AdWords is now called Google Ads and is the dominant paid search platform and one of the most effective ways of generating leads and sales.
When managing a campaign it is helpful to know how well the account is performing and the first measure of this is the Click Through Rate or CTR. This measures how effective your ad copy is at attracting clicks onto your website landing pages.
So what is a good CTR in 2018?
This depends on the industry or market sector you are in. Some market sectors have very different average CTR rates from others. The B2B sector tends to have one of the lower ones, with tourism and some consumer services much higher.
To analyse trends across different sectors we have analysed AdWords data from over 2,200 different campaigns across five different market sectors to compare CTR data. The table below summarises this data. This is based on data over a 12 month period up to October 2018.
Note: This data is based on accounts that ExtraDigital has managed and might not be a typical cross-section across all paid search accounts.
Average CTRs for B2B sector
The data for B2B has been aggregated across a large number of different B2B sectors and there is significant variation within these. So although the average B2B click-through rate is only just under 3%, the values per account actually range from a very low 1.2% up to 8.1%.
Some B2B sectors are very competitive with high bid prices and large numbers of competitors as well as a small number of target consumers. So successful PPC work requires careful ongoing optimisation. Indeed a detailed look at the different B2B AdWords campaigns shows no correlation between average CTR and market sectors but does show a correlation with length of time managing the account and average CTR.
The B2B AdWords accounts with an average CTR of over 7% have all been continuously managed and optimised for over 7 years. There are two different reasons for this. Firstly if an account is well managed for a long time the quality scores will be high and the performance increased. Secondly, after a long time of management, it is likely the ad copies have been very well optimised to gain high click-through rates.
Average CTRs for B2C sector
The data in the B2C sector is mostly E-commerce shops but also includes some businesses that sell to consumers via a sales team following up on leads.
What is noticeable is most of these accounts actually have high CTRs over 4% with some over 11%. When trying to look for trends in terms of markets within the B2C sector, the online shops tend to have lower click-through rates than the account that aim to produce qualified leads for sale of high-value items.
Average CTRs for the Charity sector
The average CTR for this sector seems very high. But this is based on a smaller sample than the other segments and this value may not be representative of a wider range of accounts.
Average CTRs for the Health sector
This sector includes a range of businesses from hospitals to healthcare and/or wellness providers. The average CTR for accounts in this sector over 12 months was 3.56% - about the average for all the accounts analysed. This sector also shows the lowest variation across different accounts.
Average CTRs for Tourism
From the data, we have analysed across many different campaigns and accounts this sector has a very high CTR. Even the lower performing campaigns show good average CTR’s. This might be because within this sector it is possible to use very specific ad copy for the searches.
How important is the CTR?
The CTR is only one part of paid search and does not involve any measurement of cost. So is it useful? Over 10 years ago the answer would have been no, not very important as the key metric is the cost per click or cost per conversion. This was when the CTR had no impact on the cost you pay for a click.
But after quality scores were introduced by Google, ad position and CPC became dependent on previous ad performance and the CTR became an important parameter. If you have an account with a low CTR you will be ranking lower and paying a higher price for clicks than an account with a better CTR.
In summary, measurement of CTR is important for any paid search campaign, and it is useful to benchmark your campaigns compared to others in a similar industry.