Guidelines for a Great CTR

I love impossible challenges and it's probably what attracts me to Adwords. We are continually researching different areas of Adwords and one of the great challenges is ad copy. You might think that ad copy is simple after all its only 95 letters or spaces on 3 lines of text but you would be so wrong. Ad copy involves the copy, relationship to the keywords, business strategy, and the mindset and perceptions of the person. So it's as simple as language, people, and systems - three of the most complex subjects on the planet.

The purpose of my research is to understand what makes a high performing advertisement and then find ways to apply those findings to our client accounts. Let me start with some basic numbers so you understand the scope of this research. We currently manage 1,365 ads related to 100,236 keywords creating 298,292,714 impressions resulting in 140,511 clicks and 3,241 conversions last month. For those grabbing for a calculator the average CTR is 1.03% with a conversion rate of 2.35%. In reality the CTR ranges from a low of about .5% to an upper end of 15%. The data is from 40 different businesses with a different strategy working for each of those. Some numbers are low and some are high because they are planned to be like that.

As you might guess one of the first things we have to do is get down to more manageable levels of data because at this level we are drowning in data and starved for information. I passed this data through a series of Excel spreadsheets and Access Databases to isolate different data sets. In this process I removed or isolated data because of things I knew about the data set and the business strategy. Some clients track conversions others have branding strategies, some have low commitment conversions, and others have high commitment conversions. Some have ads designed to filter the traffic resulting in very low CTR rates but much higher quality traffic. What we are attempting to do is find some basic guidelines that drive performance. While we call them rules they are very much guidelines because they may or may not apply to your specific situation.

Guideline 1: Keywords are King

This guideline is almost without challenge and it works like this. The more focused the keywords are to the ad copy the higher the response - end of conversation! Small focused keyword lists attached to very specific ads outperform everything. Expand the keyword list and you dilute the keyword focus and your CTR drops. The way to destroy your CTR is go into the keyword tool and pick words without consideration of the mindset of the person doing the search. Keywords that contain intent to act are always a home run.

Guideline2: Simple Direct Copy Wins

In case after case this guideline proved itself over and over. Simple direct ads get more clicks and attempts at being cute, humorous, gimmicky, or creative get crushed. It makes lots of sense if you think about this the person entered a search and is looking for that. Repeating what they just keyed in has more connective strength than anything cute. People do not read ads to be entertained they are information seekers and are not just out for a joy ride. Give them what they want and they will respond.

Guideline 3: Phone Books kick!

Google has become the phone book and with every client we run a phone book campaign. This includes keywords that are tightly related to the business including things like the business name. These ad groups are always the stars of the account in both CTR and conversion. It makes complete sense that traffic would be very responsive if they are looking for you and know who you are. This throws some clients and they feel that they should not have to pay for this traffic after all they come up first for their name. That might be true today but there is no guarantee that will be true tomorrow. It's very easy to be first one day and on page 500 the next. Since the searcher is clearly looking for your business it is worth the few pennies to make sure they find you. Experience has taught us that even when the client is number one on the page that the ads still get great response rates. In many cases as much as 40% of this traffic will come through the ad even with a number one organic position.

Guideline 4: Strong Brands Rock

If you have a strong brand by all means flaunt it! Ads that match branded keywords to branded ads pull like nothing else. If you are like the other 99% of businesses and your brand lacks pull then create a plan and change that. Make your brand mean something and it will pay you back over and over. Branding works for businesses of all sizes and today is the day to start the process of making your brand stronger than it was yesterday.

Guideline 5: Competitors make you stronger

Competitive names and brands are like explosives - very powerful but also very dangerous. If you put these in your campaign you need to be prepared for the day that you get a "Cease and desist" letter from your competitor's lawyer. We are NOT LAWYERS so if you chose to do this talk to your lawyer. The rumor on the street with this is that there are generally no grounds for a Cease & Desist but most clients are not prepared to pay the cost of defending their rights, if they have any. Some clients have a strategy of dealing with it when they get it and most back down from the use. The other argument is that since the searcher cannot see the name or brand then it's impossible to cause "Marketplace confusion". Again talk to your lawyer.

Guideline 6: Leave your ego at home

Putting your business name in the headline of an ad is almost always a mistake. The exception to this is a phone book ad or a very strong brand name. Simply put Guideline 1 overrides this guideline. I cannot tell you how many times we have replaced a business name in an ad and have seen improvements of 2-300% in response. The purpose of the ad is to get them to your web site. It is then the web sites mission to introduce them to your name. Unless your name qualifies as a strong brand do not, I repeat, do not waste valuable ad space with your name.

Guideline 7: Never, Never, Never mislead your searcher

Violate this guideline and the searcher will create pain in so many ways. Remember the click takes them to your site so if you do not quickly meet the expectation they will leave with a bad impression of your business. Remember that people tell others about bad experiences at a ratio of about 12:1. For every disappointed visitor they will on average tell 12 others. Actually in the internet it might actually be more because if that person is active in a social network they might tell thousands about a bad experience.

Guideline 8: Appeal to the instant gratification society

Ad copy that ties to the keyword and delivers on the intent of the searcher are always a home run. For that reason when you have a buying indicator in the keyword and you go after the fast attribute it normally works. People want what they want and they want it now. Promising and delivering speed can make a big difference in your ad performance and your business.

Guideline 9: Localize your Ad

People like doing business with locals so if you are local flaunt it. An ad headline of "SF Restaurant Reviews" will pull much better in San Francisco than more generic "Restaurant Reviews". The difficulty with this is you end up with a lot more ads and much tighter keyword groups. It's possible that the effect of localization is driven by the guideline 1 but we believe that going local is a special category and it includes using the campaign geo-targeting to really drive this home.

