A lot of time, energy, money, and resources go into trying to create the perfect online ad campaign to bring attention to your business’s services or products. For these campaigns to be the most effective, a business’s marketing team has to spend hours every week optimizing, tweaking, and researching to ensure that they are keeping up with the latest trends, or else, their Pay-Per-Click (PPC) dollars may be wasted. Over the years, marketers have been hearing that traffic numbers are essential to a successful campaign, but in this day and age of bots and hackers looking for weak spots, this is becoming less and less true.
In today’s article, the trusted PPC team at Link Right Media is going to go over the essential information your business needs to know concerning click-through rates vs. conversion rates to help your business find success.
Understanding Click-Through Rates (CTR): What Is CTR and Why Is It Important?
“Click-through rate” is a term that shows the percentage of impressions that have resulted in a click. For example, if your PPC campaign has 1 click impressions off of 100 impressions, that is a 1% CTR.
CTR shows how relevant searchers are finding your ad to be for their issue. Ads that have a high CTR score are shown to be highly relevant to the issue at hand, meaning that more individuals are clicking on them. A low CTR score shows that the ad is less relevant and is being passed up for something else.
The goal of a PPC campaign is to ensure that the right consumers are finding the ads so that the clicks have more meaning and lead to action, such as a purchase or getting into contact with your company.
When it comes to measuring the success of your ad campaign, CTR is one of the first places to check. If no one is clicking on your ad, then you can pretty much guarantee that the ad’s relevancy is low which means that the desired actions are not going to be taken from your customers.
What Is Considered a Good CTR?
Unfortunately, having a high click-through rate does not always mean that your ad campaign is as successful as you want it to be. Remember, the point of the ad campaign is to drive your potential consumers to action.
When it comes to good CTR, this depends on the following factors:
- Your industry
- The set of keywords you are bidding on
- Ad Copy quality and relevance
For example, if you provide IT solutions for businesses, a good keyword may be “IT solutions”. However, IT solutions can also refer to individuals with IT needs for their personal computers and not for a business. The term “IT solutions” is so broad that it will have a higher click-through rate than the term “Business IT Solutions” or “Managed It Services”, but having a more defined term will garner an audience that is less broad and more likely to lead to a conversion.
Understanding Conversion Rate
Conversion rate refers to the percentage of people who convert after clicking on one of your ads. Depending on the goals for your PPC campaign, a conversion may simply mean they made a purchase or they filled out a contact form. The higher the conversion rate, the more successful your PPC campaign is, resulting in stronger results/success for your business.
How Is Conversion Rate Calculated?
The simplest way to calculate your conversion rate is to take the number of conversions and divide it by the number of ad clicks, then multiply that by 100 to get the percentage. For example, if your ad had 100 conversions but 1000 clicks, then the calculations would look like this:
- 100/1000 x 100 = 10%
What Is Considered a Good Conversion Rate?
When it comes to PPC, the average conversion rate on search engines is 2.35%; however, for Google Ads, it is 3.75%. If your conversion rate is higher than the average, then your PPC campaign is doing pretty well!
Which Metric Should I Be Focusing On?
The answer is both: while click-through rates can be a bit skewed due to bots or keywords that are too broad, the reality of the situation is that the click-through rate is still an important factor that tells you how well a PPC campaign is doing.
You want the most relevant click-throughs to drive a high number of conversions once visitors have reached your site.
Connect With Your Customers
Link Right Media is dedicated to helping small businesses connect with their potential customers through the application of best practices in web marketing, whether that is PPC, SEO, or social media. With years of experience, our team has the skills and knowledge to help navigate you through the changing world of web marketing to ensure that your business always stays connected to your clientele. Contact our team today for more information on our services or to schedule an appointment with one of our specialists!