28 Jul 2011

Relative CTR

July 28, 2011PPC Advertising

Relative CTR is a valuable number that can show users how their ads are stacking up compared to their competitors ads appearing on the exact same websites. Of course, it is more than an ego maker or breaker, it provides valuable insight to users who are looking to improve their ad’s performance, or tweak their advertising message, on the Google Display Network (or GDN).

For example, if your ad has a CTR of .06 and another ad on the same site is exhibiting a CTR of .02, then your ad has a higher Relative CTR, three times that of your competitor’s (CTR of .06 / CTR of .02 = 3x). Relative CTR puts into perspective just how well your advertising message is faring overall on the GDN.

Knowing that your ads are performing and receiving responses at a higher or lower rate than other ads can help users determine if their creative approach is working. If an ad has a high Relative CTR, then it’s likely that the ad is making appearances on the appropriate sites. This higher rate implies that the advertising message is relevant to the content on the page, and that the audience is responding to that call to action accordingly. On the other hand, if the Relative CTR is ringing in lower than comparable ads, it might be time for that user to rework their creatives and messaging.

A low Relative CTR can mean a number of things. The ad might not be appearing on relevant sites, meaning that this message is being broadcasted to the wrong audience. It is also possible that the message itself is confusing, or there is no real incentive for the potential customer to click through. Whatever the reason, the message is clearly not registering with the audience, and the AdWords user should consider taking a different approach in order to reach the right people.

Fortunately there are several tactics an advertiser can try to increase their Relative CTR. The initial step is seeing where you stand. You can learn the Relative CTR by visiting the “Ad groups” tab within your AdWords Account. From the “Ad groups” tab choose “Customize Columns” from the “Columns” menu, and then click “Relative CTR” to see your number and how you compare to competitors.

Low Relative CTR has many disadvantages, so it is extremely important to monitor that number and try to improve it. Besides generating low interest among potential customers, low Relative CTR results in poorer Quality Scores. In turn, those lousy Quality Scores affect the ad’s rank in auction settings, which ultimately raises the CPC.

To improve low relative CTR, examine the ads on the same sites that have higher scores. Chances are those users are doing something right. Take notes from those ads to create ads that are relevant, eye catching and provide incentive for the average person browsing the site. Do that, and you’re steps closer to achieving a high Relative CTR.