So, what is a good click through rate (CTR)? In this video I am going to explain the importance of CTR and let you know what a “good” CTR is looking at some 3rd party data.
The data I am referencing is from WordStream
What is a Good Click-Through Rate?
You’re running ads on Google, you’re getting clicks to your campaigns, and you want to know, what is a good click-through rate? How many people should be clicking my ad over my competitors? How do I know if my ad sucks, or whether it is good? Well, I’m going to reveal that to you, and by the end of this video, you are going to understand what a good click-through rate looks like, and more importantly, what you need to think about in order to get a good click-through rate.
Why Click-Through Rate is Important
Click-through rate is one of the most important metrics in Google ads because it’s one of the few areas in the system where if you optimize the performance of it, you end up scaling your account without having to pay more for your traffic. Remember, in Google ads, whenever you try and scale your campaigns in terms of driving more volume, the usual giveaway you have to give back to Google in terms of money is you’re going to pay more for your traffic, especially if you’re scaling your CPA target or your ROAS target.
Click-through rate—none of that matters. You can just scale your account with the same consistency levels of traffic costs by just increasing the number of people clicking your ad over your competitors. Let me quickly give you a demonstration as to how important this metric really is for your campaigns.
The Power of Incremental Improvements
Say for argument’s sake, you had a campaign that got 200 clicks per day with a 10 percent conversion rate. You could expect 20 leads per day from your campaign. Now imagine this same campaign has a click-through rate of 3%. If we were to increase that click-through rate from just 3% to 4%, that is not a 1% improvement. That is a 33% improvement.
And yes, I know you might be thinking, I’m stating the obvious, but you’ll be shocked to know that I speak to so many people who say I’ve increased my click-through rate from 3% to 4%. I’ve improved it by 1%. No, that is a 33% improvement, and I really feel like I had to explain that to you. Sorry, if you understood already.
What Does This Mean in Practice?
So materially, what does that actually mean? For the campaign example I gave, well, it means you go from 200 clicks per day to 266 clicks per day. It also, more importantly, means you go from 20 conversions per day to 26 conversions per day. If we talk about this improvement over a period of a month, we are talking about the difference between 600 leads and 780 leads—an increase in 180 leads per month. To any business, this is a massive improvement. It’s a game-changer, and it’s going to allow you to make the profits you need to invest into your business, grow the business, and really push on using Google ads—and all of that because of a 1 percent movement of your click-through rate figure, moving from 3 percent to 4%, which is definitely, by the way, a very achievable thing to do.
Is There an Ideal Click-Through Rate?
So with this in mind, I’m going to tell you exactly what the ideal click-through rate for your campaigns should be, and it is… Well, to be honest with you, I’m not going to do that, and the reason for that is because there is no such thing as an ideal click-through rate for your campaigns.
Let me explain. One of the biggest determining factors in click-through rate and the behavior of customers on Google ads is dictated by the industry niche that you are operating in. Some industries are simply more prone to people clicking ads than others. People trust ads more in some industries than other industries, and it varies. Lucky for us, PPC software company WordStream does this research basically every single year, looking at click-through rates and other metrics across different types of industry niches across 17,000 different Google Ads accounts that it manages.
Industry Variances in Click-Through Rates
So here’s the data, and you can see that there are huge variances in the click-through rate between different types of industries. Picking two industries as an example, we can see that in the travel industry, it generally gets an average of 10 percent click-through rate because booking flights and things like that—people are used to doing that with Google Ads. They’re used to seeing adverts for buying flights. And the reason for that is because customers don’t necessarily care as much who is selling the ticket. All they want is a cheap flight for the destination that they are going in. It means that people are much more open to advertising because at the end of that ad, it could be a cheaper flight.
However, if we contrast this with legal services, we can see that the average click-through rate is just 5.3%. To be honest with you, I think this is because the legal profession is a much more professional service, much more of a considered purchase, and the person buying these legal services might also be leading heavily on location. And if you go further down the page, you are going to find the organic local pack where they can see lawyers’ offices nearby where they live. So it’s much more of an engaging way to find a legal professional than if you looked at just the search results on ads, which kind of makes sense. I’m just guessing here, but there is a disparity between these two industries, and it needs to be accounted for.
The Limitations of Ads
One thing, by the way, just to remember, even though we’re using Google Ads and I’m training you on using Google Ads, do not forget that people hate ads. Yes, of course, Google are getting clicks on ads. Last time I checked, Google were not broke, but ultimately, consumers prefer and trust the organic results better and more so than the paid results. And that accounts for a lot of the disparity between different industries.
