Four Reasons to ‘Just Say No’ to Low CTR
Published: July 7, 2014
Author: Joe Stanton
Pursuing a low click-through rate paid search strategy is, in my opinion, a losing bet. So is bidding to a particular position, as well as most other tactics that emphasize low click-through rates in hopes of finding higher conversion rates at lower ad positions. In this post, I’m going to show you why these paid search “strategies” will cost you, and provide you with four reasons you should “just say no” to low-CTR PPC strategies.
What is a ‘Low CTR’ Strategy?
Before we get started, let me explain what I mean by low-CTR strategies. The first is when you purposefully target broader keywords in your niche. These keywords include terms with navigational and information intent, as well as those with ambiguous intent – all of which have painfully low click-through rates. The second is when you employ a strategy to reduce clicks on your ads by either targeting lower ad positions in the hopes of finding higher conversion rates, or deliberately sabotaging your ad copy to discourage unqualified buyers to click on your ads. Back in the day, either of these strategies may have worked. These days, however, tactics like this simply won’t give you the ROI you’re looking for. Here are four reasons you should just say no to low CTR strategies.
1. Google Expects Much More of Your Ads
As AdWords has become increasingly crowded, search engine expectations (Bing Ads and Google AdWords) from advertisers have also increased. Today, writing poor-quality ads and expecting them to perform simply isn’t going to happen. If we assume that Quality Score is essentially based on exceeding the expected CTR, the figure above shows that search engines have raised the bar substantially in terms of the CTR it expects – and it keeps trending higher. Why should you care?
Average Quality Scores Have Fallen
With Google’s higher expectations have come decreasing average Quality Scores. Today, the average Quality Score is around 5/10. Four years ago, however, it was closer to 7/10, indicating that Google’s standards are indeed getting more stringent and that the fundamental process by which the Ad Auction works has changed – and continues to change.
Quality Score Impacts CPC
As Quality Scores fall, the value of having an above average Quality Score in terms of the discount on CPC is 200% more than it used to be. The following table shows you how your overall Quality Scores affect your CPC: Ever found yourself thinking that you want lower CTRs? Yes, by adopting a low CTR strategy, you’ll be paying for fewer clicks. However, poor Quality Scores (i.e. running ads that don’t meet Google’s increasingly demanding CTR expectations) mean that you could end up paying more for those fewer clicks – as much as 400% more.
2. Low Quality Scores Negatively Affect Impression Share
If you’re pursuing a low-CTR strategy, maybe this will make you think twice. As well as expecting more from your ads, Google has also been working to raise the quality of the ads it shows to searchers. This means that if your ads don’t measure up, they’re unlikely to be shown at all. In the preceding figure, you can see that, based on my data, you can expect to either lose or gain an average impression share of 9% based on every single point decrease or increase in Quality Score. This means that, if your ads are poor, Google may not even bother displaying them in the SERPs. It’s like you’re not even running an ad campaign to begin with.
3. High CTR Campaigns Can Be More Profitable Than Low CTR Campaigns
Some advertisers genuinely don’t care about their CPC. After all, if you can turn a profit at $100 cost-per-click, why would you care about lowering it? Well, the reason you may want to rethink this position is that we have found a direct relationship between cost-per-click and cost-per-conversion. We analyzed our customer accounts across different search engines and found that the higher the CPC, the higher the cost-per-acquisition. Simply put, if you’re running a profitable campaign with high CPCs, it would be even more profitable if you could lower your cost-per-click by focusing on raising CTRs and Quality Scores.
4. High CTR Ads Do Not Necessarily Have to Have High CPA
Something else that many advertisers claim is that their high-CTR ads have prohibitively high CPAs. Although this is true in some cases, it doesn’t have to be this way. Sam Owen, a friend and fellow paid search expert, recently tipped me off to a situation in which one of his account keywords, “free”, had the highest CTR of any of his keywords. Unfortunately, it also had the highest CPA at $143.75! There are a couple of possibilities here. The first is that “free” is a keyword that Sam shouldn’t be targeting. Just because you’re aiming for a high CTR doesn’t mean you should go after keywords that don’t make sense for your business. The second possibility is that the “free” keyword is resonating with prospects (providing Sam with the high CTR), but his landing page is preventing them from converting. In this scenario, radically changing the offer might entice more prospects to take action, thus increasing conversion rates without increasing the CPA dramatically.
Stop Wasting Time
Make no mistake, friends – the rules of the game have changed. If you keep wasting time by pursuing low-CTR strategies, you’re going to get left behind. I hope this post has inspired you to “just say no” to low-CTR PPC strategies. Instead, be more picky! Focus on a narrower range of highly relevant keywords and push those CTRs through the roof. Delete those poor-quality, low-CTR keywords that are harming your Quality Score, and don’t forget to use remarketing and RLSA to scale your paid search efforts.