Check out the latest blog by Jenn Mayer and learn all about search engine marketing and click through rates.

If your company is involved in pay-per click advertising, click through rate, or CTR, is one of the most important metrics to measure. Click through rate is defined as the number of times a given ad is clicked on divided by the number of times the ad is shown, or impressions.

For example, if an ad is shown 1000 times and receives 10 clicks, the click through rate is 1%. Sites like Google Ad Words provide a plethora of statistics about your CTR and your advertising campaign as a whole, and often it can be overwhelming to wade through them all. With more graphs and charts than you can shake a stick at, how do you know what a good measurement of your success is?

A good click through rate depends on how competitive your industry is. Earlier this year, a Google employee said that beginning advertisers should shoot for a 2% click through rate. Other PPC experts say the figure should be between 2% and 5% for competitive industries, and above 5% for less competitive industries.

Most would agree that the car business is extremely competitive, but your company’s market may be more or less competitive depending on the number of people and dealerships in your area.

Additionally, where your ad is placed can affect your CTR. A recent report concluded that ads on Bing have a higher CTR than Google and Yahoo.

Your CTR is also dependent on the quality of your keywords. It’s important that the users who are clicking on your ad are qualified buyers in your target market. Let’s say, for example, that you sell televisions. People who search “TV” might not be looking to purchase a television, but they still might end up on your site. They might be looking for television programs, television guides, or just want to research types of TVs and aren’t ready to buy.

They might click on your ad, but they aren’t considered qualified buyers, so the chances of them converting are small. A conversion is defined as the move from simply looking at your website to taking some sort of action. That action could be to fill out a form, request more information, or schedule a test drive. In other industries, a conversion could be a sale, but since most car buying transactions take place offline, we usually measure conversion differently.

Therefore, a keyword like “TV” might generate a higher click through rate, but those clicks won’t be from people who actually want to buy from you. A click through rate on an ad with specific keywords might not generate a lot of clicks, but the clicks are more likely to come from qualified buyers.

The best way to ensure you’re getting a good CTR is to monitor your ads progress regularly, and ensure that your bids and keywords are appropriate. There are a lot of factors to manage, so it’s best if a professional mans the helm. Need help? We just happen to be digital ad campaign experts. Give us a call!