CTR vs. ROI, When Less Traffic Means More Money

Bob Dumouchel

A good Adwords campaign requires balance. CTR & ROI are 2 particularly difficult items to keep in harmony with each other. In the future we intend to examine more facets of this topic, but this article focuses on trimming traffic to increase profits.

Click Through Rates (CTR) are really important to any PPC campaign, but they don’t mean anything if there is no Return On Investment (ROI). Sometimes when we take over an existing account we’ll find ads with astronomical CTR’s which is at first glance awesome, but the Cost Per Conversion is a little wonky. Seeing as companies market for the sake of making money, sometimes CTR needs to suffer to help you profit more.

When most people get started with PPC advertising it’s usually all about traffic. They get excited to see their web site grow from 15 visits a day to 100 visits, and then 200 visits, and so forth. While they’re getting all caught up in the number of visits the Return On Investment is being ignored.

So how do you tune down traffic and turn up sales?

PPC advertising is all about relevant traffic, not necessarily as much traffic as you can get. Look at your keywords, are some too broad? Are some related but too far of a stretch? Go into you analytics and check the bounce rates for some of these words, are they way above your sites average?

The first thing to consider is does the word buy you anything? If it sends you traffic of no value just pause it, you may want to revisit it sometime later but for now it’s just a hole you throw money in. If the word is an important word for you but is sending good and bad traffic start looking for ways to limit the bad stuff. Think of possible negative keywords and run a Search Query Report for inspiration.

The other hidden offender is ad text. When you look at your ads are they too effective for their own good? At first that sounds ridiculous, but is your ad attracting traffic from a broader group than you were targeting? A lot of web surfers scan and only see the headline of an ad. Could your headline be applied to other unrelated searches? If it can consider adding a qualifying word to your headline to ensure people know what they’re getting if they go to your page. For example if you sell training, use a word like “buy” so people don’t click on your ad looking for free information. The word “buy” will reduce the CTR, but the conversion rate should remain the same or even increase because the visitor knows they are going to a site that sells training.

There is no definitive silver bullet, but these steps can help keep your ROI under control.