is it true that High CTR = High CPC rate? Also is it a good idea to include content network when advertising? or should I just rely on the search?
I think it works as High CTR = lower CPC from what ive read, and down to impressions and many other factors too.
Hi bmw335isedan, Here is what I can tell you from my own experience... The equation seems to be a little more complicated. In my experience a higher CTR will generally result in a lower CPC... but only when you are receiving a high CTR because the ad is relevant to the market. Let me explain what I mean. If I am willing to pay $10 per click then my CTR will probably be higher because I am out bidding the rest of the competition. In this case higher CTR = Higher CPC. This is not the situation that I want to be in. However, if I create an ad that is highly relevant to my target market... one that my prospect sees and just has to click to what I have to offer. Maybe my ad isn't even in top position. Maybe it is in #6, but it so compelling they click it any way. In this case a higher CTR will not cost you any more CPC. In fact, will result in a lower CPC over time as the Adwords system determines your ad is very relevant to the related search term and increases your quality score. This IS the situation I want to be in: higher ranking, higher CTR, and LOWER CPC. I would probably include content, but keep a close eye on it. It is possible to waste a lot of money here. In my experience (and this only what I have found over time) the content network is a lower quality lead and you should not be paying as high of a CPC for content as you do for search. Here is a small tip: separate content and search into different campaigns. Why? Two reasons: (1) I have found that leads coming from content are generally not as qualified as search and therefore do not demand as high of a CPC and (2) content usually has a lower CTR and I do not want that affect either my statistics or my quality score for the search campaigns. When I am tracking something with the intent of using the data to make bidding and keyword decisions I try to isolate as many variables as possible. I will also throw in another little thing I have learned: keep your content adgroups very small... twenty keywords or less... and very tightly related. This will help with your relevancy and make sure your content ads are showing on sites that are closely related to your niche. good luck!
There is no direct link between CTR and CPC - there are too many other variables involved - and it is too simplistic to say "higher CTR lowers your cost per click". If your ads perform much better than Google anticipates for the position they are appearing in then your QS will increase. Now, if your CPC is lower than your current bid then, depending on the bids of the adverts above you, this might move your ad up in the rankings at which point your CPC will INCREASE. If you do not move up in the rankings then, depending on the bid of the advert below you, your CPC might decrease. At its most simplistic, your ad's position is determined by its ranking score that is calculated by QS x BID. e.g. Keyword A, QS=8, Bid=8 cents, Rank= 8 x 8 = 64, CPC = 8 cents Keyword B, QS=7, Bid=9 cents, Rank= 7 x 9 = 63, CPC = 8 cents (what is required to beat C) Keyword C, QS=7, Bid=7 cents, Rank= 7 x 7 = 49, CPC = 7 cents but if Keyword B has higher than expected CTR and improves QS to 8, then Rank = 8 x 9 = 72 which moves it ahead of keyword A but CPC is now 9 cents. But, let us say B is happy in 2nd place and does not want to pay 9c, so B reduces the bid to 7c, then Rank = 8 x 7 = 56. B is still in position 2 but now only paying 7c per click. Since when? As far as I am aware CTR is still a factor in QS they just measure the CTR performance differently now.
CTR is still a critical input in the Quality Score. As Bjewelled says, a better Quality Score doesn't mean your cost per click will fall - your cost per click for a given position will fall. If your Quality Score improves, but not enough to push your advert up a position (or you're first), your cost per click will fall. But if your advert moves up, then your cost per click could increase or decrease. If you don't want it to increase, adjust your bid accordingly...
Well, as I understand it was removed from QS: http://adwords.blogspot.com/2008/11/update-on-improvements-to-ads-quality.html "We also wanted to emphasize that AdWords has always accounted for the influence of ad position on CTR and removed it from the Quality Score. This specific improvement updates this system to make it fresher and more accurate."
What they "removed" was the influence of an advert's position on its CTR. They have not removed CTR from the QS calculation. Where an ad appears heavily influences the number of clicks it attracts. For example on page 1 the expected CTR may be something like (numbers just for example and not actual returns), Pos.1 = 50% Pos.2 = 20% Pos.3 = 10% Pos.4 = 5% etc. Google allows for this in the calculation (It is what they called "normalized for position") such that if you get the expected CTR for whichever position you appear in it makes no difference to your QS but if you do significantly better or worse it will increase or decrease the QS respectively. The "specific improvement" was to begin using the actual historical data for the expected CTR rather than the rather dubious system they previously employed (showing the ads in different positions to a selected audience and measuring the reaction.)