Google AdWords Tips | CTR isn’t everything!
December 28th, 2007 by Mike W. Read more about Google AdWords TipsNever let anyone tell you click-thru rate is the be-all end-all of AdWords analysis. Smile and notify them that they're not seeing the entire picture.
Clicks are great, but if your traffic doesn't perform your most wanted response (MWR), then you just lost money. I know of few marketers who want to pay Google to give them traffic that simply pokes around and then wanders off.
WE pay Google to give us traffic so we can provide them information and eventually help them make a purchasing decision.
Take a look at this:
Some people may automatically choose the loosing ad because more people are clicking on it.
Remember, this doesn't capture the whole picture.
It turns out that the winning ad has a much smaller cost per conversion, a critical piece of info.
To ultimately decide which ad would better suit you, you must include your profit margin and look at what you are able to afford. Here's what to think about:
- If your margin is large, sheer masses of sign-ups may benefit you more because this of course leads to more sales.
- If your margin is small, you want to maximize the efficiency of acquiring customers, which means you might want to focus on conversion rates.
So now if anyone gives you some weakly constructed argument only involving click-thru, you can toss these lemons right back at them.
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About the Author
Mike is an internet marketer at MindValley responsible for running marketing tests, designing product launches, and leading an eCommerce project.
Check out other posts by Mike W.
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Vishen Lakhiani
very true mike. We deal with small business operators, and the biggest challenge for us, is explaining the difference between 10 very qualified leads and 100 random visitors. As so many of them are focused on clicks rather than conversions - the message is often lost. when budgets are tight - it's conversions that matter.
I disagree with your analysis of the two ads
there. If we assign the ctr of the left ad as X and
conversion of the left ad as Y then we have:
2d's ads ctr and conversion are respectively:
1.5X and 0.76Y.
The # of sales is proportional to XY in the left ad
and to 1.5X * 0.76Y = 1.15XY in the right ad. So we
see that the right ad genereates 15% more sales than
the left ad and thus is the better ad, period.
So the right ad which you branded "Losing ad" is
actually the Winning Ad.
So do I get to charge people $2000 an hour like you
do? LOL
Which drives me nuts that nobody (to my knowledge) has created a commercially-available script for affiliates that allows tracking of ads on a conversion basis. They all do keywords, but nothing on the ad level besides CTR. I've written insanely good ad copy before... for drawing curiosity clickers
That's a really interesting topic... I've always though that Conversion Ratio does matter and it does, but if you have a lower CR and get a higher CTR, thus lower adspend for similar results, then it's kind of like a double edged sword...
There's the notion that it "damages your adwords account" as well, but if you are doing content network, like this test clearly is then I think going for the "left ad" is the way to go, since CTR has nothing to do with content network.
Just my 2 c,
- Chris
Shimon, you might be forgetting that a higher click thru incurs more cost, so it isn't quite as cut and dry as that.