Today, I want to talk about click through rate (CTR) and how this affects your pay per click campaign management at Google.
Click through rate (CTR) is the number of times your ad was clicked on divided by the number of times the ad was shown (impression). Your ads and keywords have their click through rates unique to your own campaign, which is a common misconception.
So why is click through rate (CTR), so important to your Google AdWords marketing campaign? Well, according to Google, and I say this because I see a major flaw in their philosophy, which I will get to later in this blog, is a strong indicator of how relevant it is to a user and thus its overall success as a keyword in your account. A well targeted keyword that has a nicely targeted ad is going to perform better than a broad keyword with a broad ad. Pretty straightforward, and means you should group keywords about a certain product or service into an ad group with targeted ads, hence you have a nicely organized account, which should return high click through rates.
Now here is a problem that I have as an AdWords management company with the Google system when evaluating a low click through rate. According to Google, a low click through rate can point to poor keyword performance indicating a need to optimize the ad or keyword further. These low click through rates will affect your overall account quality score, so Google kind of forces you to not utilize these keywords. There are keywords out there that are that I believe have a huge search volume that are extremely relevant that Google will penalize you based on this system.
Let’s look at an example. A Chicago realtor calls us for some PPC help. A term like Chicago real estate should be a great keyword for her. This keyword has 60,500 searches per month. To keep a 3% click through rate (CTR), she would have to pay for 1815 clicks. At a 2% click through rate, you would pay for 1210 clicks, 1% click through rate, 605 clicks and finally at a .05% click through rate, which definitely would be considered a poor keyword to Google, you would have to pay for 302 clicks. Now to be in the top 3, you would have to pay around $4.80 based on Google’s estimates. So to keep a 0.05% click through rate, your budget would have to be at $1500 a month minimum, 1% click through rate, $3000, 2% click through rate, $6000, and finally at a 3% click through rate, $12000. This is just for one keyword!
I completely understand that this realtor should target specific areas in Chicago to keep the click through rate higher, but my point is this keyword is a great starting point for a customer that does not know the area. Now one thing that I did not point out is the $4.80 is based on the account having a nice quality score. As your quality score gets worse, you have to pay more per click, which makes it even harder to play in that space.
Windy City Strategies account managers have been in the Internet marketing industry for over 10 years and will improve your Google AdWords management with our industry leading Internet marketing consulting, search engine optimization and pay per click management.