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What Is Click-Through Rate & Why CTR Is Important

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What Is Click-Through Rate & Why CTR Is Important

Search engines place a high premium on a good click-through rate (CTR).

After all, in the pay-per-click model, the more someone clicks, the more money that search engine makes.

But CTR is important to advertisers, too. CTR tells you how well your message aligns with the people seeing it and whether you capture their interest.

When a user turns to a search engine, they have a question and are looking for an answer. They are expressing a need or want.

What makes Search so great is users are telling you exactly what they are looking for! They’ve already decided they need something and are now trying to find it.

Creating a relevant paid search ad is your first step as an advertiser in fulfilling that need. And CTR is one way of knowing whether you are fulfilling that need for searchers when they see your ads.

This guide will explain what click-through rate is, what a good CTR is, how it impacts your Ad Rank and Quality Score, and when a low CTR is considered OK.

What Is Click-Through Rate (CTR)?

Put simply, a click-through rate is the percentage of impressions that result in a click.

If your PPC ad had 1,000 impressions and one click, that’s a 0.1% CTR.

As a metric, CTR tells you how relevant searchers are finding your ad to be.

If you have a:

  • High CTR: Users are finding your ad to be highly relevant.
  • Low CTR: Users are finding your ad to be less relevant.

The ultimate goal of any PPC campaign is to get qualified users to come to your website and perform a desired action (e.g., make a purchase, fill out a lead or contact form, download a spec sheet).

CTR is the first step in the process of improving your ad’s relevancy and generating those desired actions.

What Is A Good CTR?

So, what’s a good click-through rate? Clients ask me this all the time.

The answer, as with many things in PPC, is “it depends.”

CTR is relative to:

  • Your industry.
  • The set of keywords you’re bidding on.
  • Individual campaigns within a PPC account.

It isn’t unusual to see double-digit CTR on branded keywords when someone is searching for your brand name or the name of your branded or trademarked product.

It also isn’t unusual to see CTRs of less than 1% on broad, non-branded keywords.

How CTR Impacts Ad Rank

CTR is not just an indication of how relevant your ads are to searchers. CTR also contributes to your ad rank in the search engines.

Ad Rank determines the position of your ad on the search results page.

That’s right – PPC isn’t a pure auction.

The top position doesn’t go to the highest bidder. It goes to the advertiser with the highest Ad Rank – and CTR is a huge factor in the Ad Rank formula.

But Ad Rank is even more complicated than that. Google measures your actual CTR against an expected CTR at the time of the auction.

So, if you’ve run a lot of ads with a low CTR, Google will assume that any new ads you add to your Google Ads account are also going to have a low CTR, and may rank them lower on the page.

This is why it’s so important to understand the CTR of your ads and to try to improve it as much as possible.

A poor CTR can lead to low ad positions, no matter how much you bid.

How CTR Impacts Quality Score

Quality Score is a measure of an advertiser’s relevance as it relates to keywords, ad copy, and landing pages.

The more relevant your ads and landing pages are to the user, the more likely it is that you’ll see higher Quality Scores.

Quality Score is calculated by the engines’ measurements of expected click-through rate, ad relevance, and landing page experience.

A good CTR will help you earn higher Quality Scores.

While Quality Score is not a factor in the ad auction, it is an indicator of expected performance and will impact your CPCs.

Use Quality Score to diagnose how your ads will show, and to improve your ad copy and landing pages.

When A Low CTR Is OK

Since CTR is so important, should you optimize all of your ads for CTR, and forget about other metrics, like conversion rate?

Absolutely not!

Success in PPC is not about Ad Rank and CTR.

I could write an ad that says “Free iPhones!” that would get a great CTR. But unless giving away iPhones is the measure of business success for me, such an ad won’t help my business become profitable.

Always focus on business metrics first, and CTR second.

If your goal is to sell as many products as possible at the lowest possible cost, you should optimize your PPC campaigns for cost per sale.

If your goal is to generate leads below a certain cost per lead, then optimize for cost per lead.

Unless your business goal is to drive lots of PPC traffic, CTR should not be your main KPI.

In fact, there are times when a low CTR is OK – and maybe even a good thing.

