Clicks, CTRs, and Conversions... Oh My!


Published: July 24, 2017 Author: Jason Holicky - Hometown Design Studio Inc.
Clicks, CTRs, and Conversions... Oh My!

So far, we’ve covered the basics of what Search Engine Marketing (SEM) is, and how to build a keyword strategy that will meet your goals--but what are those goals exactly?

When you’re running a search campaign, the activities you are trying to inspire from searchers are impressions, clicks, and conversions. Increasing these will be the goals for your campaigns, and we’re about to break them all down.

What is an Impression?

In the simplest terms, an impression is when a web user sees your advertising. Of course, there’s no real way to determine whether the user’s eyes saw the ad or whether they read the whole thing or just skimmed over it. 

Think of impressions like billboards on the side of the road. As you’re driving, the billboards become visible to the people in the car who may or may not pay any attention to them.  Regardless of what people do, driving past the billboard would count as an impression.

Clicks and CTR: What You Are Really After

While an impression is a passive activity that doesn’t necessarily indicate interaction, a click is the opposite. Loaded with intent, a click is a direct action taken by a user after seeing an ad.

The click-through-rate, or CTR, is the percentage of people who have clicked your ad after viewing it. Mathematically, it is the number of clicks divided by the number of impressions. So, if 1000 people were shown your ad and 30 clicked on it, your CTR would be 3%.

There is no single benchmark that all advertisers aim for as far as a “good” CTR for search marketing as it varies considerably by industry. However, Google’s average rate across all industries is about 2%. The Dating industry does the best with 3.4% and Legal Services brings up the bottom at 1.35%. 

We’ll do the homework for your particular niche to find the right goal for your campaigns, but we think it’s important to understand that almost all SEM advertisers are reaching for a 1-2% click-through-rate so everyone has the right expectations.

Conversions: The Main Event

A conversion event is one where the user has taken whatever action you’ve set out to drive with your advertising. It can be a completed sale, a downloaded white paper, a newsletter signup, or downloading a trial. 

A conversion requires advanced action on the part of the user--it’s not a passive activity. When you’re getting successful conversions, your advertising is doing its job of delivering either more sales or more highly-qualified leads.

The Funnel: Bringing it All Together

These steps work together to form a funnel to bring in more customers. Impressions are at the top of the funnel and conversions are at the bottom. You want to sweep wide to draw lots of impressions. From those impressions, you’ll get a smaller number of clicks, and then a few conversions. 

If you’re not seeing enough conversions, then we go back through all the steps and find the bottleneck. If you’re not getting enough impressions, we might need to tweak the keyword strategy a bit to get more people in front of your advertising. 

If your CTR is too low, the ad itself might need work or the keywords are not matching the intent of the users. If your impressions and CTR are hitting the right numbers, but you’re still not closing enough deals, then we work on landing pages and other optimizations to bring more people to the bottom of the funnel.

One Last Thing: Cost

Of course, you can’t just dump your advertising all over the place to get more clicks. For one thing, people get really annoyed at poorly-targeted ads and that’s not good for your brand. Plus, advertising isn’t free. Every click you receive comes from your budget, and the cost-per-click (CPC) is the driving factor behind the ultimate metric: Return on Investment (ROI).

So, to bring the alphabet soup together:

Impressions lead to clicks. Clicks lead to conversions. Conversions make you money. Your cost-per-click (CPC) needs to be low enough and your conversion rate high enough that you achieve a return on your advertising investment (ROI). 

Whew! That’s a mouthful!

Next week, we’ll dig a little deeper into the benefits of SEM and achieving a good return on your investment.

About the Author

Creative Director Jason co-founded Hometown Design Studio of New Lenox, IL in 2013. He spends his days guiding and consulting industrial clients and small businesses owners on their marketing strategy and projects. Jason enables everyone to be successful and grow their business by sharing his knowledge and experience.
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