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Understanding Google Adwords Click through Rate (CTR) Made Easy !!

If you can understand Google Adwords Click through Rate (CTR)  implementation; you can reduce cost of your campaign by half. Please go through the brief explanation on the subject which will bring all aspects related to Click through Rate (CTR) in a clear and concise manner.

As you start getting impressions (i.e., your ad shows up in the search results) and clicks, you'll have a click-through rate (CTR). This represents the number of clicks you receive per 100 impressions. Here's the really beautiful thing about Ad Words: the higher your CTR, the lower your click cost. Because Google values relevance, you'll receive a bonus for having a relevant ad, and CTR is the primary indicator of how relevant your ad is. So, let's say you're competing with someone for ad position No. 3 on the search results page for a particular keyword. Your max bid is $0.50 and his is $1. He should be way above you, right? Not necessarily. Suppose you have a CTR of 5%, and his is only 1%. Google factors in CTR when calculating ad positions, so you end up with this: max CPC × CTR = (what we'll call) ranking factor. In this case, your ranking factor is 0.025, while your competitor's is only 0.01. Which means your ad shows above his for $0.50, even though he's willing to pay up to $1!

It is very important that one implement these strategies in the Google Adwords campaign as aim is to reduce the overall cost per campaign and it in turn affects your business potential.

You must also make an endeavour to go through the below articles on Adwords as it will help you to get to understand the functioning of Google Adwords campaign in a clear and concise manner. keep on doing the hit and trial and you will realise that your cost per campaign will drop down drastically.

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