Recently, Wordstream, an online advertising management platform, published a study looking at some key performance indicators for Google AdWords campaigns by industry. More specifically, the study looked at click-through-rate (CTR) and average cost per click (aCPC) across all industries. For reference:
CTR – This is simply how many times your ad was clicked (clicks) divided by how many times your ad was shown (impressions). See below for more on the impact of a good CTR.
aCPC – Your average cost per click is the average amount you pay for each time someone clicks on your ad. Each keyword has a different cost. In some areas, it’s impossible to avoid paying a lot for each click, but in general, the goal is to keep this number as low as possible.
How Does Points Group Compare to the Rest of the Health & Medical Industry?
For CTR, the industry standard is 1.79%. Our year-to-date CTR across all of our clients is 2.52%. That means we are exceeding the industry standard by 40.78%. Having a good click through rate is more meaningful than simply getting more clicks on your ads. It can actually save you money, reducing your aCPC by improving your quality score. Quality score will be explained below.
For aCPC, the industry standard is $3.17 per click. We come in at $2.25 per click; that’s 29% below the industry standard. To illustrate the difference a little more clearly, that means that the industry is generally paying $317 for 100 clicks, while our clients are spending $225 for the same results. Obviously, this disparity only grows larger with more volume.
What Are Quality Score and Ad Rank?
Your CTR can actually reduce your aCPC by improving your quality score. How does this work?
To understand this, you have to understand the Google auction process. I’ve included Google’s explanation below:
In summary, this is how it works.
Quality Score – The keywords you want to bid on are assigned a quality score in your account. This quality score is a number from 1-10 that is determined based on a few criteria:
- Landing Page Experience – How relevant is your keyword to the landing page that your ad is directing traffic to?
- Ad Relevance – How relevant is your keyword to your ad copy?
- Expected CTR – What does Google expect your CTR to be? This is based on your keyword’s past CTR.
Ad Rank – From here, Google adds a few more factors to determine your final Ad Rank. Your Ad Rank determines where your ad actually shows up on the Google search results page. These factors include:
- Quality Score – Explained above.
- Ad Formats – As part of your campaign setup, you can add extensions to your ad so that it will include links to other pages on your site, your phone number, your location tied into Google Maps, etc. Having this set up properly can have a positive impact on your Ad Rank.
- Bid – The actual money you are willing to spend for a click.
As you can see, your click through rate has a direct impact on your Ad Rank, which in turn impacts the amount of money you are spending on a click. Our strategy is to keep your CTR as high as possible so that we can reduce your aCPC and give you the largest possible impact for your budget.