I've fairly new to Adwords, but something I've started playing with is the relationship between CTR and actual conversions. For example, let's say my CTR is around 8%...if I rewrite ad copy and mention the product price up front, the CTR can be expected to fall. How much is OK? 6%? 4%? 2%? At some point I'm assuming the low CTR will become counterproductive and start costing me. Any tips on how to determine how much CTR is worth sacrificing for better conversion ratios?
Personally, I'd suggest that you match the CTR to your budget. I find that conversions are not directly proportional to CTR, so for instance if I do a wonderful pre-screening job on my ad to stop all the tyre-kickers clicking and get a CTR of 1%, I'll get a better conversion rate than I get with a regular ad that might say, get a 2% CTR because the traffic will be more targeted, but it won't be anywhere near double the conversions. The consequence of that statement is that the higher your CTR, the less money you make. Your ROI will probably be better, but overall your profit will be less. That's why I suggested that you match the CTR to your budget; if you've got deep pockets then use regular ads and maximize your profits (whilst reducing your ROI), but if you're on a budget then pre-screen your clicks with the price in your ads etc, and you'll make less money overall, but your ROI will be higher, and your spend will be less. Myself, I purposely don't pre-screen in my ads because I want to make as much profit as possible, so I tend to average about 2% CTR (very competitive market), but I generate a LOT of clicks. As far as I know, you'll only run into problems with Google refusing to serve your ads if you go below 0.5% CTR, but there are other factors such as landing page relevancy that can change that threshold. Hope this helps! Dan
CTR should only matter in the context of your advertising budget. It depends if you want to maximise your profit per dollar spent or if you want to grab as much of the market as possible. You could sell 10 products but only make $10, or you could sell 5 products and make $15 after expenses (or even only make $7 etc.) Ask yourself if you're going to be getting return customers, if so, then the mass conversion strategy would be more suited. It's a very tough balancing act that'll take you a long long time to learn and figure out. If higher CTR yields you a higher PPD (profit per dollar), then go for it! If higher CTR means you have a higher advertising spend, then bottom scraping may be better suited for that particular game.
Thanks for the advice, guys. I can see there's no easy answer on this one. Since I have a shoestring budget at this point, I'll keep aiming for the higher CTR at this point...and gradually test more upfront-with-cost ads to see what the collateral damage to CTR will be.
Understanding your on a tight budget... still you can convert well if done correctly. Ads should be very specific copy wise to NOT induce clicks .... additionaly, you should create a specific landing page to the keyword. Less clicks (a decrease in CTR) can improve your conversion huge if those who click are further pre-qualified traffic. That's what we do for our PPC clients... and they are all very, very happy with the results. You'd be amazed how many keywords you can garner for less than .05 that are obliquely related to your product or what you "thought" were the keywords for your product.
Any tips on how to generate these overlooked keywords? Or is it mostly creative thinking and customer "psychology?"