Tips on Using CTR for Queries with Low Click Volume
I have I quick question regarding keyword research. I am currently working on setting up our process for identifying either successful or under-performing keywords in Bing. Most keywords won't see enough conversion/clicks to reach any kind of statistical so it certainly seems to be the case that click-through rate will mostly be what we monitor (at least for right now). So, in determining how to evaluate keywords by click-through rate, I was curious about how we can/should set a baseline. Specifically, when we are assessing broad match keywords, we should (in many cases) get enough impressions to easily test for differences, but I'm not quite sure what would be a sensible baseline CTR to test against. I was thinking maybe a 1% CTR would be a good level for our evaluations (testing each keyword for a significant difference above/below that), but our past data has been really inconsistent and recent campaigns we set up have seen many, if not most, CTRs in the tenths of a percent. So, I guess that is where I wanted to get your input/advice. From what you have seen, is there a standard you would recommend for separating high/low CTRs? Does it depend on the business, and if so, should I maybe just sort CTR performance into percentiles (identifying, say, the top and bottom 10% in CTR in each campaign/ad group)? Just curious to get your thoughts. Any guidance you can give would be awesome.
Unless there's huge volume, and otherwise great performance, CTRs under 1% are usually pretty weak. If I'm sifting my keywords, I will carefully consider anything under 0.5%, and see if I can guess why it's a miss. Maybe there's a tangential broad match that is hitting a different search intent? Worst case, I just exact-match negate it, but I'll usually try to figure out the behavior, and set up new filters for it.
Overall, you can get a sense of how keywords are doing by looking at the distribution within the account. You can search out under performers by filtering to keywords with at least a few hundred impressions, but few or no clicks (or, low CTR, obviously--same game). Take for example an account I've worked on recently, there are only 42 keywords in this AdWords account with over 1000 impressions, and a CTR of less than 1%. Those keywords generated $2327.46 in costs over $5165.77 in revenue. The COS of 45% would be tolerable within the account's goals. Filter that to CTRs of 0.75% or lower, and that trims off all but $571.02 of the cost, but also all but $764.95 of the revenue--and the COS becomes about 75%! As that's higher than the Gross Margin of the product line in this account, the account would have been more profitable during that period if this group of keywords hadn't existed.
There is one other major factor to consider, though. CTR is a function of two variables: keyword relevance, and ad copy. If the ad text is poor, it'll drive down the CTR of even the most brilliantly targeted keywords. If all of the keywords in an Ad Group are exhibiting the same weak performance, but the relevance and behavior seem right, then it might be worth running a test of a new Ad.
Thanks for the question and as always feel free to let me know how I can help.
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