A client wanted to know, here's an answer.
What Google says about click through rate
Getting from the horses mouth is important, otherwise we're just relying on anecdotes and superstition. Then we add our advice for a cohesive actionable plan.
Before that, we want to point out that you can get a lot of free help from Google themselves. Its obvious why a lot of web agencies don't point this out to customers (they risk loosing consultancy fees) but there's plenty of other activities where you may really need more involved help with. See 'plan of action' at the end of this guide for just that.
Free AdWords account set up & optimise
Did you know? Google actually provides free adwords account set up over the phone, and will even walk you through improving performance of your account for existing customers. You're spending money with them, it's in their interest that you get a good return on investment so make use of it!
When you log into AdWords, click the cog on the right and you'll see a telephone number to discuss your account. It's free, and we highly recommend taking advantage of it.
Click through rate definition
The entire definition from Google is:
"CTR is the number of clicks that your ad receives divided by the number of times your ad is shown expressed as a percentage (clicks ÷ impressions = CTR)." - Google
Therefore, bare in mind that a high CTR is not a measure of your return of investment, but it can be used to calculate & project it when used in combination with other metrics such as conversion rate.
So on the face of it, Click Through Rate is just a percentage of people that saw your add and clicked it. To derive actionable insight from it you must look at in context against the goals of your advert (see Plan of action at the end of this guide).
OK, so what's a good Click through percentage?
A good Click though rate boils down to a well planed advert which, when clicked, achieves the goals of your advert within the confines of your own budget.
What are the goals of your ads? You must be able to answer this question and then know how you are measuring these goals. A high click though rate is meaningless unless you measure it against your goals. How so? Think of it like this:
Consider this- you have a high click through rate of 80%, but none of these visits actually result in sales, or email sign ups etc. Remember, you're still paying out for every click even though you're not converting visits into action. This is why it's important to not simply blindly look at click through rate. Measure against your goals.
Google does provide a definition of what a high CTR indicates, but in our opinion misses the point because it gives the impression that a high percentage is directly linked to return on investment success, which it is not. It is, only an indication as they rightly say.
"A high CTR is a good indication that users find your ads helpful and relevant." - Google
Google also goes on to point out that a better advert may result in better placement and cheaper cost per click. This isn't surprising is it really, what is important is knowing how to make a better advert. See plan of action below to make a start on this.
Plan of action
With this new found insight, work through this checklist to identify how your click though rate 'performance' can be improved.
The goal here is to improve conversion really, click through rate is just a positive side effect of a well thought through and executed advert.
What are the goals of each of your adverts?
Answer the question "What action do I want my visitors to take after clicking my ad?
See how to track these actions (below)
Does my advert 'promise' match what my website says?
If your advert says one thing, and your website another. It's a bad advert. See next point.
The goal is to match your advert with a web page that matches the promise and encourages your visitor to take the action you want them to take (your end goal). Do your ads and web pages d this?
Do the keywords associated with my add relate closely to what I am offering?
Are you tracking your goals using Google analytics or similar?
If not, you need to have an Analytics account linked to your Adwords account.
Then, configure goals within Analytics
Was this guide helpful?
More questions? We will expand upon this article, feel free to contact us and we will work our advice into this guide.
Want help planing your Adwords account structure? We've also written a step by step guide for Designing an effective AdWords campaign.
How do we know all this stuff, where can I learn it?
It's no great secret, search for the (free) Google Analytics academy. Or Google's newer Digital Garage series which (if you have time of course) walks though all the concepts behind this. We recommend starting out with the 'Digital Analytics Fundamentals' series.
They will demystify a lot of odd terms that get flung about (like click through rate). Of course, remember it's Google's job to sell ads to you so don't forget your organic strategy too. If your wanting a friendly face to speak to about these topics contact us and let's see where we can help.