SEM Tip – Don’t Get Hung Up on Click-Through-Rates
SEM Tip #1
When it comes to managing a search engine marketing (SEM) campaign online in Google AdWords or one of the other search marketing programs, too many businesses get carried away with click-through-rates (CTR).
But before I get into why click-through rates (CTR) are overrated, let’s just clarify what a CTR is. A Click-Through-Rate, or CTR, is a measure of the percentage of people who click on your ad after viewing it.
Typical CTR’s are often well below 1% for most online campaigns, but what is it about them that as soon as they reach 2-3% everyone starts giving each other high-fives even when sales are not affected? So let’s go through the pros and cons of CTRs.
Firstly, CTR’s can be used as a guide to how effective your ad text is. Quite often, the more appealing your ad text is, the higher your CTR will be. But what if you’re in a very specific industry, say ‘neon lighting Brisbane.’ As part of your campaign it would be perfectly normal to include broader keywords such a ‘Brisbane lighting’ in the hope that people who search for lighting in Brisbane will be then interested in neon lighting. However, this is where your CTR can be misleading.
For instance, say my headline for the ad is ‘Brisbane Lighting’ – A large majority of users who have searched “Brisbane lighting” might think this is a relevant ad, so I get a higher CTR. The problem is that they click on the ad, bumping up my CTR and costing me money, only to find when they get to the site that I only sell neon lights. This is a waste…but my CTR looks good right?
On the other side of the coin, if my headline for the ad is ‘Brisbane Neon Lighting,’ all those users who have searched for “Brisbane lighting” will see my ad but only those who are interested in neon lighting will click on it. This means that I get a lower CTR but in this case that’s actually a good thing as I get better quality traffic.
Now, it is well publicised that Google, when ranking ads, don’t just take into account how much you bid, but also your quality score. One of the things that makes up the quality score is your CTR. However, your quality score is unique to each separate keyword, so having a low CTR on a broad term such as ‘Brisbane lighting’ does not affect your quality score on your more targeted keywords such as ‘Brisbane neon lighting,’ so there’s no real advantage to CTR there.
The other downside of having a high CTR is that you use up your advertising budget very quickly. A low CTR has the added advantage of giving you great exposure, as you get more impressions on your ads before your budget is used up. This helps immensely with brand recognition.
So at the end of all this you may be wondering if I can’t trust CTR, what can I trust? Some people put their faith in conversion rates, but this again has many of the same pitfalls. The best statistic to track is cost-per-conversion, which details how much it costs per sale or lead. This is done by the insertion of a snippet of HTML code on your ‘Thankyou for Purchasing’ (or likewise) page. A professional SEM management company can set your business up a conversion tracking AdWords account and manage it throughout the course of a campaign, continually adjusting all facets of the campaign for best performance.
I guess the key thing to take from this today is that when it comes to your online marketing campaigns, don’t worry too much about the percentages; but look at the dollar amounts that it is costing your business per sale to advertise online.
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Read MoreGoogle AdWords – How to Make the Most of Your Pay-Per-Click Campaigns
Whilst organic search engine optimisation will get you so far, it does have its limits. This is mainly due to the fact that when it comes to organic SEO, it is not possible to optimise for every keyword you want to generate results for. Attempting to optimise for ridiculous numbers of keywords is more than likely going to get you blacklisted from Google, and once this happens you really are in a whole world of pain.
So the best option for increasing your reach through search engines is to plunge into the world of search engine marketing through pay-per-click programs such as Google AdWords. Pay-per-click programs allow you to design the four-lined ads you see above and to the right of search results.
But designing your ads is not as simple as it seems. It’s not just a matter of slapping together a promotional piece and waiting for the sales to come rolling in. Google have strict editorial guidelines that govern the use of punctuation, superlatives and displayed URLs. Plus there’s also the trick of using the right kinds of messages that are going to work in a search engine environment. The word chains that you use for your search engine advertisements are vastly different to the messages you would use in more traditional marketing mediums. This is where it becomes important to ensure that your ads are:
- In line with Google’s editorial policy;
- Utilising the kinds of messages that search engine users are looking for;
- Pulling the right kinds of users to your site; and most importantly
- Generating you sales.
But designing the ads is just the first step. Once your ad designs have been created, you need to specify how much per click you are willing to pay as well as listing the keywords you wish to target.
You might be thinking that this is a straightforward budgeting exercise, but unfortunately, AdWords is not as simple as just listing a whole heap of keywords and setting a per-click budget. This is because Google does not simply see who has the highest bid for a given keyword and display their ads first. If this was the case, one cashed-up company could theoretically dominate every keyword search in Google.
Google consider what they call their Quality Score, which takes into account a whole range of factors to determine how relevant your ad is to a given search query. This often means that a small-targeted business can out-perform a large broad corporation despite the larger company outbidding the smaller one quite considerably.
Like most of their algorithms, Google do release part of what goes into into their Quality Score calculation, but how it all comes together is kept secret. An experienced SEM company, such as Reload Consulting, learns from experience how to improve a campaign’s quality score, and this is why investing in an AdWords campaign manager is a wise move.
The quality score is calculated by taking into account a number of factors including landing page load time, landing page relevancy, ad content relevancy; and a combination of how all these factors relate to the keywords. The trick then becomes knowing how to use each of these variables to maximise one’s quality score, and hence, placement in paid search results.
So to achieve the best results from your search strategy, use a combination of both organic SEO and paid SEM. And be prepared to spend a lot of time tinkering if you intend to go it alone.
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