A few years ago, the low CTR strategy might have worked out very well for you — in fact, I’d argue that brands like eBay owe a great deal of their PPC success to low CTR strategies. However, things have changed. If you’re playing by the old rules, you’re being left behind.
Let’s look at the Low CTR Strategy and the surrounding dogma first.
The “Low CTR Strategy”
A low CTR strategy in paid search typically looks like one of two things:
- Going after broader keywords within your niche — keywords with informational, navigational or ambiguous search intent, which tend to suffer from stubbornly low click-through rates, in hopes of getting tons of “free exposure.”
- Employing a strategy to reduce clicks on your ads, either by going after lower ad positions in hopes of finding higher conversion rates, or by sabotaging your ad copy to discourage unqualified buyers to click on your ads.
Google Expects Way More from Your Ads Now
The first big change I’ve noticed is that Google expects far better performance from your ads than they did a few years ago. They’ve really raised the bar in terms of the quality they expect from your ads.
We found that the average CTRs for any given ad position are much higher than you expect, in our analysis of a few thousand advertiser accounts. Each time we run this analysis, we see it trending higher.
Truth: Quality Score Is Based On Beating Expected CTR
We’ve done some research into the Quality Score equation, and the key finding was that the Quality Score algorithm is essentially just a matter of beating the expected CTR.
A low Quality Score ad is simply an ad or keyword whose CTR falls below Google’s expected, average CTR for a given ad position.
Why does click-through rate matter for PPC campaigns?
A high CTR is vital to the health of any advertising campaign, especially campaigns ran on Google, which is where we start this discussion.
Google uses a variety of metrics to evaluate your site content and relevancy to Google users.
One way it can tell whether your site is useful and relevant for certain keywords is through CTR.
A high CTR indicates to Google that you are helpful and attractive to people searching for that particular keyword or keyword phrase. In fact, Google tells us that “calculations of expected click-through rate” are used to calculate Ad Rank during auction time.
Intuitively, Google Ads and other search based platforms offer perks to more relevant ads. This is because search engines serve as platforms connecting users with advertisers.
By displaying relevant ads, they keep the user base happy while also satisfying advertisers with a more receptive audience. Therefore, to incentivize relevancy and quality, they offer higher Quality Scores to ads with high Ads CTR.
Google Has Changed How The Ad Auction Works
Quality Score matters more and more every day. Over the last three years, Google has quietly changed how the ad auction works.
They haven’t announced this, but we see it in our internal research. Basically, the average quality score today is around 5/10, whereas 4 years ago, it was 7/10.
Quality Score Impacts CPC
As average Quality Scores drop, the value of having an above average QS — in terms of the discount on cost per click — is 200% more than it used to be. The following table shows the huge discounts and penalties that are applied to your CPC, based on your average quality scores.
Truth: Low Quality Score Penalty on CPC is Brutal
Part of the logic behind the Low CTR Strategy is that, by lowering your CTR, you’ll lower your costs. You don’t want high click-through rates because that means you’ll have to pay for more clicks.
The reality is that by pursuing lower CTRs, yes, you’ll pay for fewer clicks — but the cost of those clicks will be up to 400% greater due to the Quality Score tax on low CTR ads.
You’re actually much better off being very picky in your keyword selection and targeting options and trying to get as high a CTR as possible.
Your Low Quality Score Ads With Below Avg. CTRs Don’t Get Shown That Much!
Another rather huge problem with the Low CTR Strategy is that Google has been quietly raising the bar for the quality of ads they want to show in search results. Here’s some new research that we’ve done that shows the exact relationship between quality score and impression share:
Think of impression share as market share for your keywords. Essentially, impression share is how often Google actually shows your ads when people search on the keywords you’re interested in.
(Note: just because you’re interested in a keyword doesn’t mean Google will bother showing it. In fact, they won’t bother showing it at all if your ads are crap. The key takeaway here is that for every 1-point increase or decrease in Quality Score, you can expect to gain or lose an average of 9% impression share.)
Why Cost-Per-Click (Click-Through Rate & Quality Score) Matters
Why should anyone care about cost per click? After all, if you can sell products or services profitably at $100 cost per click, who the heck cares what the cost per click is? That’s a totally fair point.
The reason you should care is because there’s a strong relationship between Cost Per Click (CPC) and Cost Per Conversion (CPA).
Conversion Rate Vs. Average Search Position
We looked at conversion rates of ads in the first position and second position and third position (etc.) across thousands of accounts and found that on average, there was no relationship between conversion rate and average search position.
There’s nothing magical from a conversion rate perspective about position 3 — or any other position, for that matter.
Important Note: Click prices and click volume (and thus, Cost-Per-Action) will vary from ad position.
- By bidding up your keywords, you’re essentially buying a higher quantity of clicks in exchange for a higher CPC — as a result, you’ll get more conversions at a higher cost per conversion.
