A look at why people care so much about click-through rates for pay-per-click advertising.
A commonly asked question in pay-per-click (PPC) advertising is,
"What is a good click-through rate (CTR)?" There is no easy answer and
it can vary greatly depending on channel, targeting, keywords, and more.
First, the basics of the CTR:
Defined: The number of clicks received divided by
the number of impressions generated. For example, an ad that is
displayed 1,000 times and receives 10 clicks has a click-through rate of
1 percent.
Channel Differentials: Search and display channel
results are very different. We tend to see higher CTRs in search because
the searcher is looking for specific information, and is therefore more
likely to click when they find it. With display ads, the viewer is
passive - doing something else when the ad is served to them.
Why do people care so much about CTRs? The CTR can be an indicator of
how relevant an ad is to the searcher or to the audience targeted. It
can demonstrate interest in a product message or show what "resonates"
with searchers. I also have a theory that there can be an ego factor
with CTRs. The bigger the better, right?
Several factors can impact CTR on an ad, which is why there is no
definitive answer to the question. A few of the factors to consider
include:
- Audiences and targeting
- B2B or B2C
- Brand or non-branded
- A keyword's place in the search funnel
- Ad copy's creative messaging - CTA
- Type of offer
- Display URL
- Images/design
- Industry competitiveness
There are some observed trends in the industry based on PPC managers' experience and the channel's own data.
Search: In a healthy account you will see CTRs vary
depending on the type of campaign. For example, branding campaigns
typically earn a much higher CTR than non-brand. Advertisers may see 1
percent to 7 percent for non-brand with brand ads being 3 percent and
up. Consider the differences in each campaign, but focus on optimizing
ads with a CTR less than 1 percent.
Display: Typically advertisers could see 0.05
percent and above, with retargeting campaigns' CTR as much as double the
percentage of site targeting campaigns. Try to optimize any ads with
CTRs lower than about 0.03 percent, if clicks are a consideration. Most
of the time, display ads are used for branding so impressions are a more
important metric.
Facebook: Facebook offers two different types of
CTR. One is ad CTR, which is the percentage of times the ad or sponsored
story is clicked on. The other CTR is the social CTR. This number
represents clicks on ads shown with the names of the viewer's friend.
Facebook reps have said that CTR is not important and have not shared an
average or goal CTR. This seems to be counterintuitive since part of
Facebook's algorithm is based on an ad's CTR. Many advertisers will see
0.020 percent to 0.040 percent on average, but I regularly see several
CTRs of 0.063 percent and up to 0.5 percent. Focus on optimizing or
pausing any ads with less than 0.02 percent.
LinkedIn: According to a LinkedIn rep, the average
CTR for ads on LinkedIn is about 0.025 percent. I see that percentage on
the low end and then up to 0.06 percent. Focus on optimizing or pausing
anything under 0.018 percent.
Determining a good CTR is also common-sense marketing. Sometimes to
increase awareness or achieve a goal, advertisers have to bid on less
relevant or complementary keywords or audience targets. This can result
in a lower than expected CTR. This happens. It's OK. The bottom line is
if campaigns are achieving their goals in conversions, traffic, or
branding, the CTR is only one piece of the data pie.
