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CTR Formula

5 Factors That Affect AdWords Click Through Rate

Click Through Rate (CTR) is a measure of how effective your Ads and keywords are at getting users to click through. It’s calculated by dividing clicks by impressions:

CTR Formula
A high AdWords CTR is always desirable. You should take action to improve it for all your ads and keywords and look to maintain a CTR of 1% for your Search campaigns.

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To improve CTR, you need to know what affects it. I’ve included here 5 key factors that contribute to your CTRs and recommendations on how to improve them:

Ad Position
This is perhaps the most important factor to your CTRs. If ads are in the top positions, they’ll consistently have higher CTRs than ads that rank at the bottom.

Even the most highly targeted ads that rank at the bottom will have low CTRs. So it’s important that positions for your Ads are high and that you have a high Ad Rank if you want to achieve good CTRs.

An effective way to improve Click Through Rate is by using bid strategies like:

Manual bid strategy – increase bids manually for your keywords to rank higher

Top of the first results page bid strategy – use this automated bid strategy to bid for higher Ad positions

Target outranking share bid strategy – use this strategy to outbid one of your competitors

Ad Relevance
Relevant ads attract more clicks. When users see that the ads are related to what they are looking for, they will click through and that will impact CTR positively.

CTR impacts ‘Expected CTR’, one of the factors to Quality Score performance. And with Ad relevance another Quality Score factor, this can help you achieve good quality scores that are a good performance indicator for your account.

One effective way to make Ads relevant is to add keywords in the ads. Users are more likely to click when they see their keyword in the ad. They’ll ignore generic ads that don’t speak to what they’re looking for, so adding keywords in the ad will make your ads look relevant.

Bids are one of two factors to Ad Rank. And your ad rank determines the click through rate for your ads – with higher positioned ads getting a significantly better CTR. So, to achieve a higher position in the search results, you should bid higher to secure a higher position and also achieve a good CTR.

Search Terms
Each keyword will drive multiple searches to your ads. Some of these searches will be relevant and some won’t. And they will each have their own CTRs which you can see when you check the search terms report.

If some of the search terms have high impressions and few clicks, then you should either look to remove them or improve their targeting. Doing so will help to improve your keyword CTR.

The keyword CTR is an average of all the Search Term CTRs for that keyword. If some of the search terms are underperforming and have low CTRs then you should remove them.

Ad Extensions
Ad extensions give your ad more prominence in the search results. They make your ads stand out from competitors’ and encourage users to click through to your website.

Adding many targeted ad extensions for sitelinks, callouts, structured snippets etc improves ad quality. And this leads to a higher Ad Rank which results in higher click through rates.

So you should add at least 15 callout Extensions, and as many sitelinks that are relevant. And add other extensions that are relevant for your business such as structured snippet extensions, price extensions, location extensions and call extensions.

Working on these 5 factors will make your ads relevant to users and improve your Click Through Rates. This will help to increase clicks and conversions and make your campaigns more profitable.

I'm a Certified Google Ads Expert and Marketing Author and in this blog I share my latest tips and secrets on how to promote your business successfully on the web and increase customer loyalty, retention and advocacy on Google Ads.

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