By Don Sturgill
CONVERSION MAX IS BASED in Bend, Oregon – microbrew capital of the world. And if there was a bar just down the road from the Conversion Max offices (and there is) … and if one would go there after work for a pint (various employees may or may not have done that – some, frequently) … and IF there were pay-per-click folks ringing in the weekend at the bar (Bend is also PPC capital of the world), then chances are really good you would hear beer-induced braggadocio like this:
“Man, one of my ads is showing a 48% click-through rate today!”
Which would almost certainly be followed by:
“That ain’t nothing, dude, I’ve got an entire ad group performing better than that.”
IN WALKS WISDOM
And … should Conversion Max’s main man, Richard Farr, be within earshot of the clamor – guess what he would do:
He would laugh.
How do you calculate CTR?
The click-through rate for a pay-per-click (PPC) ad is determined by dividing the number of times an ad link was clicked by the number of times it was shown, then multiplying by 100. For example, if your ad gets clicked 10 times and enjoyed 100 impressions, your CTR is 10%.
All things considered, the better job you do at writing ads, the higher will be your CTR.
How to write a high performance PPC ad for maximum CTR
For instance, let’s say you own a pizza parlor, but business has been way too slow lately. You want to drum up some traffic, so you decide to give pay-per-click a whirl. After all, someone gave you a $100 coupon for experimentation.
NOTE: Should you receive “free” ad credits, never, ever, never treat that as free money – and don’t even think about squandering it like nickels in a slot machine. Rather, treat those credits like pure gold and learn all you can from them. Don’t be stupid.
Your cousin Eddy is a writer. He won a prize for his high school essay about Peruvian reindeer, so you give him a call. Eddy starts writing …
You like the ad. Click-throughs will take the visitor to a page where your address and phone number are prominent. Yet, you recall something from Copyblogger about one of the most powerful words in the world (FREE) … so you ask Eddy to try again.
Which do you think would draw a higher CTR? See, anyone can write a high-performing PPC ad. You just need the right words.
Of course there’s going to be that little matter of delivering on the “Free Pizza.”
High click-through rates (CTR) – what good are they?
First off, CTR varies from market to market, product to product, and ad to ad. Generally speaking, a 5% CTR is fantastic. Even Babe Ruth struck out more than he homered. It is possible to get an occasional gusher, like those guys in the bar, but that is definitely not the standard.
For PPC, “Easy does it” is a much better maxim than “Full speed ahead.”
There certainly can be benefits to an increase in CTR, though. Here are three primary reasons to celebrate when yours takes an up-tick:
- More potential customers get to see your offer. Even if you ARE giving away pizza, people have to find out about it before they can take advantage of it. Over time, with proper analytics in place, you can determine a conversion rate – how many people must see your offer (call to action or CTA) before someone takes advantage of it. Conversion Rate is one valuable number to know.
- CTR tells you which ads are working and which aren’t. That is also valuable information. By observing click-through rates, you can get to know potential customers better and make tighter assumptions about what they want and don’t want. Have you ever gone fishing and needed to try several different baits or lures before you figured out what the fish are “hitting”? Same thing with ads. The CTR tells you what’s working and what’s not.
- The higher your CTR, the higher your Quality Score. And the higher your Quality Score, the lower price you pay for each click. Be careful with this one, though. Some folks treat Quality Score like extreme couponing – they focus so much on getting more for less that they lose sight of what they’re shopping for in the first place.
The downside to a high CTR – here’s where opportunity meets ignorance
Let’s think about this one. If a higher CTR means more people get a chance to buy your stuff, then the higher the better … right?
You meet a stranger on the street. S/he reaches inside h/er Google jacket and holds out a dollar bill, saying “I’ll trade you one of these for a twenty.” Do you bite?
Only a fool would take that deal. Turn it around, Google buddy, and I’m in for an all-day trading session. Same thing with CTR. If those clicks are costing you more money than they are making you – the more clicks you get, the worse off you are.
Your cousin Eddy is a genius. His “Get Your Free Pizza Here” pay-per-click ad has made a whale of a difference in the traffic at your pizzeria. Yesterday, you were dead. Today, you can’t get the pies out of the oven fast enough. At closing time, though, you arrive at a ghastly conclusion: your return on investment (ROI) for the day is minus three grand.
Ouch. Eddy ain’t your favorite cousin anymore.
You send Eddy back to business writers’ school. He now has a diploma and a much better grip on the mechanics of marketing. Being a kindhearted soul (who is staring at empty tables in the pizza shop), you give him another chance. This time, the ad makes much more sense. Both of you jump and shout when you see your ad quickly appear as the top ad on a Google search for “Fastest Pizza Delivery Anywhere.”
But the shop stays empty and the $1000 you allotted to the effort disappears like a snake in the woods.
You see, Eddy placed all bets on his keywords and neglected something called “geo-targeting.” Your shop isn’t located “Anywhere.” It’s in Remote, Oregon … a long, long way from those hungry searchers in the city — who are definitely looking for a better, quicker way to get their daily requirement of pizza … but they don’t happen to live in your delivery zone.
THE BOTTOM LINE: A high CTR definitely does not mean success. It may even mean the opposite. The way to boost your CTR (without being thought an idiot) is to make your ad fit your landing page and both fit your offer.
THE DOUBLE BOTTOM LINE: If there is one number in an ad campaign you want to monitor closely, it is the Return On Investment (ROI). At the end of the day, if your received more than you gave (however you want to measure that), you’re making headway. If not, you’re a charity, not a business. ROI, though, does depend on other factors — CTR and Conversion Rate, especially.
FINALE: Here’s the truly amazing thing: Many times, business owners and managers want to succeed at PPC, but really don’t know what success would look like. By the time they’ve figured out that a high CTR does not necessarily spell S-U-C-C-E-S-S, they’ve exhausted the advertising bankroll and have declared PPC a waste of time and money.
BEFORE YOU BEGIN WITH PPC, take a little time to figure out what you want to achieve and how you will measure success. If you need a little help, get some. There’s never a need to go it alone.
Find out more about how to optimize your PPC ads and landing pages for better Conversion Rates. Call 888-659-2680 for a free consultation with the Conversion Max team.
Latest posts by Don Sturgill (see all)
- PPC Ad Extensions and Your Money: How are They Related? - December 4, 2013
- PPC Enhanced Campaigns: A Blessing or a Curse? - November 28, 2013
- The Zen of Geotargeting: Are You In or Out? - November 25, 2013