One of those times is when dealing with ambiguous keywords.

Ambiguity is a necessary evil in any PPC program. People may search for your product or service using broad keywords that mean different things to different people.

Here’s an example: “Security.”

Let’s say you run a company that sells physical security solutions to businesses to protect them from break-ins.

Your company wants to bid on the term “security” to capture users who are just beginning to think about their security needs. It sounds like a great strategy, and it can be.

But “security” can mean a lot of different things. People might be looking for:

  • Credit card security.
  • Financial security.
  • Data security.
  • Home security.
  • Security guard jobs.

And that’s only five examples I thought of in a few seconds. See how disparate those are?

Let’s say you decide to bid on “business security,” since it’s more relevant.

It’s still a broad term – and your CTR might not be great. But let’s also say you get a lot of leads from that keyword – at a good cost.

Should you pause that term because of a low CTR?

Of course not!

Always let performance be your guide.

Low CTR is perfectly fine, as long as your keywords and ads are performing well based on your business objectives.

This screenshot is a perfect example of a keyword with a relatively low CTR but a lower cost per lead than the high CTR keyword.

Screenshot from author, September 2024

When A High CTR Isn’t OK

High CTRs may not be ok, either.

If you have a high CTR but a low conversion rate, that indicates a problem.

Either your keywords are not a good match for your landing page, or your landing page isn’t converting well.

campaigns listed have a strong CTR and lots of clicks, but few conversionsScreenshot from author, September 2024

In this case, the campaigns listed have a strong CTR (the average for this account is just over 6%) and lots of clicks, but few to no conversions.

We found that our keywords were triggering a significant number of irrelevant search queries, bringing unqualified users to the site.

CTR should never be viewed in a vacuum. It’s one of many key metrics to review when assessing the success or failure of a PPC campaign.

Conclusion

CTR is an important metric for PPC managers to understand and monitor.

Optimizing for CTR, while also optimizing for business metrics, will lead to successful PPC campaigns.

More resources: 


Featured Image: eamesBot/Shutterstock

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Bing Webmaster Tools Update: More Data, Recommendations, Copilot

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Bing Webmaster Tools Update: More Data, Recommendations, Copilot

Microsoft upgrades Bing Webmaster Tools with extended data access, new recommendations system, and AI assistant in limited testing phase.

  • Bing Webmaster Tools extends historical data to 16 months.
  • “Insights” becomes “Recommendations” with enhanced features.
  • AI-powered “Copilot” assistant enters limited testing.

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Why Building a Brand is Key to SEO

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Why Building a Brand is Key to SEO

For better or worse, brands dominate Google search results. As more results are generated by AI and machines start to understand the offline and online world, big brands are only going to get more powerful. 

Watch on-demand as we tackle the challenge of competing with dominant brands in Google search results. We explained why big brands lead the rankings and how to measure your own brand’s impact against these competitors.

We even shared actionable strategies for improving your visibility by weaving your brand into your SEO.

You’ll learn:

  • Why brands dominate Google (and will continue to do so).
  • How to measure your brand’s impact on search, and what you should focus on.
  • Ways to weave your brand’s identity into your content.

With Dr. Pete Meyers, we explored why brand marketing is vital to search marketing, and how to incorporate your brand into your everyday content and SEO efforts.

If you’re looking to have your brand stand out in a sea of competition, you won’t want to miss this.

View the slides below, or check out the full presentation for all the details.

 

Join Us For Our Next Webinar!

Optimizing For Google’s New Landscape And The Future Of Search

Join us as we dive deep into the evolution reshaping Google’s search rankings in 2024 and beyond. We’ll show you actionable insights to help you navigate the disruption and emerge with a winning SEO strategy.

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How SEO Can Capture Demand You Create Elsewhere

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How SEO Can Capture Demand You Create Elsewhere

Generating demand is about making people want stuff they had no desire to buy before encountering your marketing. 

Sometimes, it’s a short-term play, like an ecommerce store creating buzz before launching a new product. Other times, like with B2B marketing, it’s a long-term play to engage out-of-market audiences.

In either situation, demand generation can quickly become an expensive marketing activity.

