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Role of Click Through Rate (CTR) in an effective PPC campaign
To generate sales and brand awareness companies launch paid marketing campaigns.PPC is one of the best-paid marketing methods if used properly. A company may use different paid marketing methods on different platforms. Therefore without any effective tracking in place, it would be difficult for marketers to make effective strategies which can improve ROI. The perseverance and consistency in tracking the results can pay a great dividend in the long term.
It is important to know and analyze the results of different campaigns so that specific causes of success and failures can be found. Suppose PPC campaigns running on different platforms like Bing, Google, Yahoo, and Amazon etc are producing different ROIs then it becomes imperative to know which platform is apt for your business and the scope for further improvement. The cross comparison and depth analysis can give insights which are yet unknown to you and can be more beneficial.
Every PPC campaign must have some goals. By conversion or goals tracking you can see how clicks, keywords, ads are leading to actual sales, phone calls, downloads, newsletter signups etc. The conversions are nothing but the valuable actions completed by the customers defined by you as per the need of the business. By tracking the goals you can manage your ad spend more effectively by taking informed decisions. It can help in tracking the behaviors of customers across different devices and browsers. In this article, we will look into the click-through rate, its importance, impact, and ways to increase CTR.
What are the key performance indicators (KPIs) for PPC campaigns?
For any business, the main goal is to increase revenue and reduce costs. The effective PPC campaign means the campaign which can enhance brand awareness and generate more sales. There are some key attributes which are directly linked to the campaign and need to be monitored.
Click Through Rate (CTR)-It is the ratio of the number of clicks and the number of times the ad is displayed by the search engine (impressions). The ad which is more close to the intent of search users or is relevant to the search context will be displayed and clicked more. Therefore ad optimization cannot be ignored for a successful PPC launch.
Why CTR is important for an effective PPC campaign?
By looking at Click through rate we can analyze the health and performance of the campaign. The focus should be to earn and maintain more quality score (1-10) which is awarded by marketing platforms. The quality score tells how relevant and a helpful ad is to the users. Based on the quality score the marketing platforms provide price incentive for ads. So good click-through rate increases the quality score hence reduces the cost of an ad by lowering CPC. The quality score is used to determine whether a particular ad is eligible to show at all or not. The score is calculated based on the expected CTR, user experience with the landing page and ad relevancy. Better score improves the ad rank and helps in better placement of the ads. The ad rank is calculated in real time once the user enters a keyword in search engine. The factors which are used to ad rank are an amount of bid, quality score and expected user experience of the ad. This ad rank decides the location or position in search results. It is natural that ad with high ad rank will get a better position and more exposure to searchers. Therefore the importance of quality score is immense because with high-quality score your ad can get a better position with low spending even in comparison to high bidders.
What is the average click-through rate for better results?
It depends on many factors and varies from one campaign to other campaign and even keyword to keyword. Every industry type has its own average CTR which can be used as a reference. Although it is assumed that any CTR above 2% is good. For Google search network the average CTR is around 1.91% while for display network it is around 0.35%.
Does a high click-through rate always lead to high ROI?
It is desirable to have high CTR but there may be some keywords which are getting high leads or clicks but not increasing the business or revenue. Even though there is high CTR but there may be a high bounce rate if relevant users are not attracted. This may impact the SEO of the site. There may be a situation like a mismatch between ad copy and landing page due to which conversion doesn’t take place. These unnecessary clicks are wasted and the greater cause of concerns for marketers especially for small business owners (they have a tight budget). What is the point if your business is getting links but with high CPC than revenue earned. Therefore in those ads, money is not invested wisely. So focus should be to find the keywords which are relevant and can give better ROI. You can include negative keywords in your ad copy so that you will not get clicks which don’t convert into profit. The data or meaningful insights collected from PPC campaigns can help in SEO improvement.
How do PPC campaigns have a positive SEO impact?
Although PPC campaigns are paid marketing tools to get instant traffics but directly or indirectly they increase the brand or website awareness. People do notice the brand name in PPC campaigns. This generates interest among people about various products and services. Over time they may be more curious to know more about the brand and its offerings and can directly start searching its products and services.
When PPC campaigns are running people may find some pages with great content for the help of their own audience. Hence PPC can help in getting or earning organic external links which will be helpful in boosting the site rank. So PPC indirectly increases the online visibility.
How to increase CTR to maximize the PPC results?
There are two key areas which need more attention to increasing the CTR. Customer targeting should be better according to the desired goal. The objective of designing an ad copy should be that when the user makes a search for a keyword related to your business then your ad should be shown. Research on possible queries of your customers should be done carefully. Based on the finding of the research the ad copy should contain the keywords which your prospects would enter into search engines. To avoid unnecessary clicking and spending include negative keywords in your ad copy. By incorporating negative keywords you can minimize ad cost, reduce bounce rate, and increase CTR and conversions. Use long tail keywords for better audience targeting. Although CTR will comparatively be less for long tail keywords in comparison to short keywords, it will be more conversion driven. They will be highly targeted and very close to the user’s query. Moreover, these long phrases will save ad cost because there will be less bidding competition. They pay a great dividend to small and medium businesses.
The second important way to increase CTR is by making your ad copy attractive and appealing to your prospects. The goal should be to increase the engagement of prospects with your ads. The ad copy should contain a clear Call to Action so that once a user sees an ad he should immediately know what to do next. The landing pages should be in line with ad copy and more specific. Try to make the best use of ad extensions, discounts offers etc.
Companies invest almost their 50% budget on marketing and brand promotion. The paid search marketing using PPC method can give instant traffic and sales. The CTR is the most important and essential part of PPC campaign hence needs continuous monitoring and optimization of CTR and analysis of past data. With effective and careful PPC campaigns the low budget companies can do better than high bidders in search results by getting a better quality score for their ads. Therefore PPC can be an effective and beneficial marketing tool for small or startups e-commerce companies.