Improving CTR Lowers AdWords Spending
In an earlier post we talked about how High CTR Isn’t Everything, but it can be incredibly powerful at reducing the cost of lead acquisition.
Recently we started managing an AdWords campaign for a software company. Over the first month–before substantial optimization had taken place–the CTR of the most popular ad group was 2.5%. After optimization of ads and keyword targeting, the CTR was more than doubled to 5.9%. Because the ad position is determined largely by the CTR, the CPC went from $0.84 the first month to $0.43 in the second month. In other words, the cost of the campaign was almost cut in half in one month, and this was even at a higher average ad position!
What did we do? Simple:
- Selected the right keywords.
- Used keyword matching options.
- Used negative keywords.
- Tested different ads.
The above results are not necessarily indicative of what you can expect every time, but we have used these techniques to significantly improve the cost effectiveness of every campaign that we manage.
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July 23rd, 2010 at 1:33 pm
[...] Search engines use CTR when ranking ads. Two ads might have the same bid, and the search engine will reward the higher CTR ad with the better position or a lower cost for the same position. This is an important way that higher CTR is advantageous: it provides more “bidding power”. In rare cases, higher CTR can lower costs. [...]