CTR is the percentage of viewers that actually click on your ad when placed on the Search Engine Results Pages (SERPs).

It is actually impossible to measure what a good CTR is and what a bad CTR is. This is because a CTR depends on many factors, including, but not exclusive to:

• The popularity of a key term
• The competition of a key term
• The placement & position of your advert
• The industry you’re in
• How well optimised your adverts are

The popularity of a key term

Typically generic key terms that are very popular generate a lot of impressions, and in most cases, the number of user’s that actually click on such ads are quite low.

On the other hand, specific key terms do not generate many impressions. However, although they’re not likely to generate many clicks, the CTR for more specific key terms are usually higher, simply because they’re more targeted and more likely to attract qualified traffic.

Generic Key Term Books Online Buy Books online at Great prices. Free delivery. www.bookshopexample.com CTR = 1.5

Specific Key Term Gordon Ramsey Cookery Books Low Priced Gordon Ramsey Cookery Books. Free delivery. www.bookshopexample.com CTR = 4.5

When comparing two key terms (one generic key term and one specific key term), such as 'Books' and 'Gordon Ramsey Cookery Books', you are likely to see a big difference in CTR. However, this does not indicate that one is good and one is bad. An ideal CTR should provide the best possible ROI, and to achieve this it is necessary to take into account, and act upon the following factors:

• How the position of an ad changes when the Cost Per Click (CPC) changes
• How the CTR changes when the position of an ad changes
• What percentage of clicks results in a sale or lead (conversion rate)
• What the value of a sale or lead is to the advertiser

So, if in the examples above the keywords are providing the best possible ROI given their CPC, conversion rate and value of a conversion, then we could consider the CTR as good. If the conversion rates and conversion values will allow you to further improve the ROI, you could consider the CTR to be low, as there is room for improvement.

The competition of a key term

To follow the same example, we would expect:
A generic keyword to have a lot of competition, meaning the chances of getting a click is low.
A specific keyword to have lesser competition, meaning the chances of getting a click is higher.

Understandably, competition can play a big factor in CTR.

The position & placement of your advert

Your CTR relies heavily on the position in the SERPs and placement of your ad; whether it is in the SERPs, on the content network or on Google's search network, such as Ask or AOL.

If you gain a high position for your ad in the SERPs, it is more likely for the ad to generate traffic to your website, than if the ad was in a lower position.

However, although a high position may provide more traffic due to a higher CTR, it may not be the most profitable option.

The same is true when taking into account the placement of your advert. If you choose to place your ads on the content network, for example, from experience you are likely to receive a much lower CTR. This does not necessarily mean it is unprofitable to advertise on the content network - it will depend on many factors, including the industry you're in.
Essentially, it is necessary to determine what the most profitable position is for every click, and also where it is most profitable for you to advertise.

The Industry you're in

The industry you’re advertising in will certainly have an effect on CTR.

If you’re advertising in a saturated market, the competition and popularity of key terms will be a lot higher than if you’re advertising in a more niche market.

If an industry has little competition, generally speaking, it is likely to result in higher CTRs, when compared to an industry with a lot of competition.

How well optimised your adverts are

The more targeted a text ad is, the more likely it is to get clicked on by the target customer.

The first step to optimising a text ad is to include target keywords in the advert itself. Inexperienced advertisers can sometimes design all of their ads identically:

Books Online Buy Books online at Great prices. Free delivery. www.bookshopexample.com

In an ideal world, an experienced advertiser would create numerous text ads for every Ad group, ensuring they are tailored to the users query:

Gordon Ramsey Cookery Books Low Priced Gordon Ramsey Cookery Books. Free delivery. www.bookshopexample.com

Additionally, by creating numerous text ads for an Ad group, it is possible to test the performance of numerous ads.

When assessing if a CTR is low, high or average, in essence, you have to take into account the factors mentioned above.

Taking into account these circumstances and utilising sophisticated algorithmic methods to measure the performance of many thousands of keywords, Sayu can forecast a bid amount that will give the best ROI for every keyword in a given PPC account, on a daily basis.