“If you know the enemy and know yourself you need not fear the results of a hundred battles.”
– Sun Tzu
In the AdWords game, all of us are data enthusiasts. We look at the performance indicators of all our campaigns when we first arrive in the morning and we have them up on screen all day. We celebrate every click, every gained percentage point and every positive move in ad position. Give us a batch of new data and we break out the punch bowl. I’m sure it’s the same way in the office of every other SEO and PPC firm across the globe.
So, at the end of June, we had reason to celebrate. Google, in their infinite wisdom, added a new function to its AdWords targeting abilities. Perhaps you’ve already seen it. It’s the Relative Click-through Rate (R-CTR, we’ll call it for lack of a better acronym). And for AdWords campaigns large and small, it’s quite the interesting piece of data, for it lets us measure ourselves against our enemy (hence the Sun Tzu quote).
A quick review: In AdWords, your click-through rate tells you what number of ad viewers actually click on your display ad and it shows you this information as a percentage. So if your AdWords ad was delivered 100 times (that’s 100 impressions) and only received one click – then the click-through rate would be 1% for that ad.
Now, I’m not ashamed to say that we love looking at the click-through rates for all of our ads. It’s a measure of ad performance that – over time – shows us what we’re doing right or where we may need to make some improvement. The click-through rate guides us to make minor tweaks and sweeping changes to our ads because – in the end – performance is performance.
The strange bit – leading up to the release of the R-CTR – is that we are always measuring our current performance against our historical performance. We’re naturally competitive types, so where’s the competition?
Here’s where the R-CTR gives us what we’ve been sorely lacking – it’s a click-through rate that is relative to the click-through rates of your competition. Ads that receive an R-CTR score of 1x or more are sure to be edging out the competition in the market. Easy, yeah?
In the R-CTR release article from Inside AdWords, one of Google’s official blogs, it is explained that “User behavior on web pages varies depending on the type of page users are on. For example, users may interact with ads on a product review page differently than with ads on a blog. Click-through rate (CTR) tells you how often users click on your ads, but CTR can’t tell you how your ads perform compared to other ads on the same page.”
So why does the R-CTR metric really matter to a guy like me?
Let’s say that you see that one of your display ads is continually receiving a click-through rate of about 0.68% and you think that this is particularly good news. This is where the value of R-CTR comes into play. The R-CTR score for that same display ad may tell you that you’re actually sitting at half the average click-through rate of the competing ads on the page – or, simply put, your ad is performing half as well on a click-through rate basis than those ads being run by your competitors. Your ad doesn’t resonate with the viewers. The prospects are responding to your competitor’s messages more often than yours. Time to make some ad tweaks and improve your ad performance, eh?
Additionally, the R-CTR is a fair performance indicator in the Google display network and serves as a competitive landing page score. If your ad has a score below 1x you can be certain that your competitors are taking business opportunities away from you. It’s then time to evaluate every low-performing ad and make any changes necessary to see that R-CTR score rise to 1x or above.
Now, keep in mind that the best use of the R-CTR performance indicator comes when your ad groups are broken out and uniquely categorized by sub-group. As an example, a good structure for your ad groups may look like something this:
Campaign Name: Superhero Gadget Devices
Ad Group 1: Grappling Hooks and Ascenders
Ad Group 2: Jetpacks and Flying
Ad Group 3: Thermal Vision Devices
Ad Group 4: Wearable Armor & Exoskeletons
As you can easily see, each of the ad groups above is focused on a specific sub-set. The Superhero Gadget Master who runs these ad groups will want to measure the R-CTR score for each of his ad groups individually. And, as stated before, anything below 1x can use some proper detailing.
To view the R-CTR within your own AdWords account, follow these two simple steps:
- Click on the “Campaigns” tab on your Starting page.
- Go to the “Ad groups” tab and select “Customize columns” from the “Columns” drop-down menu
- Select “Relative CTR.” Relative CTR will appear at the campaign or ad group level.