 10 clicks per day per 500 impressions. So, the CTR of an ad will be 5%.

You can view your CTR in the dashboard of Google Ads. A high CTR indicates that a percentage of viewers click on your advertisement.

Importance of Click-Through Rate

As it directly impacts your Quality Score, click-through rate is an important measure for your Google ad account. Quality Score is a rating system that Google has in place to give your ad a number from 1-10, based on how relevant and useful your ad is to the person who sees it. Your expected cost per click on your ad will decrease as your Quality Score increases.

  • A high Click-Through Rate (CTR) leads to a high-quality Score (QS).
  • High-Quality Scores enable you to decrease your cost per click while maintaining or improving your ad position.

A high click-through rate also indicates that you are attracting as many customers as you can to your service provided you are advertising on relevant inquiries.

What is a Good Click-Through rate?

If we talk about good CTR, our honest answer is, “It depends”. Click-through rates will always differ based on the campaign as well as the keyword being used. Everything from your ad copy to how high your ad ranks on the results page contributes to this rate.

The typical click-through rate varies by industry, and among other things, your expected CTR is based on the position of your ad.

You can see benchmarks for the average click-through rate in Google Ads for 20 popular sectors below.

Average click-through rate in Google Ads for 20 popular sectors
Original Source: WordStream

Click-through rates (CTR) in Google Ads differ between the search and display networks, with an average CTR of 1.91% for search and 0.35% for display. The fact that average is simply an average that must be remembered. For the search network, a good Google Ads click-through rate is 4-5%+, and for the display network, it is 0.5-1%+.

When HIGH CTR isn’t Good For Your Ad

Not generating sales and leads from your ads? The problem might be your keywords. A high click-through rate for searches that don’t result in conversions can be costly for your business. Here’s why:

  • You’re paying for every click, regardless of whether it converts to a sale or lead.
  • Generating a lot of clicks can quickly increase your ad spend.
  • You might be paying too much for certain keywords, resulting in a loss even if those searches do convert.
  • Clicks on irrelevant terms are simply a waste of money that could be spent elsewhere to bring in actual business.

Therefore, achieving higher click-through rates is not always desirable; instead, you should aim for high CTRs for keywords that are:

  • Relevant – Have something to do with your offer, landing page, and ad text.
  • Affordable – Keywords that won’t prevent you from making a profit.

A good Click-Through-Rate (CTR) starts with choosing the right keywords and then getting as many people as possible to click on your ad.

How To Achieve Strong Click-Through Rates For Ads?

There are a few key things you need to focus on if you want to achieve strong click-through rates with your PPC campaigns:

How To Achieve Strong Click-Through Rates For Ads?

– Targeted keywords: Ensure that you are placing bids for the appropriate keywords that relate to your goods or services.

– Cost-efficient clicks: You want to make sure you’re getting the most bang for your buck – so focus on getting clicks that are cost-effective.

– Tools and methodology: There are lots of great tools out there that can help you closely integrate your keywords with your ad text and landing pages. Make use of them!

– The ability to quickly segment keyword groups: This will help you target your audience more effectively.

In a Nutshell

The most important thing to remember is to always test your PPC campaigns and track their ROI closely. A high CTR is necessary for a successful ad because it affects your Ad Rank and Quality Score. However, a high CTR on its own is not enough – you need a high CTR on relevant keywords that will bring in customers who are likely to convert.

Want to learn more? Contact our certified PPC experts at BMN Infotech!

About Keshav Devgan

Digital Marketing Strategist by Profession. Currently working in BMN Infotech - A Leading Software Company in Amritsar, India! He is passionate about SEO and experimenting with Social media and Content Marketing to generate quality leads.

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