What’s a Good Click-Through Rate?

And 5 factors that can help you get users’ attention

Hand clicking mouse The question “What’s a good click-through rate?” is a little bit like asking “What’s your favorite movie?”, in that it really comes down to personal preference. Just as some people might lean toward “The Godfather,” as their fave flick, others might prefer something a little more low-brow, say “Pee-wee’s Big Adventure.”

The same is true for click-through rates on your Sponsored Search ads: The highest possible click-through rate may work for some—but it doesn’t work for all. That’s why the honest answer to the question is, “It depends.”

Click-through rates are naturally going to vary from campaign to campaign, and even from keyword to keyword. Everything involved in the way your ad is displayed plays a part, from your ad copy to the ad’s ranking on the results page.

This being the case, your click-through rate should really be viewed as only one indicator of your ad’s performance. It’s best to try and balance your evaluation of those rates with a just-as-critical look at your conversion rates (number of clicks converting into sales or other actions you want people to take). While it might be easy to generate a bump in your clicks, you also want those extra clicks convert into sales.

An ideal click-through rate provides the best possible return on investment, and to achieve that, it’s important to consider these factors:

1. Competition

Are your keywords fighting for clicks? Generic keywords, such as “dvd,” tend to have a lot of competition, which lessens the chance of getting clicks. More specific keywords, such as “transformers dvd,” generally have less competition and a greater chance for clicks.

2. Position

An ad with a high ranking may generate more traffic to your web site. To help attain a good position in search results, keep your bids competitive and your ad quality high.

3. Ad Quality

Are your ads relevant? Do they contain the related keywords? Do they reflect the offering of your site in a way that will appeal to users? And do they include any competitive advantages you offer that might set you apart from your competitors?

4. Ad Testing

Create multiple versions of your ads and use ad testing to determine which ad works best. Vary your ad offerings, as well as your display URLs, to see what gets the best results.

5. Identifying Low-Performing Keywords

Compare the click-through rate of similar keywords, to see if any are significantly underperforming in relation to the others. If so, consider moving those low-performing keywords to a different ad group and creating new, highly relevant ads for those keywords.

There really is no hard and fast rule as to how high a click-through rate should be. But if your ads are compelling and your click-through and conversion rates are well balanced, you’re off to a great start.

– Noah Belson, Content Quality Analyst

Photo courtesy of Flickr user OK-59

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34 Comments Add your own

1. d | August 14th, 2008 at 12:22 pm

Spoken like a true search engine

Short tails 1-3%
Long tails 8-15%
2. Osamu | August 14th, 2008 at 12:23 pm

Good article. Always need to find the right balance between CTR and conversions.
3. Chris Hubbard | August 14th, 2008 at 12:36 pm

Good Answer Noah

I have to run through that explanation with my clients quite often.

It is not clicks that are important, but conversions. I would rather have a 1% click through rate and a 50% conversion rate that a 10% click through rate and a 5% conversion. All I have done their is increase my cost per conversion.

It is important to find those keywords that have a high click through and low conversions, quite often when I evaluate a new clients existing campaign, I found a significant amount of their budget is being wasted on this words. Just moving money from this poor converters to high converters will usually produce a good sales increase and make me look great.
4. Todd | August 14th, 2008 at 12:40 pm

zzzzzzz…come on give us the meat, this is like PPC 101
5. John | August 14th, 2008 at 12:43 pm

I am a new advertiser and am still struggling to trust that I am not paying for automatically generated, and therefore valueless, click-throughs. I realise that this is not likely to happen where my ad appears alongside Yahoo search results but I am deeply suspicious of some of the websites out there who participate in the program and where my ads might appear on the Content Network. This is the reason why I switched from advertising with Google. My ads were appearing on websites that were nothing but link-farms. Who would ever visit such websites? They have no content whatsoever, only advertising links. What legitimate user would ever go to such websites and what legitimate user would ever click on an ad on such a website. I want reassurance that my ads will never appear on such websites. It’s all about trust.
6. Bob | August 14th, 2008 at 12:58 pm

John you need to learn about managing the content network because its on BOTH services. Changing from Google to Yahoo to avoid the content network is not the solution because they both have content networks. If content does not work for your business then turn that off.

