Click-through rate
One of the most commonly used metrics for advertising on Google is “Click-through rate”, often abbreviated as CTR. It is exactly what it sounds like: an average of how many of those who have seen an ad then chose to click on it. CTR is usually expressed as a percentage; an ad with 100 impressions and 10 clicks therefore has a CTR of 10%.
Why is CTR so important?
First of all, the goal of advertising is to drive as much traffic as possible to the site. A higher CTR naturally results in more clicks, which in turn can mean more sales or more leads. Does this mean that you should always strive for the highest possible CTR and take optimization measures to achieve it? Not necessarily. Google Ads is built on a bidding model where we as advertisers pay per click. A higher CTR therefore does not only mean more clicks, it also means a higher cost. We can therefore agree that it is an extremely important metric, especially when search volumes are also high. However, a high CTR does not mean that everything is fine and dandy. To determine whether it is positive, we naturally need to validate the traffic using other metrics, such as conversions and average cost per conversion. In other words, we need to find out whether the traffic is profitable or not. If it is, we can assume that visitors are finding what they are looking for and we can confidently let the campaign continue. If it turns out that the visitors who click on the ad do not do what we want, for example complete a purchase, but instead choose to leave, then a high CTR suddenly becomes a leak in profitability and should be addressed as quickly as possible to avoid unnecessary costs and dissatisfied visitors.
How do we fix a high CTR with low profitability?
The first thing we want to determine is exactly where the traffic is coming from. An exact keyword is of course easier to evaluate; even if the search intent can sometimes be unclear, we know that the traffic comes from searches that are exactly the same as or similar to the keyword. For broader keywords, where we only know that the search contains a certain word or words, we need to look in the search terms report to find out what the actual searches look like. There, you as an advertiser can see exactly which search phrases the user searched for before clicking on your ad. You will often find several search phrases that are not at all relevant to the business, and these should be added as negative keywords to ensure that no more ads are shown for those searches. One tip is to also try to identify patterns among the irrelevant search phrases so that you can exclude several at once. For example, the common denominator might be the word “cheap”. If the site only offers high-quality and more expensive products or services, it may be a good idea to simply exclude all searches that contain the word “cheap”.
Avoid clickbait – create relevant ads
The second thing we should determine is why the user chose to click on the ad. Review the ads for the keyword and consider whether it is clear what the user can expect when they click on an ad. Could they be misleading in any way? Sometimes it can be small things, such as “large selection of pots”. Is it really a large selection for someone who has no idea what they want? “A carefully selected range” might have been a better headline. It is also common to see advertisers avoid mentioning terms that are not particularly competitive, such as longer delivery times. Many users are in a hurry and need the product quickly, in which case longer delivery times are likely a dealbreaker. In that situation, there is really no reason to pay for that click, and it might have been better to state the delivery time directly in the ad. To summarize this part: avoid “clickbait”, aim to be as clear and informative as possible in your ads, and do not be afraid to be honest.
Create good landing pages
The third part to review is the landing page. Assuming that the points mentioned above appear to be under control, meaning that the search phrases in the search terms report are relevant and the ads are clear, we should ask ourselves whether the destination, or landing page, lives up to expectations. This is an extremely important part that is often forgotten or where responsibility ends up with someone other than the person working with Google Ads. Even if there are resources working on these parts of the site, such as conversion optimization, insights from Google Ads and search behavior can be very valuable. This applies both to cost efficiency and user experience. The goal is, after all, to make the page as satisfying as possible for the visitor. If we know how the visitor searched to end up there and which ad texts attracted them, it is also easier to understand the expectations of the landing page. It could, for example, be a crucial piece of information that is missing and that makes the difference between a purchase and continuing to search elsewhere.
Quality Score – the common thread
All of this may feel quite logical, and it is. Google’s ranking algorithms work in much the same way, simply explained. The bid is only one part of what determines the position in which your ad is shown. The other part is Quality Score. Quality Score is a scoring system from 1 to 10 that is determined, among other things, by the relevance between the user’s search, the ad text, and the landing page. In other words, exactly what we have just gone through. The formula for Ad Rank, meaning the ad’s position, is bid x Quality Score. Let’s compare Ad Rank between an advertiser who has worked well with these elements and one who has spent less time on them.
Despite Advertiser B having a bid that is twice as high as Advertiser A’s, it is not enough to take a higher position. With that said, we can agree that it is extremely important to follow the traffic from the first to the last interaction and ensure that all parts of the journey live up to expectations. As mentioned above, not only for the sake of user experience but ultimately also for cost efficiency.
Key takeaways:
- A high CTR is often beneficial, but not necessarily. Do not forget to find out why it is high.
- A low CTR with a high conversion rate is preferable to a high CTR with a low conversion rate.
- Analyze the search terms report. Exclude irrelevant search phrases using negative keywords.
- Avoid clickbait. The goal is to attract relevant traffic; be honest in your ads.
- Work on your landing pages and take search behavior into account. Just as in the ads, answer the search query here as well.
- High Quality Score = cheaper clicks.
