What is a Good CTR in AdWords

An advertiser asked the question today, “What is a good CTR in Google AdWords?”.  When I worked on the AdWords Support Team we received this question a lot. The standard answer was 1%. If I had to provide a number, 1% is the number I would use but the answer is not that simple.

There are a countless number of different businesses and website that use Google AdWords and every one of them attract a different sort of interest. What may be considered a good CTR for a website that advertises picture frames might be a terrible CTR for someone who is advertising Bail Bonds services.

There are also different networks available in AdWords. Search Network CTR’s are generally much higher than Display Network CTR’s. You can learn more about the differences of those networks in the following article. Search Network vs Display Network.

My first thought when I think about what is a good CTR is why would anyone care? I don’t mean to suggest that CTR is not important, it is, but in order to determine what a good CTR for your ads you need to understand what a better CTR would accomplish.

Better CTR Meaning

A better CTR means that you would receive more clicks for every 100 impressions your ad receives. If you are at a 1% CTR that means your ad is showing 100 times for every click you receive. If you increase your CTR to 5% you would receive 5 clicks for every 100 impressions. That also means you would be charged for 4 additional clicks (the difference between 5 clicks and 1 click).

Having a higher CTR in the above scenario is a good thing if your cost per click (CPC) is lower than your revenue per click. You would then be making more money. If your CPC is higher than your revenue a higher CTR means you are losing more money.

In the Google AdWords Search Network your CTR and CPC are very closely related. In the Search Network CTR impacts your quality score which intern impacts how much you will pay per click in any given ad position. In the Google AdWords Display Network, quality score does not play a roll so CTR does not affect your CPC.

So how do you determine if your CTR is good?

Unless you are using a branding strategy your CTR is good if you are making a profit. It really is that simple. If you are not making a profit then your CTR should only be a concern as to how it is affecting your quality score and ad position. If you are making a profit then in most cases improving your CTR will make you more profit.

If you have determined that the clicks you are receiving are valuable to you and so you want to increase your CTR so you can receive more clicks without gaining additional impressions I have 2 pieces of advice to help you achieve this.

  1. Focus on CTR at the ad or keyword level. Look at the ads and keywords that have the highest CTR”s and try to determine why they perform better than those which have the lowest CTR’s. Are certain keywords more relevant to your ads? Do certain ads use a different call to action or use different ad copy? If your focus is at the campaign level you might inadvertently lower CTR on keywords or ads that were already performing well.
  1. Ad position is the metric that most directly affects CTR. Read my article on CTR and ad position to learn more about this. As a general rule, the higher on the page your ad shows the higher the CTR. Keep in mind that ad position 1 is the highest on the page then ad position 2 and so on. Since there are normally 8 ad positions per Google search page ad position 9 would be the first ad on the second page of the search results causing ads at that position to have much fewer impressions with a higher CTR. Also keep in mind that there are fewer ad positions on mobile devices as compared to desktops.

So what is a good CTR in AdWords? The answer is………   It depends! I don’t mean to sound obnoxious, I just want you to always be thinking about the quality of clicks you are receiving and their value to your business. More is not always better.