Guideline 10: The more primitive the emotion of the word the better the response

We are dealing with people and there is no doubt that the deeper the emotion that you tap the better your response. At the top of the emotion stack are food, shelter, and protection of children followed by things like getting rich, losing weight, or being beautiful. Not every product or service can tap a primitive emotion but if you can do it, because it works. Make sure that your web site delivers on your promise or this guideline will absolutely fail on the next stage.

Guideline 11: Use lower commitment words

This Guideline cuts both ways in that lower commitment words like "Free Information" will increase your CTR but they can also lower your conversion levels. This guideline depends on your business strategy for the traffic. If your objective is direct sales then avoid these words but if the objective is to start a multi-stage sales pipeline then by all means use them.

Summary

Ad copy is more art than science and you need to continue to test your copy continually. Ad copy can age and lose performance but make sure that you change ad copy because of performance not because you are tired of it. You will become bored with the old ads way before your prospects and they are the one you are writing for.

Ask not what position your ad is in but what position best serves your business

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"I want to come up first in Google"

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This statement echoes in my head because 90% of the time it's in the first few words of each phone call I get. This statement creates great conversations on the business, products, services, market areas, and other key elements of the marketing strategy. This helps us understand the businesses we are serving but it does not address the issue of search engine position.

I rarely address the "I want to be first" statement directly because it is fundamentally flawed and not in line with the real business objectives. Business people are by nature competitive they want to win and they want to be first. Being first serves our egos but it's not necessarily the best place for your business.

Position counts but you cannot get so focused on one attribute of the game that you lose focus on the big things. Advertising needs to feed your business in balance with the budget and your ability to serve new business. We have seen examples of too much new business where clients have had us throttle back to give operations a chance to catch their breath. In other cases we reduced the client's position bids because being first made the sales unprofitable. If it costs $100 to generate $50 in gross profit you do not want to do that too many times.

Golden Rule of Positioning #1: Position your ad as high as necessary but no higher

We like to look at this from a business objective standpoint, so we often ask clients how much is a new customer worth to your business? This is often a thought-provoking question that creates a great dialog. If the client decides that a sales lead is worth $100 then the process becomes one of finding the maximum number of leads that you can generate with a cost at or below that number and within budget. There is a relationship between the cost of the lead and the quantity of leads you can generate. In most situations the more leads you generate the high the cost per lead since you are getting into less qualified traffic with lower response rates or you are paying more to be in a higher position.

Another limiting factor in this game is the budget, and yes, everyone has one.

There come times in Adwords Management when the daily budget is regularly stopping ad delivery because there is more traffic than money. In these cases the last place you want to be is first because your marketing goals just changed. The goal in this case becomes getting the cheapest clicks possible resulting in the most visitor per dollar.

Like many business decisions position is a ying and yang challenge with position, click through rate (CTR), cost per click (CPC), and budget. The general rules are:

1. The lower the position the higher the CPC
2. The lower the position the higher the CTR
3. The more visitors the more business
4. The higher the CPC the fewer the visitors
5. The budget ends the game

The problem is that these statements are not 100% correct although they are generally true. Did you see how I talked out of both sides of my mouth at the same time? Higher position does not always create a higher CTR and a more visitors do not always create more business. What you have to do is find the right balance for your business and then consistently execute that strategy. A healthy web site has a good balance between its direct, referral, paid, and organic with a steady growth.

CTR vs. ROI, When Less Traffic Means More Money

A good Adwords campaign requires balance. CTR & ROI are 2 particularly difficult items to keep in harmony with each other. In the future we intend to examine more facets of this topic, but this article focuses on trimming traffic to increase profits.

Click Through Rates (CTR) are really important to any PPC campaign, but they don't mean anything if there is no Return On Investment (ROI). Sometimes when we take over an existing account we'll find ads with astronomical CTR's which is at first glance awesome, but the Cost Per Conversion is a little wonky. Seeing as companies market for the sake of making money, sometimes CTR needs to suffer to help you profit more.

When most people get started with PPC advertising it's usually all about traffic. They get excited to see their web site grow from 15 visits a day to 100 visits, and then 200 visits, and so forth. While they're getting all caught up in the number of visits the Return On Investment is being ignored.

So how do you tune down traffic and turn up sales?

PPC advertising is all about relevant traffic, not necessarily as much traffic as you can get. Look at your keywords, are some too broad? Are some related but too far of a stretch? Go into you analytics and check the bounce rates for some of these words, are they way above your sites average?

The first thing to consider is does the word buy you anything? If it sends you traffic of no value just pause it, you may want to revisit it sometime later but for now it's just a hole you throw money in. If the word is an important word for you but is sending good and bad traffic start looking for ways to limit the bad stuff. Think of possible negative keywords and run a Search Query Report for inspiration.

The other hidden offender is ad text. When you look at your ads are they too effective for their own good? At first that sounds ridiculous, but is your ad attracting traffic from a broader group than you were targeting? A lot of web surfers scan and only see the headline of an ad. Could your headline be applied to other unrelated searches? If it can consider adding a qualifying word to your headline to ensure people know what they're getting if they go to your page. For example if you sell training, use a word like "buy" so people don't click on your ad looking for free information. The word "buy" will reduce the CTR, but the conversion rate should remain the same or even increase because the visitor knows they are going to a site that sells training.

There is no definitive silver bullet, but these steps can help keep your ROI under control.