- By bidding down your keywords, you’ll get fewer clicks at a lower CPC, resulting in fewer conversions at a lower cost per conversion.
- The conversion rates of the clicks you acquire for a given keyword will have, on average, the same conversion rate, regardless of ad position.
We ran the numbers on millions of dollars of ad spend and found that the higher your CPC, the higher your average CPA. To put it another way, if you’re running profitable PPC campaigns with high CPCs, it would be even more profitable if you could lower your CPCs by raising click-through rates and Quality Scores.
Truth: Low CTR/Quality Score Keywords Are Killing Your Account
If you’re still not convinced of the futility of a Low CTR Strategy, check this out.
Perhaps the most compelling reason to drop the low CTR/Quality Score keywords and ads is that they’re killing the rest of your account.
How Can You Strengthen Your PPC Click-Through-Rate?
There are many steps you can take to improve your PPC CTR.
We’ll focus on keyword management, ad extensions, copywriting.
Keyword Management
Relevancy is something we’ve mentioned many times in this article. A high CTR means you have relevant content that is engaging the right audience through targeted marketing. Becoming relevant means you must bid for the right keywords. A pizza place, for example, wouldn’t want to bid for the keyword “steakhouse.”
We also mentioned earlier that high CTR can be damaging if you are attracting the wrong demographic (signified by high bounce rates and low conversion rates). This means it is important to focus on specific and accurate long-tail keywords to attract qualified visitors and increase relevancy.
Long-tail keywords are longer, more specific keyword phrases that prospectors use when they’re close to a point-of-purchase. The idea is simple: bid for more specific keyword phrases to avoid competition and find consumers who are closer to buying exactly what you’re offering.
While there are few keywords (food, Beyoncé, Facebook) that account for an un-proportionate amount of searches, the large majority of keyword searches are made up of more specific, long-tail searches.
About 70% of consumers are searching up less bid on keywords – which is where businesses need to focus their efforts.
Bidding for long-tail keywords is slightly counter-intuitive and is not right for every situation. This is because by bidding for phrases such as “semi-hollow steel-string acoustic guitar” instead of just “guitar,” you’re going to be bringing in less traffic.
However, the traffic you do bring in is going to be more qualified and often more interested in buying what you’re offering. At the same time, less of your competitors are going to be picking up the exact, specific keyword phrases that describe your product resulting in lower cost per click and higher Ad Rank. In the long run, acting on long-tail keywords results in higher Quality Score, CTR, and conversion rate.
In working with keywords, you’ll also want to develop keyword management strategies. To do this, you should group keywords semantically into keyword group themes so you can:
- Organize keyword groups into ad campaigns for each campaign management and ROI calculations
- Write targeted, specific copy for related keywords
- Compartmentalize an extended list of relevant keywords
Ad Extensions
Ad Extensions are additional elements on PPC ads such as star ratings, additional links to sites, endorsements, or “Book Online Today” callouts. They are Google’s way of helping you expand your ad to include additional information and there are both manual and automatic Ad Extensions.
To set up ones specific to your ad, click on the Ad Extensions tab on your AdWords account. There you can set up which type of Ad Extension you’d like to set up and run them at either the Campaign or Ad Group level.
Sitelink extensions allow you to promote additional site links on your ad and are great for broad match searches. They allow you to link to more specific parts of your site and add expanded ad text on an otherwise general ad.
Seller rating extensions automatically appear if your store is rated 4 stars or higher in Google Product Search. This seal of trust increases customer engagement by enhancing your credibility. Moreover, you are not charged for advertising when searchers click on your rating to read reviews.
Location extensions allow you to provide more information about your physical storefront and even adds a link that creates Google Map directions to your store. To set it up, you can manually enter your location or set up a Google Places page.
Call extensions allow you to display your phone number with your ad and shows as a call button on mobile devices. Do note, however, that you will pay for calls instead of clicks if customers use this feature. This might prove useful if you are a business where sales are made over the phone.
Just Say No To Low CTR Strategy & Other AdWords Dogma
Hopefully, I’ve convinced you to just say no to low CTRs and to instead cast a narrow net. Try to get as high a CTR as possible on those keywords, delete the crappy, low CTR keywords that are killing your account, and consider using remarketing and RLSA to scale your search marketing efforts.
Get out of the rut of conventional wisdom and stop doing what everyone is doing. Focus on the lesser known – but totally effective – strategies with the potential for big changes! This is where you’ll find the lowest possible CPAs and a scalable strategy that works.
Conclusion
In the end, the big takeaway is to test your PPC campaigns carefully and track the ROI of your campaigns. While CTR is a metric you should optimize for as it is an indicator of ad effectiveness and factors into your Ad Rank and Quality Score, having a high CTR on its own is not enough.
What you need is a high CTR on relevant keywords that draw in qualified, converting customers.
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