The Good, the Bad and the Ugly: Click-Through and Conversion Rates

I’ve received quite a few emails from readers of this column over the past month, many of which are questions and comments that many of you might be interested in hearing. So I’m going to answer a few of them in today’s column and again next week.

First, I’d like to thank all of the readers who have sent such nice compliments. I’m happy to know that my advice is helping so many of you build better campaigns and get better results from existing ones. But it occurred to me that many other readers could benefit from answers to some of the questions I’ve been answering via email.

So the good folks at Search Engine Watch have set up a new sub-forum called Profitable PPC in the SEW Search Engine Advertising forum. Unless your message to me is private, please post comments and questions there. I promise to “hang out” in the forum and answer questions. That way, some of the Q&As can turn into real discussions that can let us fully explore interesting topics.

On to the mailbag: I’ll start with a question I get frequently: what are “good” CTRs and conversion rates?

That’s a tough question to answer generally, since PPC results can vary quite a bit from industry to industry, from site to site, and even within ad groups in a single campaign.

But here are some safe generalizations:

  1. CTR will always be higher for products/services/needs for which there’s already strong demand, and lower for those that are relatively unknown, new, multi-faceted and/or difficult to describe. So, for example, lots of people search for recipes online — so an ad that’s triggered by the keyword “guacamole recipe” will result in high CTRs if the text promises to provide the ultimate recipe for guac.By contrast, an ad that’s triggered by the keyword “productivity software” will get a lower CTR if the ad text (necessarily) describes vague features and benefits (e.g. “Save Time and Make fewer Mistakes”).
  2. Conversion rate will always be higher for “soft” offers than for “hard” offers. So an ad that offers free downloadable mp3s will usually result in a higher conversion rate than an ad that leads to a site that sells high-priced products or services.

With this in mind, here are some guidelines:

If you use the techniques I’ve described in previous column installments, especially regarding small, tight ad groups, then you should be dissatisfied with CTRs that are lower than 2 percent. For low-demand products/services (the latter case in #1 above), the best CTRs may never rise above 3-4 percent.

But for higher-demand products/services, you should shoot for 5 percent and above, and though double-digit CTRs are tougher to achieve, they should be your ultimate goal. It’s not unusual for even non-branded free offers to result in conversion rates of 20 to 30 percent — and even higher.

Conversion rate ranges are similar. A good conversion rate for a hard offer would be a minimum of 2 percent. For B2C eCommerce sales, it shouldn’t be difficult to achieve above 5 percent. And for softer offers — low-priced products, free trial software downloads, etc. — 10 to 20 percent conversion rates, and even higher, are definitely achievable.

This depends heavily on a topic I haven’t covered yet, landing page design and testing, so don’t worry if you’re not “there” yet — you will be soon. If you can’t wait, tune into PPC Rockstars on Monday, November 17 at 4:00 PM EST for my PPC Clinic session with “The King of Konversions,” Tim Ash, an SEW Expert and author of the bible on the topic, Landing Page Optimization. If you miss Monday’s show, you’ll be able to download it later or listen to a rebroadcast.

And if you’ll be attending the Chicago Search Engine Strategies conference December 8-12, stop by Booth 204 Tuesday or Wednesday at 2 PM, where I’ll be helping volunteers from the audience by analyzing their ads and landing pages.

I’ll pick up next week with some additional answers to reader questions. Meanwhile, jump on over to the Profitable PPC forum and get in on the conversation!

Join us for Search Engine Strategies Chicago December 8-12 at the Chicago Hilton. The only major search marketing conference and expo in the Midwest will be packed with 60-plus sessions, multiple keynotes and Orion Strategy sessions, exhibitors, networking events, and more.

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