A digital marketing agency is familiar with CTR as its one of ways to measure how effective is their pay-per-click (PPC) marketing strategy. Whether or not a site utilizes PPC with the help of Google Adwords is out of the question. Understanding the difference between individual CTR and the average CTR of the website helps marketers and site optimizers to do their job.

Utilizing Average CTR for Data-Driven Decision Making

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The average CTR is crucial in finding if a digital marketing campaign works. It’s the most important metric to monitor in regards to PPC advertising. It on contributes to a keyword’s expected CTR which is a component of AdRank. Each ad and keyword has their CTR in GA. The data will help you analyze its relevance to the what you advertise and which networks.

The average CTR is an indicator of performance. A high CTR shows that the link or ad pays off as it draws traffic to your site. Meanwhile, a low CTR may be the result of ineffective content, targeting the wrong audience, reaching an indifferent demographics, and using the wrong keywords. Still, other factors influence a site’s average CTR that is out of one’s control. Industry, ad format, ad position, and channel are some of the factors or benchmarks that can raise or flunk the CTR.

CTR Benchmark and its Effect on the Data

Based on the updated benchmarks per industry from Wordstream, the field for search network and display network became competitive as the average CTR for all industries on both networks decreased its percentage. Still, the CTR for ads on the search network remains greater than Google Display Network.

The reason behind these data stems from user behavior. Those on the search network are actively eyeing for content related to keywords, so the links and pages get high CTR. Meanwhile, the ads on the display network allow users to skip past the ads. Thus, they become passive and revert their attention to click on the ads or links. Some users also find ads annoying as it disrupts their overall viewing experience.

Display ad format and its position on the search engine results page (SERP) are also CTR benchmarks. The position of the ad or link in the results page can result in a high or low CTR. For instance, belonging to an industry with a high CTR doesn’t guarantee the same result. The site ends up with a lower CTR if it does not rank in the SERP. If the keyword is in high rank or top one, the site can have a higher CTR even if the industry average is low.

Last but not the least, channels significantly influence CTR. Users from different platforms vary in behavior. Those coming from Facebook comes into the site for a different reason to those from Google search. Looking into which channel a page gains the highest CTR is a way to utilize the “last-click wins” approach. That way, the site makes the CTR SEO factor to conversion.

CTR as Part of SEO

Sample CTR data of GreatBikers.com

These are guiding principles to utilize the CTR as an essential SEO and PPC metric. Impressions form a great part of the CTR, but it won’t be complete without the clicks. Engaging users is the key to earning a high CTR. Take note that CTR and SERP ranking are inversely correlated. At the same time, some users prefer to use different channels.

As a webmaster or digital marketer, it’s essential to determine a baseline CTR and goal. Doubling SEO efforts to be or stay on page one of SERP can become the first task. Analyzing data is also crucial to become skilled in tracking the CTR by a selected period. CTR is one of the several data to get from GA for applying data-driven decisions.

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This article will tell you how can you boost your search engine marketing’s (SEM)  profitability.

Let’s refresh a bit. Here’s a rundown of the terms you often encounter (in the simplest language possible):

Search engine marketing (SEM) – an Internet marketing strategy that aims to promote your website through increasing its visibility online on SERP through optimization (SEO) and advertising (PPC).

Search engine results page (SERP) – a results listing returned by Google and other search engines in response to a search.

Search engine optimization (SEO) – the processes involved in affecting website or web page visibility in Google’s organic search results.

Pay-per-click (PPC) – an Internet advertising model directing traffic to the website and where advertisers (usually, website owners) pay the publisher (usually, Google and other search engines) every time the ad is clicked by a user.

Acquisition – the process of converting a user to a visitor then to a customer.

Enhanced cost-per-click (ECPC) –  a bidding feature wherein advertisers can raise their bids for those clicks that most probably lead to a conversion.

Going back…

If you know who are more likely to buy from you, will you not be willing to spend more in acquiring these customers? Of course, you would be. Because of the features like ECPC, we cannot underestimate the power of PPC in converting a consumer into becoming a paying customer.

There remains the fact that PPC will not give you unlimited stream of prospects. This means focusing on the long-term value that PPC is helping you acquire in the first place.

Let’s take this for an example…

A conversion has an immediate financial advantage.

Average CPC: $3.00

Conversion rate: 10%

Transaction (cost/conversion): $15.00

Transaction amount (value/conversion): $30.00

Return: X2

Imagine that you can earn this much for every new customer. Now imagine if that customer has a lifetime value. When we say the customer’s lifetime value, the tangible factors are repeat sales, referrals, etc. while the intangible factors are loyalty and positive word of mouth, among others. Customers with lifetime value are what ECPC targets.

Customers are not created equal. This is a fact. Some customers will buy from you today and then disappear forever. Then, there are customers who will buy you today, the day after tomorrow, next month and so on. If you can identify which channels, ad groups and keywords to target these repeat customers, you would certainly want to invest more to these channels, ad groups and keywords.

You might think of this as an experiment, but it is not. Data showed that customers who were acquired through across various paid search terms usually differ in their lifetime value. And the difference is from 30% and up.

Put it this way. As a marketer, you should be targeting people with lifetime value, not only those who can give you immediate payback. If your SEM and thereby, SEO and PPC target only those with an initial value (first-time and one-off customers), you are leaving immense opportunities behind.

How can we optimize PPC for acquiring customers with lifetime value?

Initially, you need to track your customers’ historic spending. Compare each ad group based on this factor. Target and re-target those customer segments that have evident patterns of high long-term value. Invest more on these high-return campaigns.

Next, focus on customer-centric metrics and ditch the transactional ones. For instance, ask “who were acquired by this particular keyword?” and not “how much did I spend for and earn from this particular keyword?” Most indicators are quantifiable, but they usually give insights about both short- and long-term benefits.

Optimizing PPC around lifetime value is not without difficulties. However, you can use this in guiding your overall SEM strategy to boost acquisition and thereby profitability. Maximize every dollar you spend on bids by investing on the highest-return campaigns thereby driving long-term business value. When that time comes, you no longer have to imagine what it feels like having a league of returning customers.

Image credits: Creative Strategist | SAP | Next Level

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