Here are some ways SEO can help you capture and retain the demand you’re generating so your marketing budget goes further.

How is demand typically generated? 

There’s no right or wrong way to generate demand. Any marketing activity that generates a desire to buy something (where there wasn’t such a desire before) can be considered demand generation.

Common examples include using:

  • Paid ads
  • Word of mouth
  • Social media
  • Video marketing
  • Email newsletters
  • Content marketing
  • Community marketing

For example, Pryshan is a small local brand in Australia that has created a new type of exfoliating stone from clay. They’ve been selling it offline since 2018, if not earlier.

It’s not a groundbreaking innovation, but it’s also not been done before.

To launch their product online, they started running a bunch of Facebook ads:

Because of their ads, this company is in the early stages of generating demand for its product. Sure, it’s not the type of marketing that will go viral, but it’s still a great example of demand gen.

Looking at search volume data, there are 40 searches per month for the keyword “clay stone exfoliator” in Australia and a handful of other related searches:

Ahrefs' keyword metrics for "clay stone exfoliator" and similar keywords indicating over 100 searches per month when aggregated.Ahrefs' keyword metrics for "clay stone exfoliator" and similar keywords indicating over 100 searches per month when aggregated.

However, these same keywords get hardly any searches in the US:

Search volumes for the clay stone exfoliator keywords in the US are all 0 to 10.Search volumes for the clay stone exfoliator keywords in the US are all 0 to 10.

This never happens.

Australia has a much smaller population than the US. For non-localized searches, Australian search volume is usually about 6-10% of US search volume for the same keywords.

Take a look at the most popular searches as an example:

Side by side copmarison of search volumes in the US compared to Australia for the keywords Youtube, Facebook, Wordle, Gmail and GoogleSide by side copmarison of search volumes in the US compared to Australia for the keywords Youtube, Facebook, Wordle, Gmail and Google

Pryshan’s advertising efforts on other platforms directly create the search demand for exfoliating clay stones.

It doesn’t matter where or how you educate people about the product you sell. What matters is shifting their perceptions from cognitive awareness to emotional desire.

Emotions trigger actions, and usually, the first action people take once they become aware of a cool new thing is to Google it.

If you’re not including SEO as part of your marketing efforts, here are three things you can do to:

  • minimize budget wastage
  • capture interest when people search
  • convert the audiences you’re already reaching

1. Make your product, service, or innovation searchable 

If you’re working hard to create demand for your product, make sure it’s easy for people to discover it when they search Google.

  • Give it a simple name that’s easy to remember
  • Label it according to how people naturally search
  • Avoid any terms that create ambiguities with an existing thing

For example, the concept of a clay exfoliating stone is easy for people to remember.

Even if they don’t remember what Pryshan calls their product, they’ll remember the videos and images they saw of the product being used to exfoliate people’s skin. They’ll remember it’s made from clay instead of a more common material like pumice.

It makes sense for Pryshan to call its product something similar to what people will be inclined to search for.

In this example, however, the context of exfoliation is important.

If Pryshan chooses to call its product “clay stones,” it will have a harder time disambiguating itself from gardening products in search results. It’s already the odd one out in SERPs for such keywords:

Pryshan's shop listing on Google for the keyword "clay stones" is among gardening products.Pryshan's shop listing on Google for the keyword "clay stones" is among gardening products.

When you go through your branding exercises to decide what to call your product or innovation, it helps to search your ideas on Google.

This way, you’ll easily see what phrases to avoid so that your product isn’t being grouped with unrelated things.

2. Own as much real estate on search results as you can 

Imagine being part of a company that invested a lot of money in re-branding itself. New logo, new slogan, new marketing materials… the lot.

On the back of their new business cards, the designers thought inviting people to search for the new slogan on Google would be clever.

The only problem was that this company didn’t rank for the slogan.

They weren’t showing up at all! (Yes, it’s a true story, no I can’t share the brand’s name).

This tactic isn’t new. Many businesses leverage the fact that people will Google things to convert offline audiences into online audiences through their printed, radio, and TV ads.

Billboard that includes a Google search for "cheesesteaks nearby".Billboard that includes a Google search for "cheesesteaks nearby".

