• showing an “Average position” column right on the main Search Queries page
• showing a “Displaying” number for Impressions and Clicks
• showing a CTR for a given query

These items can provide some great insight into your site’s activity.  Of course you should cross reference with your own analytics to see if the data resembles what you are actually seeing.  Especially in terms of organic click-through rates.  We should remind you that the traditional definition of click-through rate is the average number of click-throughs per hundred ad impressions, expressed as a percentage.   The organic click-through rate that Google is reporting in Google Webmaster Tools is the number of clicks divided by the number of impressions, expressed as a percentage.

According to Wikipedia:

CTR is most commonly defined as “number of clicks” divided by “number of impressions” and generally not in terms of the “number of persons” who clicked divided by the “number of impressions”

Organic Click -Through Rates: What’s the Standard? 

What is interesting about this is that in the past, people have tried to establish a standard for organic click-through rates, yet this has not been an easy thing to do.  I would suggest that there really is no true standard for organic click-through rates due to a couple of key factors:

• Nature of the search – different types of searches will provide different type of CTRs
• Changing Landscape of the SERPs – as personalization and blended search make the Search Engine Results Pages more dynamic, calculating the organic click-through rate becomes more difficult.
• Real-Time Search – timely search results contribute to the changing landscape of search results page

So as you can see having a standard for organic click-through rates is truly difficult to produce.  Having said that we are getting closer.  Here’s a comparison of some recent research and information on organic click-through rates that you might want to consider.

Chitka Research @Chitka – May 2010

There were some interesting findings with this research.  While stating the obvious, that the prime organic real estate in Google is the #1 spot, the CTR of 34.35% that they reported was higher than we have typically seen.   Here is a breakdown of the organic click-through rates (in Google) for positions 1-15 based on Chitka’s research.

Another interesting finding from their research was the importance of being on the first page of Google.  The research suggests that moving from the top of page o in Google (position 11) to the bottom of page one (position 10) sees a 143% jump in traffic.  This is significant although the 143% increase means going from a CTR of 1.11% to 2.71%.  The point is clear however, you want to be on page one of Google results to generate sufficient click throughs and organic traffic.  In particular within the top three organic results ideally in the top spot.  Does this task daunting?  Well it obviously depends on the keyword your are trying to place for, but optimizing your content, and not just your traditional web pages (read: video, press releases, shopping feeds, local results, blogs etc.)can help you gain visiblity in the organic search results.  http://chitika.com/research/2010/the-value-of-google-result-positioning/

Enquiro’s Marketing to a B2B Technical Buyer – 2007

In our very own research we established our own organic click-through rates based on how B2B technical buyers search knowing that technical buyers are using online to search and select and screen out vendors; to create short lists; and to get competitive pricing for closing negotiations.  What we found is that the top organic listing generated a CTR of nearly 25%.  What we found that was interesting and holds true based on some of our own client’s data is that being in position ten at the bottom of the page was more valuable than say being in positions five thru nine.  Here is a breakdown of our organic click-through rates:

If you like, you can download our free B2B whitepaper on Marketing to a B2B Technical Buyer from Enquiro Whitepapers page.  We have been analyzing organic click-through rates for years dating back to some of our earlier research in 2005 as mentioned here.  It’s interesting that even in 2010, that organic listings/results still generate the majority of clicks compared to paid or sponsored listings.  While the gap is narrowing ever so slightly (a few years ago the split was 80/20 paid vs, organic), today 70-75% of the clicks are for organic listings when compared to sponsored.  Where are you putting your resources? 

We have conducted additional research which suggests that the CTR is most likely around 26% for top organic, 12.68% for position two and 8.89% for third organic spot.  Results vary but this seems to be close to what we are seeing in Google.  With all of the recent changes that Google has been implementing it appears that the organic CTRs are changing as well.  Take this post which suggest that the average organic click-through rate s 46.37% and spot number two is 29.3%.  Still other reports such as this one, suggest that the CTR for the top organic spot in Google is 42.3% and the second spot is 11.92%.

So while there is no standard for organic click-through rates, the data is there and organic click-through rates are not as elusive as they once were.  Of course you have to monitor your own data to see if the CTRs mentioned above hold true for what you are seeing with your own traffic and such.  Your organic search efforts should focus on gaining visibility in the search results.  It is obvious that there is no greater visibility than being in the prime real estate of the top organic listing in the search results, whether it’s Google, Yahoo, or Bing.

This is the final installment of the 4-part series on key PPC best practices (PPC Best Practices Part 1, Part 2, and Part 3).

Speak Their Language

There has been constant debate as to what to use for keyword analysis with regards to long-tail versus head phrases and which yields the better results. Head phrases are the very generic and broad search queries where there is enormous search volume, but costs associated with the keywords are quite high. Torso keywords are the more-specific keywords; the 2- to 4-word search queries that still have lower search volume compared to the head phrases, but also tend to be cheaper. Long-tail keywords are the keyword phrases over 4 words where the costs tend to be minimal, but search volume is also sparse.

