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What Is a Good Click-Through Rate (CTR) for PPC?

April 26, 2010
16
Marketing Metrics
Paid Search Marketing

If you are involved with pay-per-click advertising, one of the metrics you should be concerned with is click-through rate. Click-through rate is the percent of ad views that result in clicks, and it is one of the key factors in Google’s search engine results ranking formula. Ads with higher click-through rates get better quality scores and higher placements in Google search results.

This doesn’t mean, however, you should aim for the highest click-through rate possible. Why? Because each click costs you money. If your conversions aren’t keeping up with you click costs, then you will be losing money.

 
Click-through Rates

So, what’s a good click-through rate then?

Your ideal click-through rate takes time to determine. It’s not the same for everyone, and average CTR depends on such factors as your industry, keywords, and conversion rate.

Still, it’s helpful to have some general guidelines for starting your AdWords campaign.

Earlier this year, a Google employee said that beginner advertisers should shoot for a 2% click-through rate. This figure is not set in stone, he said, but a reasonable starting point. Then, as the advertisers get more involved with their campaigns they should focus more on their return on investment than their click-through rate, the employee said.

Other PPC experts recommend a 2% to 5% click-through rate for competitive industries and a 5%+ click-through rate for non-competitive industries. The click-through rate is higher for non-competitive industries because customers with fewer choices are more likely to click on a pertinent ad. For example, someone looking for a pink vintage pinball machine is more likely to click on a relevant ad than someone looking for a printer.

If you're curious about your own CTR, you can use the AdWords Performance Grader to measure your click-through rate and compare it to that of your competitors.

Grade your click-through rate today!

What should I do after setting a CTR starting point?

Say you follow Google’s advice and decide to target a 2% click-through rate for your house painting business. You determine your target keywords, bid on these keywords, and set up your ads and landing pages with these keywords.

What’s next?

  • First, after a few weeks look at your ads’ click-through rates. This information can be found within the dashboard of your AdWords account. See how close the rates are to your 2% goal.
  • If they are below your goal, consider the text of your ads. Is it enticing? Is it clear? Does it contain enough of your keywords? If you don’t make your product or service appealing or easy to understand, customers won’t click on your ads. Also, consider whether your keywords are the best ones for your offering. Maybe customers aren’t clicking on your ad because your offering isn’t quite what they want.
  •  If your click-through rates are above your goal, look at your ad spend and conversion income. It’s obviously easier to determine income resulting from sales conversions than income resulting from lead conversions. If your income is significantly higher than your ad spend, you are doing something right. Your higher-than-intended click-through rates are actually a good thing.
  • But if your ad spend is higher than your conversion income, your higher click-through rates are probably a bad thing. This likely means you are getting a lot of unqualified traffic, and it is costing you. Modify your ad text so it weeds out shoppers who won’t convert. For example, specify that your gold rings start at $200, and those with limited funds won’t click on your ad in the first place.
  • Monitor your click-through rates and conversions following any changes to your ads. If your income is greater than your click spend, consider shooting for a higher click-through rate. You can do this by improving your ad text, choosing better keywords, and incorporating negative keywords into your AdWords campaigns. These actions should increase your number of qualified ad impressions, click-through rates and conversions.
  • Over time, your goal will change from a 2% click-through rateto the click-through rate that provides you with the best return on investment. If you determine, for example, that you achieve a record 30% profit margin from a 7% click-through rate, try to maintain that 7% rate. The rarer your product or service, the more relevant and inexpensive your keywords, and the more gripping your ad text, the higher your ideal CTR will likely be. And the higher your click-through rate, the higher your Google ranking will be.

Here are a couple of additional things to consider when determining your ideal click-through rate:

  • Typically click-through rates for search ads are higher than click-through rates for ads on the content network. That’s because ads on the content network have fewer qualified impressions, and are often more about generating brand awareness than immediate conversions.
  • Ads tied to “softer” conversions, like downloads, newsletter sign-ups, and forum user name registrations, tend to generate higher click-through rates.

 

Comments

docwatson
Apr 26, 2010

Interesting - CTR @ 2% sounds like a good goal to aim for, thanks!

John Paul Aguiar
Apr 26, 2010

Long read,, but well worth it. Nice to specific explanation on good to great CTR. I was thi9nking 5 - 10% was good..lol I stopped a facebook campaign because my CTR was 2% and I thought it wasn't worth continuing.. I was actually doing pretty well :)

Alison
Apr 26, 2010

Very interesting, any reference for content campaigns or facebook ppc campaigns? Thanks!

Christie
Mar 16, 2011

That really helped me to understand my adword campaigns. I have some CTR at 1% and others at 11%. I now understand what I should aim for and that I need to be very careful about the higher CTR as they may not actually be giving me the required outcome and simply costing me a lot of my budget. Great article, thank you!

rozenraymond
Jul 04, 2011

Tnx for the simplistic explanation. My CTR is between 1%-1.39%...

Kent
Jul 19, 2011

This is a good article. I'll make sure to come back to read the read of your Adwords articles. I found your website looking up some information on CTR and finally found what I was looking for. There are so many websites that had no idea what there were talking about. Haha

Mancini
Sep 06, 2011

1% is seriosuly good. I've found averages to be more like 0.25% Of course it depends on your audience and project!

Louise M.
Feb 15, 2012

Personally I do PPC with Microsoft Advertising and my CTR is 11%! Very specific keywords with high commercial intent, excellent quality score and a 0.20€ bid. :)

Louise M.
Feb 15, 2012

EDIT: 1st position on the page of course.

Anonymous
May 15, 2012

I was searching through google to understand the difference between conversion rate and bounce rate. I landed up- on your site, but unable to understand the actual difference. So, can you please explain me, If my bounce rate is high and the conversion rate is low then how does it affect the performance of my site on search engines?? Also, where can I see the excat comparison of my google analytics account, the actual comparison between the two?

Please help!!

Zishan Ahmed
Nov 12, 2012

Very informative and fantastic article. Thanks for sharing.

Johir Raihan
Feb 05, 2013

Thanks for sharing such a good article. I have a question, what is the ideal ratio for CTR ?

OliverWuhrl
Jul 16, 2013

There isn't an ideal ratio for CTR. It depends on many factors: the keywords you are targeting, the kind of ppc campaign you've chosen. The best option here is to compare your CTR with the one in your niche. There is an option of checking your competitor's CTR in Adwords. Here's a good article on this topic:  http://www.semrush.com/blog/articles/click-through-rate-ctr-importance-for-seo-and-ppc-article/ smiley

Fabulloso
Nov 11, 2013

Hi,

Christine Laubenstein,

This is a very informative article. CTR is a important factor to be consider, if you are managing PPC campaign. 

I hope, you will publishing more articles on PPC and related terms.

Thank you for sharing with us.

 

 

antonio
Jan 20, 2015

Did you know the first ever banner ad had a 78% click-through rate?

Rahul Gupta
Feb 10, 2015

A CTR of 1.5% is good for a newbie or not?

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