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How-to 16 min read October 8, 2019

What is CTR and how to increase it in paid search advertising

CTR is a key performance indicator in Internet marketing and informs how often users go to a website after viewing an advertisement. Optimizing your click-through rate will help you eliminate common click-through mistakes and improve advertising quality.

What is CTR

The main objective of online advertising is to attract the attention of the target audience to a website. Effective banners or text advertisements reveal the essence of the product from the best side and attract the attention of the audience. One way to measure the response to paid search and display advertising is to analyze the CTR.

Click-Through Rate (CTR) is a metric that estimates the number of visits to a resource after viewing advertisements. Since not all impressions of advertisements and banners lead to visiting a website, the click-through rate shows how much your advertisement is interesting to a user.
What is PPC clickability

How to calculate the CTR

CTR is calculated as the ratio of the number of clicks to the total number of impressions of an advertisement or banner. This value is measured in percent. For example, the number of advertising impressions is 1000. At the same time, 60 users visited a website. Therefore, the CTR is 6%.
CTR formula: the number of clicks / the number of impressions × 100%

What influences the CTR

CTR as an indicator of advertising performance

The sequence of targeted actions in advertising is a funnel "Impressions" -> "Clicks" -> "Conversions". Users see an advertisement or a banner. If the advertisement sparked interest, they follow the link to a website.

If a website has what a visitor was looking for and all the necessary conditions for performing a useful action, a conversion happens.
Contextual sales funnel
After visiting a website, user behavior depends mainly on the content of the resource, page structure, usability as well as on the willingness of a customer to make a conversion. The area of responsibility of the advertising specialist is one step higher in the funnel, that is, to ensure clicks and an acceptable CTR.

High CTR signifies that:

  • the target audience saw your advertisement;
  • users were interested in the advertisement text.

CTR and advertisement rating

The CTR value is also related to the advertisement position in the search results. The search engine is user-oriented and is interested in displaying quality and relevant advertisements in the search results.

The metric "expected CTR" is involved in the formation of the advertisement rating (quality score) and affects the results of the Google auction. This value is based on the effectiveness of keywords in the current campaign and also indicates the likelihood of a click and the marketing potential of an advertisement.

An increase in CTR after the launch of a new campaign will increase the ranking and position of advertisements in search results. This will bring new clicks and will further reduce the cost per click.

CTR and managing advertising budget

The CTR is less dependent on the advertising campaign budget, unlike other metrics. If campaign costs are low, the number of impressions may be less, but the ratio of clicks to them may be at a high level.

Based on the CTR statistics, you can evaluate how rationally the funds were spent, as well as more efficiently manage expenses in the future. When allocating a budget, you should consider the effectiveness of the texts of advertisements, keywords, and other targeting elements.

How high should the CTR be

Good click-through rate in paid search advertising

CTR in PPC is influenced by many factors. The main one is a list of keywords compiled for the advertisement. Keywords are divided into commercial, informational and navigational types. Informational keywords produce fewer conversions in nature and often have a CTR of 4 to 8%.

The most effective are phrases with callout extensions that have commercial potential: "buy", "order", "reviews", and so on. In this case, the CTR, as a rule, is at least 5% and can reach 10-20% depending on the competition factor and other targeting methods.

As for the average CTR of ads in Google AdWords, you can take the value of 8-10% which is an achievable indicator in most subjects.

If the CTR value is lower than expected, you should analyze the "Keywords" report, add negative keywords and possibly change the match type of keywords. The figure shows the respective tab in Google AdWords.
Queries and Keywords on the Google Adwords Search Network

Which CTR is considered good for banner advertising

CTR of display advertising is usually significantly lower than that in search results. This is due to the fact that the advertising banners that users see on websites are the advertiser's way to declare or remind about the brand (the first and "coldest" stages of the sales funnel).
Often, a potential customer sees banners on websites when he is not yet looking for a given product or service with the intention of buying. On the contrary, paid search advertising in search results is a quick response to the respective query.
The average click-through rate for banners on the Display Network (Google AdWords) can vary greatly. In one advertising campaign, CTR = 0.4% can be considered a successful response, in other ones, 0.08% is a good result.

Anyway, effective targeting, analysis of websites on which banners appeared, and further adjustments will make impressions as targeted as possible and increase the number of clicks.

As for targeted advertising in social media, there are no public statistics regarding CTR of banners on social networks. However, a large audience of users and a high number of impressions make the click-through value low enough. The statistics of many advertising campaigns on Facebook indicate the dependence of advertising effectiveness on the industry of a business.

The average value across all targeting areas on Facebook Ads is usually within 0.9%.

How to increase CTR

It's difficult to get the highest click-through rate of an advertisement since its launch. You can increase the CTR gradually based on accumulated statistics, metrics analysis and subsequent adjustments to advertising campaigns. Let's consider the main leverages on the effectiveness of paid search and display advertising.

Creating the right account structure

The basis for successful customization, analysis, and improvement of advertising is working with the account structure. First of all, you should separate the paid search advertising campaigns from the display campaigns (GDN). This will greatly simplify the process of targeting, analytics, and making changes in the future.
Google Adwords Campaign Types
When setting up text advertisements, you should break down the keywords into the maximum number of subject clusters and form separate groups. This will increase the likelihood of a relevant advertisement showing on a key query.

Keyword targeting

Based on statistics about advertising campaigns, you can often see a combination of high impression values and low CTR. If advertisements are actively displayed in the search, but users pass by, this usually indicates that this audience is not the target one. Targeting can help you get more relevant impressions.

