An average lie. Three levels of average CTR.

House was right.

Everybody lies. Averages are no exceptions. Averages are icebergs. You see their tip, but have no idea what’s under the water.

Unless you dive deeper.

Pick a keyword. An average one. Nothing special. Look at its average CTR.

  • CTR: 5%
  • Quality Score: 7
  • Impressions: 4000
  • Clicks: 200

Nothing to call home about, right? So how is that keyword doing? Good, bad, average?

If you stay at this level, you’ll never know. So let’s deconstruct that keyword’s CTR.

How does a keyword get its CTR? Someone types a search term into Google’s search box. A keyword is triggered. If that keyword makes it into the auction (its Ad Rank is high enough), the system pulls an ad from that keyword’s ad group, and shows it. That’s an impression. For the keyword, the ad, and the search term.

Another search term is typed, and the same keyword gets triggered. If it makes it into the auction, the keyword gets another impression, just as the search term, and the ad.

So actually, a keyword’s CTR is, in fact, the sum of clicks of all search terms that triggered it, divided by the sum of their impressions.

Therefore that 5% CTR can in fact be composed of:

  •  120 clicks per 2000 impressions for S1 (search term 1), CTR 6%
  •  80 clicks per 2000 impressions for S2 (search term 2), CTR 4%

Again, 4% and 6% are not too far apart, they both look pretty much the same.

Let’s go one level deeper. Let’s say you have two ads in that ad group. How does a search term record an impression? All alone? Not really. An ad gets triggered by it. And if we put on a pair of our customers’ shoes, we realize that the decision to click an ad or to skip it is not related to the search term alone. It’s related to the search term / ad pair. If the ad answers the search query, if it is related to it, a click is recorded.

So those 6% and 4% CTR for search terms S1 and S2 can, in fact, be, the sum of clicks for the S1A1, S1A2, S2A1 and S2A2 search term / ads pairs, and their impressions.

They could be:

  •  110 clicks per 1000 impressions for S1A1, CTR 11%
  •  10 clicks per 1000 impressions for S1A2, CTR 1%
  •  10 clicks per 1000 impressions for S2A1, CTR 1%
  •  70 clicks per 1000 impressions for S2A2, CTR 7%
Just as they are in the picture below.

The average lie. Three levels of CTR.

Amazing, right? Average at keyword level, still average at search term level, completely apart at search term + ad level. What works for one search term in terms of ads does not work for the other, and vice versa. Please note that if the same CTRs would have been split differently, you would have seen the bad performance either at search term level, or in your ad report. But when one search term works well with one ad and bad with the other, and the other way around, you can only see it when you look at the pairs.

So should you start looking at all the search terms and all the ads, in all the ad groups through all your campaigns? No. That would be way too much. But for loose match keywords, more general keywords (if you have to use them), for keywords attracting many impressions and many different search terms, in ad groups where you have more than one ad, and where the ads you’re testing are quite different, it’s something worth looking at.

All you have to do is to look for those keywords, click on them, then choose “See search terms – Selected”. Press “download” and add the Ad Id as a segment. You’ll end up with a table which will contain search terms, Ad Ids, CTR and other metrics.

Sort by search term, and go through that table, and check for variations in CTR as the Ad Id changes for the same search term (or create a pivot table if you wish). Consider splitting that ad group into several ad groups, and make good use of negative keywords whenever you see that some search terms do great with some ads and bad with others.

Make sure you are the master of your search terms, and that you always pair them with the right ad.

We’ve now come to see that there are situations when even inside the same ad group, search terms can perform radically different, according to the ad they’re paired with. And that what matters is in fact exactly what the customer uses when making the decision whether to click or not: the search term, and the ad paired with it. Not the keyword, because that’s invisible to the customer, and all it does is attract one search term and another, not the ad (alone), and not the search term (alone). But the team. As always.

5 responses to “An average lie. Three levels of average CTR.”

  1. Jan Mazánek Avatar

    I tried to summarize your post: CTR is a weighted avarage for pairs “searched term” + “displayed add”…

    …and found it incomplete. It should be adjusted by “average CTR” for the position, where add was displayed.

  2. Calin Avatar

    Thank you for the comment, Jan.

    While generally speaking, an ad appearing in a lower position has a lower CTR than the same ad appearing in a higher one (which is the reason why Google is factoring out the position-boosted CTR from the calculation of the quality score of a keyword), often this is not true when comparing the performance of search term / ad pairs.

    I have found many examples where search terms combined with one ad, which appeared in a lower position on average, have a higher CTR (sometimes much higher) than the same search terms combined with different ads.

    And this prompted me to think that there are many situations when an ad that is a great match for a search term gets – though in a lower position – more clicks than another ad, placed in a better position, for the same search term.

    Of course, apart from ad position, you will notice that there are other factors affecting the performance of search term / ad pairs. Geography, for instance. Or the time of day.

    But the fact is that even at this level, of search term / ad pairs, one can spot good combinations and bad combinations, and act accordingly, even though the surface numbers look average.

  3. Deepak Kumar Avatar
    Deepak Kumar

    It’s an excellent post. Thanks for sharing!

  4. Dylan Bowes Avatar

    Wow what a helpful post. Thanks for sharing this information with us. I’ve been trying to wrestle my adwords account into submission but there’s a lot to make sense of. Keep up the good work!


  5. bmanbaker Avatar

    Thank You!!!

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