CTR (Click Through Rate) is the most important ad performance measurement according to both Google Ads, other Ad Networks, and the majority of online marketing industry experts.
What is CTR?
CTR is a measurement of the percentage of clicks your ad receives compared against other ads.
What is considered a good CTR percentage?
2% is considered to be good in most industries.
The ads in our experiment average 3-4%.
What is the benefit good CTR?
If your ad has a good CTR, Google Ads will show your ad more often, and discount your clicks. Why? If your ad gets more clicks, Google makes more money. So it’s a win for “them.”
So your ad gets momentum…
Why is CTR virtually worthless?
Businesses have a bottom line, and that bottom line is cost per lead/sale. The most important metric actually is CPA.
What is CPA?
CPA or (Cost per action) is a formula that determines how much you are paying per lead (action).
How much did the lead, phone call, or purchase cost?
Example:
10 clicks at $10/ea = $100
Resulting in 2 leads
Therefore each lead costed $50
I have high CTR? Why am I still not getting more traffic?
More traffic costs more per click. That’s a fact.
Example:
Say you pay $10 per click and spend $100 per day.
You have good CTR 2-4%.
You need more traffic.
You open up your daily budget from $100/day to $1000/day
Nothing happens.
You increase your Cost-Per-Click, then the traffic starts flowing.
Here’s the problem for most every business:
Most businesses needs their CPA to be as low as possible. Increasing CPC directly hurts your bottom line. Most business cannot afford to spend more per click, and therefore lose out on traffic until Google bleeds them dry.
Experiment
A client of ours needs CPA to stay under $8 to stay profitable within their margins. We decided to run a test to see if increasing their CPC would increase CTR and result in higher traffic and discounted clicks like everyone claims.
So we targeted $11 CPA
The results:
- Traffic increased
- CTR did not increase higher than what we already had which was 3-4% average
- CPA landed in the $10-15 range – Too far above our client’s target CPA
Note that our ad still wasn’t in top 3 ads!
Looking at about a year of CTR performance shows it’s completely random, and there’s nothing you can do to influence it.
Case and point
One day on June 21 for no reason at all (without changing anything) there was a spike of 14% CTR. That day our client’s ad received (4) clicks and (0) conversions. How does that make any sense?
Conclusion
CTR only benefits the Ad Networks. You spend more, they make more. Do not be fooled. CTR is overrated. We searched the internet thoroughly, and found no evidence, experiments, or proof where a business benefited from high CTR. All we found was a bunch of so-called expert tips that are just regurgitated fairy tales from the vague misleading horses mouth of Google. It’s quite clear Google and other ad networks just want to trick you into wasting your money. Google’s ad platform is specifically designed to do just that, with bad advice popping up in your face constantly, and their Google ad reps constantly contacting you to do the same.
Our Advice
Keep your eye on the prize. Stay focused on Conversion Rate and CPA… factors you actually have control of.