Bulk keyword lists in advertising campaigns are a sure-fire way to increase user reach. However, a large number of impressions with a low CTR often indicate that there are irrelevant, so-called "junk" impressions. The analysis of the "Keywords" tab allows you to find out what queries bring advertisement impressions and identify bottlenecks.

Narrowing match types

One way to target ads to the right user is to work out keyword match types. For example, instead of a broad match type, you can choose a phrase match or modified broad match thereby excluding impressions for queries that are similar in meaning, but not always relevant in the topic.
Google Adwords Keyword Matching Types
Expanding the list of negative keywords

Analysis of search queries that generate advertisement impressions as well as the collection of keywords in the search results will identify negative keywords and exclude impressions for such keywords by adding them to the respective list.
Google Adwords Negative Keywords
Using transactional keywords

When launching an advertising campaign, newcomers often prefer high-frequency queries considering them the key to success, that is, if users often enter such phrases in the search bar then the ads should generate a response. However, a high-frequency query that a user enters does not always mean the desire to perform an action useful for business, namely, to get acquainted with goods on a website, buy or order.

For example, a user enters a query "sushi". Moreover, the intention may be to search for a definition of a given word, photograph, ingredients, and a recipe. If you have a Japanese cuisine delivery service and you use the keyword "sushi" in an advertising campaign, a large number of people will see such an advertisement, but many will ignore it.

To increase the CTR of advertisements, you should use keywords aimed at potential customers: "order sushi", "sushi delivery", "sushi restaurant", and others.

Audience targeting

One of the effective ways to target display advertising to the target audience is to indicate interests, age, and gender. For example, banner advertising a new shaping studio will be more clickable, if you indicate the audience interests "Sports and Fitness" and choose a female gender.

Placement targeting

When setting up ads on the Display Network, you can choose websites, pages, and applications that are promising in terms of clicks on banners. After the campaign start and the analysis of CTR banners on different resources, websites that do not bring the desired performance should be excluded.

It is also important to consider the location of the advertisement on the website page. The banner should be in a visible area of the screen and not interfere with viewing the content.

Increase the advertisement attractiveness

The main goal when creating a text advertisement is to effectively use the allocated number of characters and present yourself from the best side. To enter text, such segments of text advertisement as a title, description, display URL, extensions are used.

Advertisements must contain key phrases that match the needs of the target audience and be commercially attractive. This will provide an opportunity to identify the advantages among competitors and encourage the user to go to your website.

Headline

A keyword or phrase in the headline text signals to the user that the advertisement is relevant to their request. Therefore, the user is most likely to find on a website what he was looking for. Also, the key phrase with the maximum match with the user's query can be highlighted in bold on the search results page which attracts additional attention.

Description

An expanded description of the advertisement allows you to talk more about the product or service. Here you can add a call to action (CTA), mention a promotion or a unique selling proposition (USP), indicate a time limit ("today only"), indicate data using numbers or other competitive advantages.

Note: to include as much information as possible in the advertisement text, fill in additional headlines and descriptions.
Google Adwords Text Ads

Using advertisement extensions

Extensions make an advertisement more informative, noticeable and increase its clickability. Using extensions does not affect the cost per click and at the same time attracts additional user attention.

Contact information

Adding a phone number to an advertisement will allow the interested user to go directly to the call. This action is equivalent to going to a website and, accordingly, increases the CTR.
Contact details in Google Adwords ad
Sitelink extensions

Users often go to a website via sitelink extensions. Such links inform potential customers about other important pages of a website, that is, categories of similar products, pages with a catalog or price list, information about promotions.
Additional links in a Google Adwords ad
Callout extensions

Additional phrases about the benefits of your business will increase the attractiveness of the advertisement and save space in the description. Often use such callouts as "free delivery", "24/7 service", etc. Also, using these extensions you can talk about a wide range of companies.
Refinements in Google Adwords ad

Bright and informative banners

To get the desired result from display advertising, it is important to achieve a visual effect, that is, to impress, be remembered, arouse a desire to learn more about a brand or product.

Delegate the creation of banners to professionals who will create a unique and aesthetically attractive design, choose the right color combinations and write advertisement texts, draw graphics and other visual content.

Other factors affecting banner attractiveness:
  • resolution. You should be guided by the statistics of the most effective formats in your industry and keep in mind that large banners are more visible;
  • high-quality contrast and bright images;
  • using interactive and animated banners. Dynamic images gain more attention.

Testing advertisements and banners

To achieve a high CTR, you should experiment and try different advertising options, analyze and keep the most effective ones.

Creating several text advertisements in each group, launching various banners and testing their effectiveness will allow you to determine the most effective options and find out triggers which are points of interaction with the target audience that give the maximum result in the form of visits to a website.

Bids adjustment for increasing positions

Typically, text ads that appear above search results have higher click-through rates. If an advertisement is maximally refined in terms of quality and attractiveness for the user, you can increase the position of the advertisement in the search results by adjusting the maximum bids.

The easiest way to increase your search advertising position is by choosing the right bidding strategy.

For example, the "Target search page location" bidding strategy in Google AdWords which focuses on putting an advertisement above search results or in the first position will allow the system to adjust bids so that ads appear at the top of the page more often.

Conclusion

Click-through rate is an important performance indicator in the Google AdWords advertising network as well as in Internet marketing in general. High CTR is a major sign of an advertisement or banner quality.

The main ways to increase the click-through rate of advertising include:
  • efficient organization of the account structure;
  • addressing your advertisements to the target audience;
  • increasing the commercial attractiveness of ads and banners;
  • testing ads to find the most effective solutions;
  • bid adjustments.

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