Analyzing Click-Through Rate to Improve Your Pay-Per-Click Campaign

- September 11, 2009

There are many factors that determine the success of a Pay-Per-Click (PPC) campaign.  Every campaign has variables that can (and must) be watched closely to achieve success.  If you’ve ever run a report in Google AdWords, you will see metrics for Clicks, Impressions, Click-Through Rate, Conversions, Cost per Conversion, and many others.  The variable I will focus on is the click-through rate (CTR).

Quite simply, the click-through rate (CTR) is calculated by dividing the number of users who clicked on your ad by the number of times your ad was delivered (also known as impressions).  For example, if your PPC ad was served up on a search engine results page (SERP) 1,000 times and 150 people clicked through to your website, your CTR would be 15%.  While there isn’t a magic number to establish a good or bad CTR, there are ways to analyze and improve your PPC campaign by reviewing your CTR.

The first step is to review the CTR of all your campaigns and identify the low and high percentages relative to the rest of your campaign.  Once they are identified you can start making optimization changes to your campaign to achieve better efficiency.  For example, if you see a certain keyword has a low CTR in relation to other keywords in the same AdGroup, that could be an indicator your keyword is not matching well with the associated ad copy.  You may want to break out that keyword into a separate AdGroup and develop new ad copy for that keyword.  If you notice that certain ads have a low CTR across all keywords in an AdGroup, you should optimize the campaign by testing new ad copy against the current ads or rewriting ad copy with a different message.

For keywords with CTR’s that are relatively high, you will want to focus on how well those visitors interact with your website.  Are they viewing multiple pages and converting?  If not, you may want to tweak the ad copy to bring about a stronger call to action.  If your bottom line goal is for visitors to make a purchase, and you find that certain keywords have a strong CTR but low conversion rate, it would be wise to make changes to the ad copy to bring aboard a more qualified visitor.  An excellent way to “cut the fat” out of your PPC campaign is to identify keywords with a high volume of clicks and high CTR, but low conversions.  You may need to optimize the ad copy, change the match type, or remove the keyword from your campaign altogether.  Remember, the CTR is just one of many variables that provide you with insight into your campaign’s effectiveness and provides a road map to optimization.

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