You will have some good performing keywords in Google Adwords and maybe a whole lot of poorly performing ones too. You have to regularly weed out the poorly performing keywords or increase their performance to stay on top of your marketing efforts. Click-through Rate (CTR) is considered as one of many factors that affect the performance of the keyword, that means it is also one of the stats you can use to analyze the keyword performance.
Before anything else, understand that CTR is just one of the measures that should be used as a keyword performance indicator. Just because your CTR is low does not necessarily mean that the keyword is not worth keeping around. There are several other factors like the Quality Score, CPM, conversion rate, and revenue per click that need to be considered to get a true sense of the keyword performance and before discarding the keyword.
First, there are some advantages in keeping an above average click-through rate for your keywords.
Lower CPC: A good and above average CTR gives you an advantage in the bidding process and keeps your cost down. A high click-through rate compared to other bidders’ will allow you to get a lower price on your bid.
Ad Quality: An above average CTR shows that the ad is highly relevant and co-related to the keyword. The ad might be worth keeping even if you discard the keyword. And you can use the same ad for similar or other keywords.
So, what is a good Click-through Rate? The short answer is It depends. It mostly depends on your expectations from the keyword.
If the keyword is a highly competitive and a high CPC and you do not have a high enough budget, then your expectation of the keyword should be low. On the other hand, if the keyword is not so competitive then you could have a higher expectation of performing well for it. Also, you should get high click-through rate (CTR) from the very most relevant keywords for what you are advertising for.
What’s a good CTR, depends on your marketing needs and efforts. It eventually depends on your total budget and the individual bids for each of your keywords.
A very commonly accepted value for a good CTR is around 2%, according to various sources. In my own experience, it is more around 3% or so. Remember that this is across all niches, each of the specialized categories or niches may vary accordingly.
The CTR of the keywords is dependent on some key factors
Ad position : This is the position of the ad for the keyword in the search result page. The lower the position the less likely you are to get a high CTR.
Ad Quality : Quality of your ad and its relevancy to the keyword that the user searched for is also very important. The ads are just that, it should be appealing to the user and entice them to click on it.
Before, you decide if the Click-through rate for the keyword is low and start working on it, there are a couple of things you need to take into account.
Impression Count: Give the keyword enough time to garner impressions. You cannot trust a CTR for a keyword which hasn’t had enough impressions. Not having enough sample size will distort the CTR stat, so give time for the keyword to get at least a 1000 impressions.
Conversion Rate Or Revenue Earned: This might be more relevant to a retail website or if you are selling any products directly to the user. If the keyword has a low CTR but a high revenue or conversion rate then it could be well worth to maintain the keyword.
Content Network : Always differentiate the click-through rate between the content network and the click-through rate in search results. The CTR for content network is notoriously low so it is even good to safely ignore them. Follow the CTR in the search result pages to get a better idea about the relevancy of your keyword.
Keyword Competition : If the keyword you are bidding for has a very high CPC or is highly competitive, then you might have a low CTR because you have a low Ad position. If you do not want to increase your bid amount to get a higher ad position, then a lower CTR might be acceptable.
Another reason for a low CTR, might be the Ad itself. It might not have anything to do with the keyword, CPC or your bid amount. Your Ad may not be worded correctly or appealing enough to get the clicks. Try another Ad or re-working the ad itself.