Are you serious about running a profitable Google Ads campaign?
Well, guess what… There are metrics other than cost that you need to pay close attention to. In fact, your Click-Through Rate is just as important as your Cost per Click.
You might be thinking, “Who cares!? I have a limited budget. Shouldn’t I be focusing on the clicks that cost less?”
You’re not alone. This was something that crossed my mind as well when I was starting out with pay per click advertising.
But then I realized that I wasn’t seeing the forest for the trees!
What is Click-Through Rate?
Your CTR is the percentage of people who clicked on your ad after seeing it.
For example, if 100 people see your ad and 10 of them click on it, your CTR is 10%. A higher percentage obviously means more people are clicking through to your website.
The formula is pretty simple:
(Total Clicks on Ad) / (Total Impressions) x 100 = Click-Through Rate (Percent)
You: “I still don’t see why this matters. If my clicks cost less, I’ll get more clicks out of my budget. Who cares about the percentage?”
Forest for the trees, my friend. Look at the big picture.
It doesn’t friggin’ matter how cheap your clicks are if they aren’t turning into leads!
How CTR Affects Your Google Ads Campaigns
A low CTR usually means that your chances of getting a lead are slim.
Think about it. If the percentage of people who click on your ad is low, that means it’s not very relevant to what they are searching for.
And if your ad isn’t relevant…
Well, there’s no other way to say this…
If your ad isn’t relevant, it sucks!
That’s why Google looks at your CTR when assigning you a Quality Score.
And guess what… not only does your Quality Score affect how your ad ranks on the search page, it also affects your Cost per Click. That means a crappy Quality Score might be costing you more money.
You see, Google is a business like any other. To attract new users and then keep them, they need to offer the best quality service out there!
How do they do that? By helping users find valuable information that’s relevant to what they’re searching for!
Think about it…
If you search Google for “dance classes near me” and all that comes up is a link to buy Broadway tickets in NYC, you’re going to get frustrated.
You: “Dammit, all I want is to find a hip hop class for my kid in our neighbourhood, I’m not tryna see Hamilton!”
Would you click on that Broadway link? Not likely (unless you’re dying to see Hamilton, I hear it’s good).
And what if that nonsense kept happening?!
What if Google kept showing you “Chinese restaurants in Vancouver” when you’re looking for “Thai restaurants in Seattle”?
Would you think Google was a very good search engine? No. Would you keep using it? Nah, you’d Ask Jeeves instead.
So, Google’s way of keeping ads relevant is by assigning you a Quality Score, and your Click-Through Rate is a factor.
You: “Ok, Ok! But what does Quality Score have to do with how much I’m paying per click?”
Well, in Google Ads, you have to bid on the keywords related to your product or service. Each time a person searches for one of your keywords, you’re entered into an auction for ad space. You tell Google the highest amount you’re willing to bid and if you win the auction, congrats! Your ad gets served!
But it’s not a straightforward case of highest bidder getting the prize.
Google takes into consideration your Quality Score. If your ad is top quality, you’ll win the auction even if you’re bidding less than your competitor.
That’s right! If your competitor is bidding $10 on a keyword but their Quality Score is crappy, you can still win with a bid of $1 on that same keyword!
How CTR Affects Your Facebook Campaigns
Facebook is a business just like Google. They want to attract and keep as many users as possible by providing a positive experience.
You see, Mark Zuckerberg earns his billions by selling advertising space. But that business model wouldn’t be possible if everybody thought Facebook sucked! Instead, they’d all switch back to MySpace and poor Zucks would lose his number one asset: an audience.
So, how does Facebook provide a positive experience?
Well, they know you’d rather be stalking your ex or creeping your crush’s public pics. But, since they have to show you ads to make money, they might as well show you cool stuff you’ll find useful.
I mean, just the other day I bought the cutest polka-dot blouse from the most adorable Montreal boutique! If I hadn’t seen that Facebook ad, I’d never have found it!
But getting back to your campaign…
Facebook has its own quality assurance system called Relevance Score. And guess what… your CTR impacts your score!
Why does it matter?
Relevance Score determines what shows up in somebody’s News Feed (that’s right… not everything actually shows up in the Feed). And since there are a limited number of spots available, Facebook will only show people what they’ll actually like.
This means you’re competing for space in your potential customer’s News Feed! And not only are you competing against other advertisers, you’re competing against posts from their friends and family!
A crappy Relevance Score tells Facebook that people probably won’t like your ad. This means you’ll have to PAY MORE to convince Facebook to show it.
But the opposite is also true! If Facebook thinks your ad is relevant, you can beat your competition even if you’re bidding less.
How CTR Affects the Quality of Your Web Traffic and Your Conversion Rates
If your Click-Through Rate is crappy, then your ad likely isn’t very relevant. It’s either not very informative or the audience you’re targeting doesn’t want what you’re selling.
For this example, let’s go with the theory that your ad isn’t very informative. You’re bidding on the broad keyword “shirts” and your crappy ad text says “Quality Shirts for Sale! We’ve Got the Best Shirts in Town”
A potential buyer is probably thinking:
What the HELL does that mean? What kind of shirts? Could you be more nondescript?!
This user probably won’t click on your ad. She’ll likely be more trusting of the highly descriptive ad below yours. Other users are likely going to feel the same way.
Hence, low CTR.
But let’s say she decides to take a leap of faith! She decides to see what you’re offering after all, and she goes in for the click! She gets to your landing page and what does she find? Men’s cotton t-shirts in a variety of comic book character designs.
Do you think she’s going to keep browsing? Do you think she’s going to buy something? No, because she’s a fashion-savvy lady and she likes frilly polka-dot blouses from girly boutiques, dammit!
Patrick Stewart and Ian McKellen have the best bromance ever, no doubt about it, but she’s not tryna rock an X-Men tee to work.
So what happens next? She eaves your site without buying anything. You paid hard-earned money for that click and all you got in return was a high bounce rate.
And the cycle continues…
You spend money on clicks, people don’t buy, your Cost per Acquisition goes through the roof, you get mad and think advertising doesn’t work.
“OK fine, I get it, my CTR sucks! So how do I improve it?”
Just because this fashionista is into peplum and bell sleeves, that doesn’t mean your comic book t-shirts aren’t awesome! You just need to refine your strategy a little bit.
Try bidding on a more specific keyword that describes what you’re actually selling:
“100% cotton men’s t-shirts” is a bit more descriptive, or how about “comic book t-shirts” and be sure to repeat that in your ad copy.
And rather than telling people that you sell the best shirts, tell them what they can expect to see when they click on your ad:
“Comic Book T-Shirts, Merchandise, & Apparel — Shop online for officially licensed comic book apparel from DC and Marvel.”
This way, you’re targeting people who are actually looking for what you sell and they know upfront what they’re going to see when they reach your site.
The quality of your ad traffic will improve, your conversion rate will go up and you’ll start to see a return on your investment.
What is a Good Click-Through Rate?
Well, the average CTR for a Google Paid Search ad is around 2%. But… that’s just average. And why be average when you can be awesome? In my opinion, you should strive for AT LEAST 3% but if you’re achieving 5-7% then you deserve a round of applause!
For Facebook ads, I’d recommend aiming for 1% or more.