How Important is Click Through Rate in PPC?

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In order to assess the effectiveness of marketing strategies and justify spend, marketers need metrics. Metrics are essentially sets of numerical data based on different marketing activities, that can then be measured against targets to assess marketing performance.

This quantifiable evidence then allows marketers to allocate their budgets according to which areas justify the greatest spend. Metrics are useful for building marketing performance in a variety of other ways too:

  • They give a fairly accurate idea of brand awareness and the effectiveness of marketing campaigns within your target audience.
  • They provide information on your competitors.
  • They provide an information base that can be drawn upon to help influence future decision making.

For Pay Per Click (PPC) campaigns, one of the most commonly used metrics is Click Through Rate (CTR). However, the effectiveness of CTR as a measurement of marketing performance has long been the subject of debate.

 

What is ‘Click Through Rate’?

In a nutshell, CTR is the number of people who actually click on your ad. It is used to measure online advertising performance, particularly for PPC campaigns. CTR is calculated by dividing the number of times an ad is clicked by the number of impressions (times it is seen).

 

Why is CTR Important?

CTR is especially important to PPC campaigns as it has an impact on your Quality Score, which is what determines the cost and effectiveness of your paid search campaigns. Quality Score is Google’s rating of the quality and relevance of your PPC ads and keywords. Therefore, CTR has a direct impact on your Return on Investment (ROI). CTR also has a number of other benefits:

  • It gives you an overall view of how well your ads are attracting your target audience. This is especially useful if your rates during a campaign are unusually high or low.
  • It provides you with a base of visitors who will potentially convert.
  • It helps to determine the success of a particular campaign compared to previous ones you’ve run.
  • It helps to gauge your success against your competitors.
  • It helps you to evaluate the effectiveness of your call to action.

 

Common problems marketers face when measuring CTR

It can be difficult to determine how much CTR actually affects your Google rankings due to other factors. For example, if a company suddenly improves the quality of its content and promotes its website better, their rankings will improve at the same time as being discovered by more users and therefore getting more clicks. Other reasons why people are hesitant to use CTR as an accurate metric are:

  • It doesn’t always lead to a conversion.
  • It can also include “bad” clicks, such as those from your competitors and cold callers.
  • It doesn’t tell you the quality of the lead.

 

So what else should you be focusing on as well as CTR?

Measuring your CTR is still useful, as it gives you an idea of how well your ad is performing, and as it has an influence on your Quality Score, it does directly affect your ROI. However, alone it can’t tell you the real success of your marketing campaigns. ROI is the most important metric to monitor, as this is what will justify your marketing spend. ROI calculation requires more in-depth research into exactly how visitors are engaging with your website, and which elements are leading to the most conversions.

 

How Ruler Analytics can help

Ruler is an invaluable tool in calculating your ROI, as it not only analyses visitor levels, but also monitors each lead individually, providing you with vital information about where your conversions are coming from. In addition, Ruler can also analyse the keywords during a search. With Ruler Re-provide, you can see exactly what your visitors are searching for, enabling you to include the right keywords for SEO, and providing attribution for phone calls and visitor journeys.

To see the benefits of Ruler for yourself, take advantage of the 30-day free trial. For more information on this and all the latest news and updates, follow Ruler on LinkedIn, Twitter and Facebook.

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