That is a loaded question with no fix answer.
There are so many other variables to take into account. My own initial target is a 5% CTR and go from there but revise it depending on circumstances. However, having managed many campaigns for others, there occasionally are things which you can’t explain.
That is a loaded question with no fix answer.
There are so many other variables to take into account. My own initial target is a 5% CTR and go from there but revise it depending on circumstances. However, having managed many campaigns for others, there occasionally are things which you can’t explain.
Example 1: a client of mine selling aquarium products is in first or second position for most keywords. But, the CTR is low in the 2-3% range and sometimes lower for some categories. Why when he is near or often at the top? I would expect the CTR to be near or easily breaking the 10% barrier in this case. Sometimes it just is and can’t explain why people are not clicking on the ad. The first thing to look at is keywords, the next the ads (clickability). Obviously, there is something we have not yet figured out in that what they are searching for is not what the ad is offering. Negative keywords will help in weeding those out. Right now, the target is more like 2.5%. Tests by reducing the CPC to reduce the position and see how the CTR is affected are being conducted. Sometimes a lower position gives best results.
Example 2: another client decided to go and make his own ad (something I just hate when they do). I judge the client’s ad very poor (not clickable). However, it does better by twice the CTR any of my ads, about 8% in sixth position. Can’t figure out why. Again, one those things. I try to learn from it and testing new ads to try to better his CTR.
As for the conversion rate, I want a rate that will still yield a profit at the average cost per click the client is paying. This means testing not only different ads but different page copy. I normally stop a campaign if it can’t bring at least a 1% conversion. Factors to take into consideration are the product and the competition. I have my own scale created based on Adwords’ own Quality Score terms. It is not set in stone for every product but used as a general reference.
A conversion rate is considered Poor if it is under 1.25%. It is OK between 1.25 and 2%, Good between two and three percent and Great over three percent. I sometimes go even further by calling it Super if it is over five percent.
But a conversion rate can be considered Great if it is 1%, in a niche with lots of competitors, 500 daily visitors from clicks, an actual CPC of 10 cents on a product selling for $100 with an after-cost profit of $75 meaning a pure total daily profit of $325 after advertising costs on those five sales.
A lower CTR ad can be better than a higher one. It could have a much higher conversion rate than a higher CTR ad with a lower conversion. Which ad is best to use? Simply multiply the CTR and conversion rate. The ad with the higher number is the one giving the best returns, given everything else such as position and CPC are the same.
But it all means nothing if you can’t make a profit.