Why is CTR Important for your AdWords Account?

Click Through Rate (CTR) is a metric that measures the number of clicks received on your ads per the number of impressions generated.

Click Through Rate (CTR) is calculated as follows:

Click Through Rate (CTR) =        Total Number of Clicks
                                          Total Number of Impressions

A keyword's CTR is a strong indicator of its relevance to the user and the overall success of the keyword. A well targeted keyword that shows a similarly targeted ad is more likely to have a higher CTR than a general keyword with non specific ad. The more your keywords and ads relate to each other and to your business, the more likely a user is to click your ad after searching on your keyword phrase.

A low CTR may point to poor keyword performance, indicating a need for ad or keyword optimisation. Therefore, you can use CTR to weigh which ads and keywords are not performing as well for you and then optimise them. CTR is also used to determine your keyword's Quality Score. Higher CTR means higher Quality Score which will lead to lower costs and higher ad position.

There are various ways to improve your CTR:

1.    CTR can be increased by improving your ad copy

Ad Headline
The most important part of your Google AdWords ad is the headline. Many people would first read the headlines and pick all relevant ads before reading the description lines and display URL. So unless your headline captures the searchers’ attention, they will not click on your ad. The most common and easiest way to optimise your ad is to include your keywords in your ad headline. This helps to show searchers that your ad is relevant to their search. Undeniably this strategy is effective but there are various other ways to further improve your headline. You can learn more about improving your ad headline here.

Ad Description Lines
The buying customers know exactly what they want. So be very specific with your ad. If your ad is very general it will not tell potential customers what your business offers. A general ad does not usually stand out. The description lines should be very specific in convincing the searcher to click on your ad. Check out some tips to improve your ad description.

Dynamic Keyword Insertion (DKI)
Dynamic Keyword Insertion is a method used to insert keywords from your keyword list into your display ads. The displayed keyword is the one that triggers your ad when a relevant search is made. Dynamic Keyword Insertion, or DKI, is usually inserted into the ad headline but it can also be used in the ad’s first or second description line, depending on your ad copy. If you would like to know more about Dynamic Keyword Insertion we've provided some tips.

2.    Improving Ad Position or Ad Rank can increase CTR

With a better Ad Position, your ad will appear above other ads and will have a better probability of receiving clicks and therefore improving CTR.

Increase Max CPC
A simple way of improving Ad Position is by increasing Max CPC. A higher Max CPC will improve ad rank and potentially increase your ad position.

Advertiser      Max.CPC   Q. Score               Rank                        Position

Before
     A                $0.40           8               $0.40 x 8 = 3.2                      1   
     B                $0.65           4               $0.65 x 4 = 2.6                      2


After
   B                  $0.85           4               $0.85 x 4 = 3.4                      1
   A                  $0.40           8               $0.40 x 8 = 3.2                      2   

From the example above, advertiser B increased Max CPC from $0.65 to $0.85 and took first position.

3.    Improve CTR with a negative keyword list

A negative keyword is a keyword matching option that will not trigger your ads for any search queries containing that term. It therefore decreases the number of times your ad is triggered and therefore decreases the number of impressions generated and helps improve CTR. For example, if you are selling ‘shoes’, but you do not sell ‘kids shoes’, you can add ‘kids’ as a negative keyword. Therefore your ad will not be shown to a searcher looking for ‘kids shoes’. Using negative keywords to improve ad performance is key to getting results quickly.


If you follow these steps to optimize your campaigns, you will see a significant boost in CTR for your Google AdWords account and it should follow by an improvement in Quality Score and ad position. Improving your quality score can also decrease your Cost per Click (CPC). If you want to know more about CPC, refer to this blog post.

This article was posted by Manesh Ram. Manesh is a Google AdWords Certified Professional, Yahoo Search Marketing Ambassador and SEM Campaign Manager at Traffika. You can follow Manesh on Twitter @maneshram.