When doing keyword development, first look at the torso phrases and develop your keyword strategy using 2- to 4-word search queries to develop the keyword basket. Once you have the torso phrases, run the account and closely monitor the performance of the individual keywords down to your most granular KPI (ideally ROI or cost per conversion on the keyword level).

Once you know which keywords are driving highly-qualified traffic in the torso, it is then possible to look at the longer-tail keywords associated with the high converting torso phrases. Accounts with literally millions of keywords are not necessary when only a small percentage are actually working; spend where the ROI is made.

When developing your keyword basket, make sure you step into the mind of the searcher. Which keywords is your target market most likely to be using when searching for your product/service? Ensure you are not simply bidding on the marketing language you use internally, but also the language with which your market is most likely to initiate a search. (Hint: Talk to your sales department. They know the language your customers will be using.)

We recently took over a PPC campaign from a client doing it in-house and our first step was to look at the keywords. By refining the keywords based on user intention we decreased the Cost Per Click (CPC) by 23% and doubled the Click Through Rate (CTR). The conversion rate also increased substantially.

It is also possible to break out keywords by the Purchase Decision Process (PDP). By paying close attention to the keyword refinement process, it is possible to determine which keywords are being used at the beginning of the research phase, in the consideration and comparison phase and in the purchase intent phase of the PDP. By allocating these keywords into appropriate campaigns, you can then control the budgets associated with those keywords and effectively increase ROI, awareness, brand reach or whatever your PPC goals are.

Quality Score Is an Indicator, Not a Destination

There has been lots of debate around quality score and what it means to PPC advertisers. The long and short of a quality score is that it is designed to assist the customer. Google and Yahoo (with MSN just coming on board) have been using quality scoring to increase the quality of ads to improve the user experience. That being said, quality score should not be managed.

If you, as the advertiser, are looking to provide the consumer with the best experience possible (a good idea if you’re looking for conversions), then your quality score should naturally be good. A colleague of mine, Chris Davies, gave the perfect analogy for quality score: "It’s the ‘check engine’ light." If you have a poor quality score it serves as indication that it’s time to look under the hood and see what’s causing the issue. Look to your ad copy, landing pages and keywords, or reassign ad groups to adjust your quality score.

Ultimately, if you have a poor quality score and conversion rate is good and cost per conversion is good, then the few cents difference a better quality score can make is irrelevant.

Stop Measuring Cost Per Click; Start Measuring Cost Per Conversion

Ultimately, every change made to a PPC campaign should be to lower the cost per conversion. Therefore, don’t be afraid to bid aggressively on high-converting, high-quality, traffic-generating keywords and bid lower on the other 90% in your campaign if at the end of the day you are achieving the end goal.

Stop Thinking PPC, Start Thinking Consumer-Initiated Marketing

Over the past year, several new options (and the list keeps growing) have been made available for online advertisers to create more sophisticated online marketing campaigns. We’ve seen the implementation of display advertising through Pay Per Click (PPC) providers as well as a significant movement towards local and mobile advertising. This movement in the market represents a paradigm shift, from simply a PPC-focused strategy, to thinking about all the channels associated with consumer-initiated marketing conversations.

Several of these options include display advertisements, paid inclusion, local listings and Pay Per Action (PPA). With each of these options there are several different revenue models (and by revenue, I mean for the search engines). Therefore, it is important to ensure you have effectively allocated your budget to maintain your ROI (Return On Investment).

PPC and PPA models are the most effective for the advertiser based on the business objectives of driving users to the site and gaining conversions, whereas a CPM-based model is more effective from a branding perspective.

With each of these models it is extremely important to know what your end goal is and how to reverse-calculate to estimate what each conversion is worth, and through your conversion rate what each visitor is worth to you and consequently how much you should be paying per thousand impressions. Sadly enough, too many advertisers initiate PPC campaigns without knowing what the end goal is. A word of caution: Traffic is not an end goal!

Start with the End in Mind

What is it that your PPC campaign needs to do for the business objectives? What Key Performance Indicators (KPIs) do you have in place for the measurement of the plan? There are many metrics to measure the effectiveness of a PPC campaign versus the effectiveness of your optimization. What’s the difference? PPC campaign effectiveness is judged by its impact on the company’s bottom line, and the return on investment. Campaign optimization is measured by an increase in CTR and improved quality score.

The goals of your PPC campaign should be those conversions that speak directly to the business objectives and business model of the company. When you begin to optimize your campaigns, it will become clear how measuring the effect of the PPC campaign on the business objectives, not performance metrics, is critical to improving ROI.

Next up, I’ll dive deeper into the PPC process in PPC Best Practices Part 2 of this 4 part series.