A fundamental step to evaluate an AdWords account should be the analysis of the clicks the account is receiving. Clicks are the engine of any account and therefore they need to attract the right customers (right customer = the one who converts).
The first indicator you have to look at is the current level of cost per click (CPC). Specifically:
1. What is your advertisement position with the current CPC? Ideally, your goal should be to be in the first three positions in order to take advantage of ad extensions and increase your click-through-rate. If your current CPC does not let you appear almost in the first 3 positions, you might need to increase the bid or work on the quality score of the keywords in the account.
2. (For older accounts) Did your cost per click decreased or increased over time? What changes might have caused it?
3. What is the quality score level of your keywords? If it is lower than 7 you will need to change something in your advertisements and / or landing page in order to increase this value. As you might already know, a better quality score will result in a better cost per click.
4. Did you stop all keywords that do not show up due to a low search volume and / or a low quality score? They tend to increase your overall cost per click and therefore you need to intervene and fix the problem by pausing those keywords or moving them to a different (new) AdGroup.
The cost per click is something that varies from an industry to another and therefore it is difficult to estimate it for new account. If you already worked in a similar industry, you can already have an estimation of what a click is going to cost. If you are not sure about it or if you have never worked in a given industry, You need to run a weekly test and understand how the market moves in term of cost per click.
The analysis of the mere cost per click is not enough and needs to be supported by a complementary analysis, testing the efficiency of the campaigns of an account in attracting clicks.
The study of the click-through rate (CTR) has few main goals:
1. Evaluate the effectiveness of the advertising message: if you get a high CTR it means your advertising message is relevant to your audience. In order to evaluate this goal you need to evaluate the value of the CTR at the level of the advertising message (by clicking on the ad tab in the AdWords account)
2.The relevance of a keyword for your business: What is the CTR of a keyword over another one? This is an important indicator as it might help you refine your keywords list in one direction over another one. In order to evaluate the CTR at a keyword level you just need to click on the keywords tab in the AdWords account.
3. Which advertising messages work better for a given group of keywords: You can find it out by looking at the CTR in the AdGroups tab. A keyword needs an advertising message to get clicked and therefore it is useful to know which advertising message maximizes the use of a given group of keywords.
The CTR is a really powerful tool but you need to consider how it plays together with the overall conversion rate. You do not need a high CTR if all conversions are generated by another adgroup / keyword / advertising message. You need to see what converts more (respecting your objective of profitability) and tailor your account based on that.
Also, You can have a 100% CTR and not converting. In this case you need to consider two possibilities:
1. Your keywords are not relevant to you. Look for keywords that are reflecting the behavior of a person looking for your type of product /service.
2. Your landing page needs to be restructured and written in a way that generates the most benefits of the work done at the advertising level.
Would you like a personalized consultation about your current performance from a click point of view? Contact us and we will be happy to help you out!