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High CTR Isn’t Everything

Posted by Josh on Friday, March 24th, 2006.

High Click-Through-Rate (CTR) is a good indication that people find your ad compelling. AdWords even rewards higher CTR by letting you bid less for the same position than someone who has a less effective ad. So the name of the game is maximizing CTR, right?

These are real AdWords performance statistics.
These are real statistics for a 24-day period
of a campaign that we manage.

Not always. Aside from having a very effective and compelling ad, there are two other reasons you may have a high CTR: Poor selectivity and click fraud.

Poor Selectivity
People are clicking on your ad that are poor prospects for an actual sale. Your ads aren’t prequalifying, instead they attract clicks from people looking for a product or service different from those that you offer. Ads that are in the top position(s) are also much more likely to receive clicks from people who either don’t know the difference between paid and natural search results or who don’t care.

Click Fraud
Suspiciously high CTR may be the result of competitors trying to drive up your advertising costs by clicking on your ads. While for lower positions this has a partially compensating benefit of improving your CTR and hence your bid, at the highest ad positions it simply costs you more money. Plus, at the top positions you are usually paying top dollar (hgih CTR notwithstanding) and are more visible to the competition that may otherwise not click on you if you were further down the list.

The best way to identify these two problems is through examination of website statistics. If many visitors that come from your high CTR campaigns are only staying for one or two pages and/or a very short period of time, it is very likely that you are experiencing one of the two problems above. This assumes that your average visitor stays longer, otherwise the main concern is that your website may not be effectively converting good prospects into buyers.

© Web 1 Marketing, Inc.

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Categories: AdWords, Click Fraud, MSN adCenter, Overture, Search Engine Advertising, Yahoo Sponsored Search.

One Response to “High CTR Isn’t Everything”

  1. CTR explained Says:
    March 9th, 2010 at 12:13 pm

    […] long time ago, we wrote briefly about how higher Click-Through-Rate (CTR) values aren’t always desirable, and our clients often ask how to best interpret the significance of […]