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Expected CTR and Conversion Rate
Imkor




msg:3495622
 6:22 pm on Nov 3, 2007 (gmt 0)

I am new to CPC search engines. What shuould be my target CTR and conversion rate? Also, using how many keywords?

Thanks.

 

Imkor




msg:3496854
 4:33 pm on Nov 5, 2007 (gmt 0)

Hello Guys,
Anyone can respond, please.
Thanks in advance.

LucidSW




msg:3498900
 6:20 pm on Nov 7, 2007 (gmt 0)

That is a loaded question with no fix answer.

There are so many other variables to take into account. My own initial target is a 5% CTR and go from there but revise it depending on circumstances. However, having managed many campaigns for others, there occasionally are things which you can't explain.

Example 1: a client of mine selling aquarium products is in first or second position for most keywords. But, the CTR is low in the 2-3% range and sometimes lower for some categories. Why when he is near or often at the top? I would expect the CTR to be near or easily breaking the 10% barrier in this case. Sometimes it just is and can't explain why people are not clicking on the ad. The first thing to look at is keywords, the next the ads (clickability). Obviously, there is something we have not yet figured out in that what they are searching for is not what the ad is offering. Negative keywords will help in weeding those out. Right now, the target is more like 2.5%. Tests by reducing the CPC to reduce the position and see how the CTR is affected are being conducted. Sometimes a lower position gives best results.

Example 2: another client decided to go and make his own ad (something I just hate when they do). I judge the client's ad very poor (not clickable). However, it does better by twice the CTR any of my ads, about 8% in sixth position. Can't figure out why. Again, one those things. I try to learn from it and testing new ads to try to better his CTR.

As for the conversion rate, I want a rate that will still yield a profit at the average cost per click the client is paying. This means testing not only different ads but different page copy. I normally stop a campaign if it can't bring at least a 1% conversion. Factors to take into consideration are the product and the competition. I have my own scale created based on Adwords' own Quality Score terms. It is not set in stone for every product but used as a general reference.

A conversion rate is considered Poor if it is under 1.25%. It is OK between 1.25 and 2%, Good between two and three percent and Great over three percent. I sometimes go even further by calling it Super if it is over five percent.

But a conversion rate can be considered Great if it is 1%, in a niche with lots of competitors, 500 daily visitors from clicks, an actual CPC of 10 cents on a product selling for $100 with an after-cost profit of $75 meaning a pure total daily profit of $325 after advertising costs on those five sales.

A lower CTR ad can be better than a higher one. It could have a much higher conversion rate than a higher CTR ad with a lower conversion. Which ad is best to use? Simply multiply the CTR and conversion rate. The ad with the higher number is the one giving the best returns, given everything else such as position and CPC are the same.

But it all means nothing if you can't make a profit.

Imkor




msg:3499835
 5:30 pm on Nov 8, 2007 (gmt 0)

Thanks LucidSW for the very useful info.

Imkor




msg:3499836
 5:32 pm on Nov 8, 2007 (gmt 0)

Here are some details about my account, any help please.

1- My average CTR is 2%, it is not too bad and I can see progress whith fine tunning.
2- The Converstion rate is bad, only 0.5%
3- Here comes the most important point, the ROI is not satisfactory.
My average order is only $30. My site design and products is acceptable (compared to big names). I may set a minimum order but my history shows that I will not have a good chance in that direction.
4- I only have 400 kerywords on my campagin. Mostly, set to 0.2 and 0.25.

What do you think by looking at these numbers?
I only had 3000 visitors so far, is it too early to judge?
Do I have a chance in CPC?

Thanks,

LucidSW




msg:3501030
 9:08 pm on Nov 9, 2007 (gmt 0)

> 1- My average CTR is 2%, it is not too bad and I can see progress whith fine tunning.

You seem to think that is OK. What is the average position?

> 2- The Converstion rate is bad, only 0.5%
> 3- the ROI is not satisfactory.

OK. So you need 200 visitors to make a sale on average. You make only $30. Right now, to make a profit, your actual CPC should be below 15 cents. Not much room to manoeuvre.

My guess is one or all three of these things:

1. Not very targeted keywords thus spending money on clicks from keywords you shouldn't be using.
2. Not a good ad or at least saying something in the ad but not on the page.
3. Not a good sales letter, at least, not as good as it should be.

> My site design and products is acceptable

The message is what will sell, not what the site design is or even the product. If you can pursuade the visitor that he absolutely needs your product, you have a good chance of making the sale. The more you convince them, the better chance of making that sale. The flashiest site in the world will not sell if the message is wrong.

> 4- I only have 400 kerywords on my campagin. Mostly, set to 0.2 and 0.25.

I don't know your niche but the number of keywords is irrelevant. Sometimes less is more. You need 400 very targeted keywords. Then again, maybe you only need 20.

CPC is irrelevant. CPC does not make the sale. You obviously, as I said above, are losing money.

> What do you think by looking at these numbers?

Nice numbers. Don't mean a thing as they are just numbers. I don't know your product, your site, or anything about your campaign.

> I only had 3000 visitors so far, is it too early to judge?

You should have applied analytics on your campaign long before 3000 visitors. I'd say you are very patient. Many people I know would have quit if there was no sales in the first 100.

In fact, I hope you have tried different ads and different sales letters. If not, I can tell you right now that the campaign is a failure. Time to try something else. You know the results you have with 3000 visitors. There is no reason to expect vastly different results for the next 3000.

Re-think your ads, your keywords and your sales letter.

> Do I have a chance in CPC?

You might. You've got to test more as I said a few times before. You've got to take steps to improve. Set a goal. Learn.

If it still doesn't work, then your product may just be one of those things that doesn't sell well online.

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