Click-through rate (CTR) is a fundamental metric of PPC marketing.
Calculated as the percentage of people who click on an ad after viewing it, CTR is often treated as a key performance indicator (KPI), demanding disproportionate attention and optimization efforts.
Google search interest in the topic of CTR far exceeds that of conversion rate (CVR), even though conversions align more directly with the health and success of a business.
This hyper-focus on CTR stems in large part from outdated reasoning that deserves a closer look.
Reason 1: A high CTR indicates an effective and relevant ad
Since the launch of AdWords, Google has been exalted clickthrough rate as a measure of relevanceexplaining:
“A high CTR is a good indication that users find your ads and listings useful and relevant.”
But the changes that Google Ads has made over the years have decoupled CTR from relevance.
The quality of prints decreases as the quantity increases
Early on, advertisers had much more control over who saw (and didn’t see) their ad, meaning they could target ads to their ideal market while preventing everyone else from seeing an ad impression.
Google Ads has made several changes that have led to an increase in impressions from non-targeted audiences:
Extended location targeting
Targeting a location no longer means you’re targeting people who are actually in a location. For location-based businesses, this irrelevant traffic skews CTR data.
A high CTR ad for “New York Photography” targeting New York is now reaching people across the country who are “interested in” New York. The specific title “NYC Photography” underperforms in California and Texas. A broader title “Photography Packages” gets more clicks. The ad with the highest CTR is the one that is actually the least relevant to the studio’s target audience and offers.
Extended match type definition
Google Ads has expanded its approach to match types, affecting how well a user’s search should align with an ad’s keywords. This expansion causes ads to appear for less relevant or related search queries, distorting the true effectiveness of CTR as a performance metric.
The exact keyword [luxury spa treatments] Now you could match searches for “cheap spa days” or “home spa ideas”. Again, the most relevant title is unlikely to have the highest CTR when the search terms are not aligned with the keyword.
Limited search term data
Google Ads’ reduction in search term data transparency marks a significant shift from the past, where advertisers had more complete access to the actual queries that triggered their ads.
This change prevents advertisers from identifying and completely denying irrelevant or low-intent queries, increasing irrelevant clicks and impressions, and introducing lurking variables that affect metrics like CTR.
The prominence of advertisements increases
Advertisers used to have to fight to earn the click, but now it’s harder to qualify the click.
Expanded real estate
When CTR was introduced as a measure of ad relevance, Google ads were limited to only the right lane, with only 95 characters of text.
Today, Responsive Search Ads (RSA) have tripled to 270 characters. With the removal of the right rail, competing organic links are now pushed further down the SERP instead of appearing together.
By including images, sitelinks, and other assets, both branded and unbranded ads can now take up all of the “above the fold” real estate on the SERP.
When 100% of the SERP is a single ad, it’s almost more of a challenge not to win the click.
The role of RSAs
RSAs are designed to match search queries. Google describe this process:
“The more titles and descriptions you enter, the more opportunities Google Ads has to serve ads that more closely match your potential customers’ search queries, which can improve the performance of your ads.”
This approach focuses on aligning with the search query rather than accurately representing your company’s products and services.
When there’s a discrepancy between the query and your offer, the ad reflects what the user wants, which can lead to additional clicks that don’t lead to sales.
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Reason 2: Increasing CTR improves ad ranking and lowers advertising costs
Google promote CTR as a consideration in ad rankingwhich determines the position of your ad and the cost you pay per click:
“CTR also contributes to your keyword’s expected CTR, which is a component of your ad rank.”
This raises two questions: What is the correlation between actual CTR and click costs, and is it worth squeezing the juice to reduce costs by increasing CTR?
Your actual CTR is not part of the ad ranking equation
When evaluating CTR as an ad quality factor, Google doesn’t use your actual click-through rate (total clicks ÷ total impressions). Instead, use your “Expected CTR,” which only considers “historical impressions for exact searches for your keyword.”
The fact that only exact searches enter this calculation is key. It means that your ad’s performance against bloated and irrelevant impressions has nothing to do with your real-time costs or auction position.
It’s not a sale if you don’t need it
Marketers often optimize ads for CTR under the misconception that it saves money. Not only is that not how ad ranking works, it’s simply the wrong approach to saving.
Imagine a model that grants lower click costs for a higher CTR. Buying more clicks that don’t convert is not a good business decision, even if those clicks are discounted.
And yet, that’s exactly what happened to paid search last year.
CTR was up 3% year over year, while conversion rate was down 10%, according to WordStream 2023 Google Ads benchmarks. Additional clicks weren’t converting!
Low conversion rates combined with increased CPC (despite higher CTR) resulted in a 20% increase in cost per lead year over year.
Kerri Amodio shared the results of her test designed to find the best CPL for her client:
The CTR for the test ads was 8% lower than the control group, costing them an extra $0.01 per click and ultimately saving them $10 per conversion.
Reason 3: Post-click performance is out of scope for paid search
Many people in marketing will argue that an ad’s job is to earn the click; it’s the job of the offer / landing page / lead generation form / sales team to close the sale.
Because the ad team often doesn’t control or even influence the post-conversion process, CTR is used as a success metric for performance that is under their control.
It’s true that ad clicks don’t directly generate leads and sales, but the quality of the click (and the clicker’s intent) absolutely affects the likelihood of conversion.
Using a post-click success metric, such as conversion rate, can help marketers assess the true contribution of an ad while only looking at CTR, which ignores the value of running ads on ‘high intentionality in the first place.
Reviewing and optimizing CVR is especially important in the RSA landscape, where an ad designed to earn an irrelevant click may increase CTR but result in fewer conversions.
In his SMX Next talk, Frederick Vallaeys shared data from Optmyzr comparing CTR and conversion rates to the number of ad headline variants:
This data shows an inverse relationship between CTR and CVR and the number of title variants and conversion rate.
Meanwhile, Google promotes the idea that varied headlines increase CTR and conversions, but supporting data is scarce.
Your documentation claims a 12% increase in conversion. to increase ad headlines and follow other recommendations. However, this is based on a two-day date range chosen from the various years that carry RSA.
So is CTR just a vanity metric now?
While CTR is no longer the measure of ad relevance and quality it once was, it’s still a useful metric.
CTR provides quick feedback on newly launched assets, which is especially valuable when budgets are small and conversions are slow.
It’s also useful to measure CTR when reviewing your ad with your keyword text segment to identify mismatches between keywords and ad text.
This data can help you make decisions about pausing or removing resources, creating new ad groups, or strengthening or clarifying existing messages.
Switch to a conversion-focused PPC framework
In Google’s drive to generate more clicks year after year, qualifying the click is better than earning it.
Improving your CTR ratio is often better achieved by lowering the denominator than increasing the numerator, and a lower CTR is better than a high CTR where the extra clicks don’t lead to conversions for your business.
By not prioritizing CTR in your evaluation of your ads, you can focus on messages that appeal more specifically to your target audience, improving your ad performance in the process.
The views expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.
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