Learn What is a Good CTR vs Conversion Rate Formulas

CTR (click-through rate) and Conversion Rate are the two most important metrics of Google Ads paid advertising. Click-through rate is the percentage of the number of clicks you get on your Ads. Conversion Rate is a percentage of the app or website visitors who completed a desired action.

In this article, PPCexpo will tell you what is a good CTR vs Conversion Rate and formulas to calculate them. So, let’s start and find out how these key metrics are linked to your campaign’s success!

What Is CTR?

CTR is the percentage of the audience who clicked your Ads to visit your website or landing page. Or, it is the percentage of the total Ad views that resulted in clicks.

So, we can say, Clicks /Views = CTR.

For example, if your Ad got 60 clicks and 1000 views, the CTR is 6%.

CTR influences an Ad’s relevance score and quality score. But, it isn’t a positive sign always. If your landing page isn’t relevant to a visitor, or you are targeting irrelevant keywords, it won’t do anything good.

Therefore, it is crucial to take some time researching the right keywords to make your paid Ads relevant to the audience.

What Is A Good CTR Then?

Well, it depends upon the type of your industry, business, your business goals, and other factors like your search network, Ad relevance, Ad network, device, etc. The Ad CTR isn’t the same for everyone, and it takes time to determine your average CTR.

However, the average CTR across all the industries in Google Ads is stated as 2% on the search network. Some believe that it’s too low. While there is no one-size-fits-all answer to this question, below are some of the benefits of a good CTR-

Improves Your Conversion Rate

The more clicks you get, the more the conversion rate. When the viewers engage with your Ads, it causes them to click your call-to-action. Whether you want them to make a purchase or fill a signup form, a higher CTR can help!

Improves Your Google Ads Quality Score

Quality Score is an essential component of your Google Ads. When you have a good CTR, your Ad will rank high, that too, at a low CPC. In turn, you save money and boost the overall ROI.

Helps You Earn A High Ad Impression Share

When CTR increases, you earn a low CPC. If you are just beginning, these savings may not appear insignificant. But, as you get more clicks, your savings add up. Also, a good CTR increases your impression share. Your Ad starts showing up more than before.

What Is The Formula To Calculate CTR?

In order to calculate the CTR for an Ad, divide the total number of clicks by the total number of views. Thus, the formula can be stated as-

CTR = Total Number Of Clicks/Total Number Of Impressions or Views x 100

You can use this percentage to gauge which Ads, keywords, or listings are the most successful and which ones need to be improved.

What Is Conversion Rate?
As the name depicts, the conversion rate metric gives you the percentage of the website visitors who answered your call-to-action. Or the visitors who completed a desired action. Conversion Rate is such an important metric that impacts a business’s overall revenue or sales.

What Does A Good Conversion Rate Show?
A good Conversion Rate has the following benefits-

Leads To A Good ROI

Sales or revenue is the topmost priority of any business. When the conversion rate increases, your business starts making more sales and generating more revenue. It results in a great return on your investment and helps you achieve your business goals.

Shows That You Are Doing Things Right

No matter the type of your business, a high conversion rate shows that you are convincing people with your content or messaging. Or, you are successfully generating leads and converting them into sales. Google drives more traffic your way because you are providing the customers with what they are searching for.

Helps You Optimize The Conversion Rate

When you have just started your PPC Advertising, it may take time and effort to refine your Ads or landing pages for better results. Once you know what’s getting you conversions, you will start optimizing the conversion rate of a buyer’s journey.

Conversion Rate Optimization makes it easier for you to turn your leads into repeated customers, reducing customer acquisition costs.

How To Calculate Conversion Rate?

In order to calculate the conversion rate, divide the total number of website visitors by the total number of visitors who took the desired action.

So, Conversion Rate = Total Number Of Conversions/Total Number Of Ad Clicks.

For example, if you get 20 conversions from 1000 clicks, the conversion rate is 2%.

What If The CTR And Conversion Rate Is Lagging?

CTR is a metric that influences your Ad’s performance. However, if it is low or isn’t up to the mark, it signifies that you need to check your Ad campaign and figure out where you are lagging. It might be due to irrelevant keywords, Ad copy, or the Ad's landing page isn’t what the user is looking for.

Furthermore, if the Conversion Rate is low, it’s time to see whether you are providing the customers with value. A low conversion rate might be due to poor user experience on your website, complicated steps, irrelevant content, etc.

To Conclude

While click-through rate and conversion rate are two different metrics, both of these directly impact the success of an Ad campaign. Take steps to improve the customer experience, right from the Ad to the call-to-action. Make sure that everything is relevant to the viewer’s so that your Ad attracts more clicks and conversions. If your Ad is engaging, you have relevant content on your landing page, and a convincing CTA, you will get qualified traffic that is likely to take the action you want.

This way, you will improve your business’s ROI. So, keep track of these key metrics to ensure that your PPC campaign runs well.