Understanding CTR vs. Conversion Goals

I am working with a couple of AdWords clients right now that are really struggling with meaningfully analyzing the return on their AdWords campaigns. I suggested that they add conversion codes to better understand what may be working when the question came up, “Well what is the difference between Clickthrough-rate (CTR) and Conversions? I’ve been looking at the CTR as a means of identifying how well my campaigns are doing, so why will looking at conversions be better?”

To understand this we first need to understand the difference between “Clickthrough-rate” and the “Click conversion rate”.

The Clickthrough rate (CTR) is the number of clicks your ad receives divided by the number of times your ad is shown. In this example, the ad was available to be seen by 343 individuals (impressions) and was clicked on twice. That would mean the ad had a 0.58% Clickthrough rate. .58% of people clicked your ad after it was shown to them.

Converted clicks are the number of clicks that convert within a chosen conversion window. This means that you know how many clicks resulted as a result of an “action” being taken. The Click-conversion rate therefore is the number of converted clicks divided by the total clicks that can be tracked to a conversion. Here are some more details on conversions directly from Google.

Still confused about what a conversion is? Many clients are.

To determine what your company conversions are, you need to determine what action you want visitors to take. If you are a B2C company, then it is likely your conversions are sales which can be quantified by revenue. For B2B companies this often gets trickier. To determine conversion goals consider what you would like to see visitors do.

  • Do they have the option of signing up for a newsletter?
  • Are there areas of your company website with specific calls to action?
  • Does your website include tools for clients that could be launched or downloaded?

All of the above listed ideas are actionable activities that likely carry some weight within your company. Conversion goals therefore should be very specific to your business and include actions on a webpage, calls from ad extensions, or actions from a mobile app. Create good, strong conversion goals, and you will be amazed at what insights you may be able to see as a result.

 

 

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