I also agree with Todd zzzzzz…..
7. John | August 14th, 2008 at 1:04 pm

Thanks for your courteous response Bob.
I certainly realise that there is lots to learn. My complaints to Google were brushed off. I switched off the Content Network and my click-throughs dropped from 125 a day to 3 a day. Does that say something?
8. Fiderious | August 14th, 2008 at 1:06 pm

John…You are correct to worry about click fraud because it truly does happen quite frequently. The industry average across the major 3 (Google, Yahoo, & MSN) is around 16%. To combat click fraud on Google and Yahoo there are a few companies out there that specialize in identifying fraudulent clicks. For example “Click Forensics” does just that and they are a partner of Yahoo; meaning Yahoo will accept there report and refund your money for clicks identified as fraud. However, this service takes some tech knowledge to set up and it will cost you $500 per month. Also, Google does accept portions of the report and will issue refunds for certain cases.
9. Otis Jones | August 14th, 2008 at 1:09 pm

I understand that there is no such thing as a “good” click rate. However, statistically, I would appreciate a look at your “bell curve” of clicks v. Conversion or Impressions v. Clicks for either an entire Yahoo year or by market sector.
That would give me some median perspective as to where I stand in the universe.
10. Fiderious | August 14th, 2008 at 1:10 pm

Bob is correct; the content network is more difficult to manage. Our CPA is over 100% higher on the content network, but we do generate a great deal of conversions. You simply may need to lower your content bid or (on Google) specify the sites you want your ad to run on.
11. Fiderious | August 14th, 2008 at 1:12 pm

Otis…We would all love to see what you are proposing in an industry specific format. Any other format would mean nothing to everyone.
12. Tim | August 14th, 2008 at 1:20 pm

Its all about conversion rates, not click-through rates (unless your objective is generating brand awareness). Ad copy that targets a specific market segment will often have receive CTR less than 1% and that’s perfectly fine. The exception of course is that the search engines penalize you for having having low CTRs by lowering your quality scores…which increases your min CPCs. That’s the trade off you need to quantify.
13. JS | August 14th, 2008 at 1:30 pm

John,
No need to struggle. I have been doing this for years and have come to the conclusion that roughly 10% of the Clicks I pay for never actually even see my site. I have run exhaustive research on this and it happens everywhere. Cross check your total clicks and total hits and they will always err in favor of the clicks. You’re not paranoid, but if you want to play the game you have to pay the kickback
14. John | August 14th, 2008 at 1:36 pm

Thank you.
Appreciate the wisdom.
15. Joe | August 14th, 2008 at 2:09 pm

I always take advantage of putting keywords in my display URL. I’m very surprised I don’t see many taking advantage of this.
16. TradeFedPhil | August 14th, 2008 at 2:19 pm

I do not think this article was not intended for seasoned online advertisers.
John: Use your direct stat programs/analytics to vetter watch overall traffic. Try to subsidize your sponsored search engine traffic through creating custom content on your direct sites. Place your customers alonside your original content. see http://www.tradefederation.tv for an example
17. Michael Schmidt | August 14th, 2008 at 4:51 pm

I love that their “blog” offers information that is no more useful than what you get on their FAQ page. Google and Yahoo are fighting for big bucks on the click ad front, and their strategies look like they are coming from small “we’re about to wither and die” companies. Pathetic.
18. Nancy Houtz | August 14th, 2008 at 5:05 pm

Agree with Michael–both Yahoo and Google are out to make money and we advertisers must learn to be quite careful about bids, ads, and placement. I am very concerned with both of their focus on minimum bid requirements. Supposedly these are for irrelevant keywords; not always true. I’ve seen them both use this to edge up perfectly reasonable minimum bids, producing well for me and the end result is they get more money! But, it is the reality — they have the search engine we are allowed to make use of to make money for ourselves or our clients!
19. The Unit | August 14th, 2008 at 7:14 pm

I hardly ever go after the high traffic keywords because you are usually throwing money away. More specific keywords such as “austin air purifiers” opposed to just “air purifiers” works much better and conversions are higher.
20. Outer Space Ringtones | August 15th, 2008 at 1:42 am

Thanks 4 the article. An example of the good attitude Yahoo has towards its customers.
21. Chris | August 15th, 2008 at 3:50 am

Take a critical look at CTR’s among your keywords to identify losers. Relevance is the key. If the CTR is low, the keyword may not be highly relevant or sufficiently precise. For such keywords, simply stop bidding on them.

However, you must take action when a highly relevant keyword incurs a low click through rate, because it’s an early warning sign that your quality scores may be on the skids.

Our benchmark for CTR: 5% for an ad group - Yahoo loves you like chocolate.
22. Christine | August 15th, 2008 at 8:42 am

Time to change some unproductive keywords! Thanks for the reminder!
23. Terry Leeders | August 15th, 2008 at 4:21 pm

A targeted ad also comes in handy based on purchaser’s location, such as ‘chicago bankrutpcy attorney’ which is one of my key terms
24. Frank | August 15th, 2008 at 8:29 pm

I really don’t like deceptive advertizing. Bait and switch is illegal in this country. If your going to ask a question, then have the guts to give the answer. Everyone would love to know what the industry averages are for what positions. You know that, and thats why you list the question. Why not have the guts to answer the question everyone wants you to answer? You have all the stats, it’s simple to do. You even grade the adds on this info. What are you afraid of? Yes other things are important, it’s ok to write about them. I’d be just as upset if you asked the question “What’s more important than click thru rates” then just listed what click thru rate percents typically were. Get the point??!!! Just be honest, it’s a great way to be.
25. Sethu | August 16th, 2008 at 1:06 am

Ours is a Management and E-Business consulting and advisory services firm that were looking to increase the no. of participants registering for our public training workshops. We use keyword advertising on both Google and Yahoo.