Don’t do this if you don’t already own the search results page.

It’s not only a very expensive mistake to make, but it gives the conversions you’ve worked hard for directly to your competitors.

Instead, use SEO to become the only brand people see when they search for your brand, product, or something that you’ve created.

SERP results that can capture demandSERP results that can capture demand

Let’s use Pryshan as an example.

They’re the first brand to create exfoliating clay stones. Their audience has created a few new keywords to find Pryshan’s products on Google, with “clay stone exfoliator” being the most popular variation.

Yet even though it’s a product they’ve brought to market, competitors and retailers are already encroaching on their SERP real estate for this keyword:

Search results for the keyword "clay stone exfoliator" and where Pryshan shows up.Search results for the keyword "clay stone exfoliator" and where Pryshan shows up.

Sure, Pryshan holds four of the organic spots, but it’s not enough.

Many competitors are showing up in the paid product carousel before Pryshan’s website can be seen by searchers:

Sponsored product listings on Google.Sponsored product listings on Google.

They’re already paying for Facebook ads, why not consider some paid Google placements too?

Not to mention, stockists and competitors are ranking for three of the other organic positions.

Having stockists show up for your product may not seem so bad, but if you’re not careful, they may undercut your prices or completely edge you out of the SERPs.

This is also a common tactic used by affiliate marketers to earn commissions from brands that are not SEO-savvy.

In short, SEO can help you protect your brand presence on Google.

3. Use search data to measure demand gen success 

If you’re working hard to generate demand for a cool new thing that’s never been done before, it can be hard to know if it’s working.

Sure, you can measure sales. But a lot of the time, demand generation doesn’t turn into immediate sales.

B2B marketing is a prominent example. Educating and converting out-of-market audiences into in-market prospects can take a long time.

That’s where SEO data can help close the gap and give you data to get more buy-in from decision-makers.

Measure increases in branded searches

A natural byproduct of demand generation activities is that people search more for your brand (or they should if you’re doing it right).

Tracking if your branded keywords improve over time can help you gauge how your demand generation efforts are going.

In Ahrefs, you can use Rank Tracker to monitor how many people discover your website from your branded searches and whether these are trending up:

Example of Ahrefs' Rank Tracker dashboard.Example of Ahrefs' Rank Tracker dashboard.

If your brand is big enough and gets hundreds of searches a month, you can also check out this nifty graph that forecasts search potential in Keywords Explorer:

Example of Ahrefs' keyword metrics indicating monthly search volume and a graph of forecasted growth.Example of Ahrefs' keyword metrics indicating monthly search volume and a graph of forecasted growth.

Discover and track new keywords about your products, services or innovations

If, as part of your demand generation strategy, you’re encouraging people to search for new keywords relating to your product, service, or innovation, set up alerts to monitor your presence for those terms.

This method will also help you uncover the keywords your audience naturally uses anyway.

Start by going to Ahrefs Alerts and setting up a new keyword alert.

How to set up Ahrefs' Alert feature.How to set up Ahrefs' Alert feature.

Add your website.

Leave the volume setting untouched (you want to include low search volume keywords so you discover the new searches people make).

Set your preferred email frequency, and voila, you’re done.

Monitor visibility against competitors

If you’re worried other brands may steal your spotlight in Google’s search results, you can also use Ahrefs to monitor your share of the traffic compared to them.

I like to use the Share of Voice graph in Site Explorer to do this. It looks like this:

Using Ahrefs' Share of Voice graph to compare the traffic from multiple websites.Using Ahrefs' Share of Voice graph to compare the traffic from multiple websites.

This graph is a great bird’s eye view of how you stack up against competitors and if you’re at risk of losing visibility to any of them.

Final thoughts

As SEO professionals, it’s easy to forget how hard some businesses work to generate demand for their products or services.

Demand always comes first, and it’s our job to capture it.

It’s not a chicken or egg scenario. The savviest marketers use this to their advantage by creating their own SEO opportunities long before competitors figure out what they’re doing.

If you’ve seen other great examples of how SEO and demand generation work together, share them with me on LinkedIn anytime.

 

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