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What I mean is, if an ad has a click-thru rate of 4% and another has a click-thru rate of 1%, does it mean you will get MORE sales from the former or does it just mean MORE people clicked (without being able to make any prediction on conversion to sales quality?)
Conversions will depend very much on what it is you are offering, the price, who you are competing with and really the click is dependant upon the compelling ad you create and is nothing to do with your site and the offer.
What I can say though is that if you get the ad startegy right and deter the tire kickers from clicking then you will find the ads clicks/sales is better, but just based on the percentage I don't see it.
What they effectively do is reward you for running a popular ad by reducing the amount you pay because they believe (and so do the clickers) that your ad is more important and relevant than those of your competitors.
But..... in order to get to that stage you will more often than not have to sift the keywords and remove the ones that have a lot of impressions and put them in an ad group all on their own, maybe with different messages to try to get the CTR up on that one.
An ads CTR will be as strong or as weak as you allow it to be. We have several ads running with a CTR over 20% which require little maintenance now, but it was difficult to get the mix right to start with. Perserverence will pay dividends.
Ad position is determined in part by CTR and in part by your maximum bid. Relevance improves your campaign's economics, all things being equal.
However you can make NO blanket assumptions about conversion rates or ROI from higher or lower CTR's. Post-click behavior varies too much.
CTR's can be goosed with free offers, enticing copy, etc. Similarly, CTR's may go down when you prequalify prospects with your copy (making sure people know it's a fairly sophisticated or expensive product, for example).
I would pursue high CTR, but not at the expense of ROI, i.e. if there is a way of writing your ads to weed out non-buyers, you should probably do so in spite of the likely drop in CTR. It's a judgment call, really.
If you want to amass a large number of leads no matter what, you might for example want to attract them with a free white paper and then continue to try to sell them on something later. But is it worth paying (again f'rinstance) $1.60 a click which converts to a lead 5% of the time for a total cost per lead of $32? Only you know for sure.
High CTR's are not the holy grail. It's nice that Google rewards them, though. It means advertisers don't have as much incentive to blanket the space with low-CTR ads for branding purposes, and it makes the marketplace more open to the small, focused advertiser.