Based on an assessment of our click thru, some of the tactics we have adopted to improve CTR are:

1. Placed advertisements targeted at particular demography and geography relevant to our services

2. Limited the date/time window for the ad. display (weekdays/weekends/time slot during the day etc.,)

3. Went for “Placement” based content partner advertising instead of what google offers. Yahoo doesnt seem to offer placement based advt. as yet. This also helped us to optimize our web marketing strategy as we now know which placements give better results and we have dropped the unwanted ones

4. Used some innovative ideas based on understanding of customer segments. For eg., we sell Six Sigma training services. We noticed that many professionals who plan to migrate (or) taking up international assignments look to pick up additional skills before leaving the country. They typically search using words like Immigration, Visa, Work permit etc., We included these as some of the key words and found both click thru and conversions as well, increase significantly.

5. We added image (banner) ad variant in google and found it had better click thrus than text. (A picture is worth a 1000 words!!). Yahoo does not offer image ad options till now.

6. We used a free analysis facility available at MSN (http://adlab.msn.com/Keyword-Group-Detection/Default.aspx) where you can find out how many people searched a particular key word. You can also find which other key words they associate with a root/main key word. When we included appropriate associated keywords and also the largest searched ey words for our service area, the CTR rate showed a marked improvement as well. You may find it useful too.

7. From a marketing perspective, you need to decide on the optimal blend of reaching out to prospective customers through keywords, direct text/banner advertising (in a particular portal/website of relevance to your business), networking (physical world and forums/communities), local chapters/membership groups, blogs/communities among other modes.

Hope some of this insight helps!!

Cheers

Sethu
26. Game Accessories & Downloads | August 17th, 2008 at 12:00 am

Keep your keywords to a minimum for each campaign, be very precise. If possible and it should be use your keywords in your ad and display url. Focus on search and not content if your just starting. Constant monitoring is huge and under used. Good Luck All.
27. hemoroizi | August 17th, 2008 at 5:58 am

i was doing few weeks ago PPC using ASK and their statistics looks more interesting than
in the past but despite their improved stats
i was kinda dissapointed of the traffic quality from their search.
So i suspended their service for a while…
28. Russ | August 19th, 2008 at 12:56 pm

#1 - Measure Conversions, because without sales, it is all meaningless.

#2 - Measure CTR - And this usually means having a great ad in a great position (usually 1 - 3)

Having a high CTR usually means a good quality score.
29. JR | August 21st, 2008 at 5:09 am

All very interesting. and for the small businesses, services, organizations looking to provide information, not direct sales.. not very useful..

i suggest the best click through rate.. is the best you can achieve using your time and budget. If Yahoo would publish the ranges for categories, it certainly would help.

If you are in the direct sales business the best conversion rate is actually the one that generates the loyal consumer with a long string of purchases, not the immediate sale. in short its allabout the data base. Unfortunately for the average small business? the time involved in the exercise is simply not affordable.
30. Acai Berry | December 16th, 2008 at 1:13 pm

A very boring post, probably copied and pasted out of the search marketing faq. You guys can do better!
31. Ed Steinberg | January 12th, 2009 at 5:10 pm

I’m disappointed to see the old shibboleth “An ideal click-through rate provides the best possible return on investment…” repeated here.

In fact, the ideal CTR is that which provides the greatest total return. Just ask yourself the question:

Which is preferable:
1. An investment of $100 which returns $200 (ROI=100%) or,
2. An investment of $200 which returns $350 (ROI=75%)?

The fallacy in touting the ROI lies in the fact that the tacit assumption is made that your investment does not significantly affect the market and that the ROI will remain relatively constant for any size investment. In general, even George Soros does not affect the ROI for Treasury bills.

However, the assumption fails for situations where your investment does affect the market. Auctions and PPC fall in this category.

Interestingly enough is the fact that the correct interpretation works to the benefit of Overture as it encourages a larger spend.
32. Henrik | January 22nd, 2009 at 3:42 pm

Conversion should cover the costs, i mean total costs. Clicks are not the only thing that you pay for. Example: if you pay for band with a large amount of clicks can kill you.
33. David Pol | January 22nd, 2009 at 10:25 pm

I find it really impossible to gauge conversions, since many of our sales are done by salespeople, so the conversions for any particular keyword cannot be measured. Any ideas?

Also, does the CTR for any ad group matter to your quality score (move away weak keywords in the same group) or is it simply measured by individual keyword?
34. Robert | January 25th, 2009 at 9:16 am

For those with limited time, let me summarize this article — Clickthrough depends on competition, ad content and position, and keywords. So test your ads. Zzzzzz.