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How High CTR & Conversion Rates Can Be Bad for Business

I’m just going to say it, sometimes striving for a high click-through and conversion rate can actually be bad for your business. I know this probably goes against everything you’ve ever been told about optimizing an AdWords account. A high CTR is the holy grail in AdWords as it is the main factor Google uses when determining QS, which lowers your bids, which increases ROI… BUT … I have come across a few instances while managing accounts where a lower CTR and conversion rate was actually more profitably for the company. Let me share with you an example.

*The following scenario is based on actual events. Names and businesses have been changed to protect the awesome clients I work with.

Scenario: Bob owns a videography company in Chicago. The wedding market is highly saturated, so Bob has decided to expand his business. He’s always been an avid scrapbooker and thought, wouldn’t it be a great idea to provide a professional scrapbooking service to preserve family memories. Packages would include not only photo book creation but also videos where family members share their favorite stories.

Bob decides he wants to advertise his new product line on AdWords with his main goal being to drive purchases. Below is what the purchase path would look like for a customer:

Conversion Path

After doing some keyword research, Bob finds that terms most related to his business such as “professional scrapbooker” and “family memory videos” have very few impressions. So Bob has decided to bid on more general keywords in order to introduce his business to people who are interested in capturing family memories, but are not aware of this type of product.

Bob decides to start testing two ads, one with a more emotional appeal and one with the starting price in his ads. Because his product is more expensive than what a typical person looking to make a memory book would expect, Bob is worried about scaring customers away before they even get to his website.

Ad Testing CTR

Not surprisingly, the ads with a more emotional appeal have a significantly higher CTR, so Bob decides to pause all ads that mention pricing.

Since Bob’s AdWord’s conversion is customer information submission, is he also testing two different landing pages. The purpose of the landing pages is to have people fill out their information so Bob can contact them to discuss products and pricing. Content is the same on each page, touting the benefits of his product, but one has a shorter form for people to fill out and one has a longer form that asks for more information.

Landing Page Testing

Bob is excited as he has now found the perfect combination for his AdWords account, emotional ads with a short form landing page. After running this combination for a month however, Bob is spending a lot of time calling numbers and never hearing back or talking to people who aren’t making a purchase.

This is why it is so important to not just stay focused on getting the highest CTR and conversion rate possible in your AdWords account. What might be deemed as “successful” in your account isn’t necessarily what will make your business successful.

Bob wasn’t able to track his ultimate conversion goal of purchases made via AdWords because he wanted to be able to discuss different options with customers on the phone.

However, he was able to tell which ad and landing page a customer filled out, so he started tracking revenue and tying it back to the ad and LP. This is what he found:

PPC ROI

Although including pricing in the ad did deter people from clicking and resulted in a lower CTR, people who did click were prepared to purchase a higher priced item. People who completed the long form were also more interested in the product and therefore were willing to take the time to fill out all of the requested fields. The combination of a lower CTR ad and a lower conversion rate LP led to higher sales for Bob.

If anyone else has had experiences like this where “poorer” performance led to better results please post below!

  • Philip Sander Nielsen

    Great insights – thanks!

  • Matt Hill

    Superb thoughts – very useful indeed

  • Nathan

    I definitely agree with this. The advert with the price is definitely targeting customers at the purchasing stage of the buying cycle and the other advert is targeting people at the consideration stage of the buying cycle, which will give you a good CTR and as you outlined, not always the best conversion. Great article :)

  • http://www.facebook.com/john.spencer.984991 John Spencer

    what a load of crap

  • Pete James

    Utter wank

  • sanjay

    a bit confusing had to read the conv rate 3 tims to understand, but very interesting article

  • http://twitter.com/logosmith Gary Smith

    Makes perfect sense when you remember that the goal is to make a sale (the bigger the better), not accumulate clicks. Good article!

  • ADTD

    How did you calculate the 1. ROI combination and 2.CTR and conversion rate combination?

  • alberto

    sorry but your definition of “convertion rate” in this case is higly related to the ctr, they are actually indicating the same thing, since the form the potential costumers are filling is related to the action of obtaining info, just like it would be the action of clicking the Ad.

    In the majority of the other e-business cases the convertion rate is related to the “purchase action”, and that is what actually matters.

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