What is an Objectively Bad CTR?
But let’s park that aside. I’m going to come good on my promise of this video. We’re going to talk about actually what is an objectively good and an objectively bad click-through rate, looking generally speaking at Google ads. Say for argument’s sake, you’re running a campaign and your click-through rate is just 2% (whether it’s 2.5% or whatever). A 2 percent click-through rate is objectively, on Google Ads search campaigns, a bad click-through rate. It’s low. There’s no doubt about that in my mind.
Addressing Low CTRs
One of two things could be going on here. Either your ad completely sucks, and you need to go back to the drawing board and think about clicking through. Going back to the ad and writing an ad that’s going to really compel users to click based on what you’re trying to convey in terms of your unique selling points and why people should click through to your business and how you can help. And of course, obvious things like relevance as well. In fact, in my next video, I’m going to walk you through my exact process I use for writing killer ads that dominate the search results. So if you want to get that video, make sure you hit that subscribe button because it’s coming out very, very soon.
However, if your ads are actually okay, the other issue you’re going to have is a mismatch between the user’s search term, your keywords, and your landing page. There’s going to be some kind of mismatch there. The traffic quality to your ad is not going to be good because the user’s typing in a search, they see your ad is less relevant than everyone else there. And they’re going to other ads or maybe further down the page to the organic results.
Relevance is Key
As a result of that, you need to investigate your search terms report to make sure the traffic quality aligns with exactly what you are promoting. If you’re promoting something completely different to what your search terms are saying, of course, your ad isn’t going to get clicked. You’re going to get a terrible click-through rate because your ad is not relevant to the user.
A Real-Life Example
So let me give you a real-life example. I was auditing the account of a pest control company. I noticed that their click-through rate was only 2.6%, which is really, really low. I went into the search terms report and realized they were getting a ton of traffic for a household name of Ant Poison, and they weren’t getting the traffic they needed for the specific service they offer, which is professional pest control services. There was a complete mismatch, and people typing in this brand of ant poison were not going to click an ad for professional pest control services. That was never going to happen. Luckily, this was an easy issue to fix with a few match type changes and negative keywords.
When a Low CTR is Acceptable
But sometimes, actually, what I’m going to tell you is… Do you always want a good click-through rate? Let me explain. So I work with a B2B company who rents out TV screens and LED screens to businesses for events, conferences, and other things like that. The types of searches that a business professional looking to hire this equipment for events types in is exactly the same as the types of search that somebody just looking to rent a TV to watch the football on is. That’s a problem. We didn’t want clicks from the consumer, but only businesses. Therefore, we used the ad as a gatekeeper to getting a click by explicitly saying “for business only,” “for trade only,” really putting up the barriers to anybody who’s a consumer thinking of clicking the ad.
The Results of Strategic CTR Management
So what happened? Well, as expected, our click-through rate went down. However, our cost per conversion also went massively down as well. So it’s a win-win. We’ve saved money on clicks we shouldn’t be getting. Even though the click-through rate fell down to the floor, we still optimized the campaign successfully. So sometimes you have to think about the traffic you’re generating and think, “Do I need a high click-through rate here if I’m using the ad as a gatekeeper to make sure my traffic quality is in line with what I’m promoting?” I’m qualifying users on the search results page.
Conclusion
So after all this, what is a good click-through rate? Well, you know what the answer is, right? It completely depends on your industry. I would use that benchmarking report to kind of see how you’re doing. Of course, it’s an average; some will be below, some will be above, but ultimately that gives you some kind of guidance with some data that we have in the industry as to where your click-through rate could potentially sit, and where it should potentially be.
But I always add in this caveat when it comes to looking at data and studies from the PPC industry. This is completely dependent on the offer of the advertiser and how good they are at conveying that offer. And if you’re looking at something where it’s just literally 30 characters as a headline, and 90 characters as a description to boil down what a business does, and what their offer is, quite often that misses the mark.
Final Advice
So in reality, the answer to what the best click-through rate is, is the same as your mom and dad probably advised you when you were a child: Just do your best. That’s ultimately what you can do. Work hard on your ad content, work hard on your offer, make sure there’s cohesion between your ad and what the person’s typing in, in terms of your traffic quality, and really focus on writing good ads. Keep working at it, keep testing, and eventually, you’ll get there. You will increase your click-through rate.
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