Comments on: The most important pay per click metric is not click through rate

By: peter a

peter a — Tue, 08 Apr 2008 12:54:51 +0000

You make some great points…and I’d like to hear what you think is the best way to determine your best performing ads when you take into consideration CTR and Conversion rates. Some have suggested to multiple these two to get a ratio (CTR X Conversation Rate = ?). I would think there is a more precise formula..some of my tracking does not provide me with the cost of a conversion but simply the % of clicks converting so I don’t think I have all of the data…any suggestions?

By: Increase pay per click conversions & ROI by including a price in your ad at Jennifer Slegg - Search Engine Marketing Consultant

Tue, 01 Apr 2008 18:47:30 +0000

[...] Do note, that CTR rate isn’t the key, because this is what many advertisers focus on. With Google AdWords focus on it when it comes to their quality score algorithm, many advertisers have begun focusing on CTR as their main metric. It is your ROI that will be your determining factor in whether the pricing ad copy works. Want to explore this a little more? Read The most important pay per click metric is not click through rate. [...]

By: Andreas Reiffen

Andreas Reiffen — Tue, 17 Jul 2007 14:41:55 +0000

If everybody agrees, at least someone has to disagree (late, however).
One essential characteristic of PPC auctions is that there is a trade-off between volume and profitability/ROI. Higher bids lead to lower margins, but at the same time to higher (better) positions and increased volume of clicks. Profit is the goal of PPC, not ROI! ROI increases with lower positions (that’s scientifically proven). So what would you prefer? a) ROI = 350% and Profit = 10$ OR b) ROI = 15% and Profit = 100$. I would take b) However, I agree, ROI-metrics are more important than CTR (CTR doesn’t much).

By: Philomena Ojikutu

Philomena Ojikutu — Thu, 03 May 2007 18:42:40 +0000

Thanks Jen for this insight. I just found your new blog today. Keep up the good work.

By: Ohad Gliksman

Ohad Gliksman — Fri, 27 Apr 2007 17:00:06 +0000

Geordie,
While CTR is only a factor of the quality score as you say, it is very important especially for crowded markets if you want Google to show your ads at the campaign initial stages

By: Gordon Choi

Gordon Choi — Thu, 26 Apr 2007 13:37:09 +0000

Surely ROI is the ultimate goal we’re working towards, while CTR is always a good indication.

By: Geordie

Geordie — Tue, 24 Apr 2007 16:49:10 +0000

Ohad-CTR is only a factor in ONE of Google’s quality score algos-the ‘ad rank’ QS. It doesn’t affect your min bids like the landing page QS.

By: Ohad Gliksman

Ohad Gliksman — Tue, 24 Apr 2007 07:55:22 +0000

Don’t ignore CTR as a measure.
While CTR is not as important as ROI, it can help determine your quality score and affect your cost per click levels.
I usually measure a campaign by ROI but also dedicate some time to reaching decent CTR, at least at the beginning of the campaign

By: Andrew Timberlake

Andrew Timberlake — Tue, 24 Apr 2007 05:02:17 +0000

I think the main problem is that within the standard AdWords reporting, click through is shown against impressions.
Therefore, the natural tendancy is to get a higher click through rate.

A lot of people use PPC for traffic without thinking carefully enough about what they are trying to achieve with that traffic.

By: Geordie

Geordie — Mon, 23 Apr 2007 22:12:06 +0000

I wonder if all the concern about CTR stems back to the old days of having to be paranoid about your CTR to ensure your keywords didn’t go ‘inactive’ in the legacy Adwords system. Of course Adwords has changed since then, but the mentality sticks…