Why don't your ads work? Key metrics: CTR, CPC, CR
The advertising campaign has been launched, you are carefully monitoring budgets and following all recommendations. At first glance, the advertising seems well thought out, the targeting appears to be accurate, and the audience has been selected according to all the rules. But there are no more customers, no new orders, even though it feels like the campaign should be working. Why is this happening?
In such situations, most marketers and business owners start digging into the details. Some blame the advertising agency and the targeting specialist, some blame the website, some stop the campaign or, on the contrary, play with the budget like a gambler. And again, they look for someone to blame. But often the problem is deeper, according to the experts at Betonlogos company.
One metric is not enough
One of the most popular metrics in the world of digital marketing is click-through rate (CTR). This is the percentage of users who clicked on an ad. CTR seems simple and logical: the higher it is, the better the ad works. But a high CTR alone does not guarantee leads or sales. It is only the first step in the funnel.
A low CTR is a warning sign. Even if the CTR is good, it does not guarantee orders and sales. It is important that the user not only clicks, but also performs the desired action.
Three key metrics that determine everything
To understand why advertising is not delivering the expected results, you need to analyse three key interrelated indicators in combination:
- CTR (Click-Through Rate) — how attractive the advertisement is.
- CPC (Cost per Click) — how much each click costs.
- CR (Conversion Rate) — how many users place an order after clicking.
These metrics work as a system, according to Betonlogos marketing managers. A 10% increase in any of these indicators will lead to an approximately 10% increase in the number of applications. Why? This is because all indicators in the funnel are interconnected, and a change in one affects the others. The growth of each indicator multiplies the overall result, rather than simply adding to it.
You can set up your advertising according to all the rules, but if the creative doesn't grab attention, your ad will get lost in the flood of information. Banners will go unnoticed, CTR will drop, and the price per click will rise.
Many factors influence the effectiveness of campaigns:
- creative quality
- audience relevance
- accuracy of settings
- offer to the user
- website or landing page performance
To understand where exactly the sales funnel is failing, you need to analyse the numbers.
Advertising campaign effectiveness
To avoid searching for problems blindly, it is useful to focus on industry averages. Of course, the figures can vary greatly depending on the niche, region, and ad format, but each channel has its own ‘realistic’ benchmarks.
What is a ‘good indicator’ for different channels?
Google Search
Search advertising is the most ‘hot’. This advertising format has a higher CTR than others, as users are looking for a solution and enter the query themselves.
- CTR: from 5%
- CPC: £1–2 (up to £30 in highly competitive niches)
- CR: 3–5%, sometimes higher in eCommerce
Media advertising
Search engines help place advertising banners on partner websites. Here, the metrics will be much lower than in search. Most often, it is not direct response that works, but brand awareness and remarketing.
- CTR: about 0.5%
- CPC: $0.2–0.7
- CR: 0.3–1%
Social media involves working with a ‘cool’ audience. It is important to understand that not all people who see an advertisement are looking for the advertised product. Targeting is basically aimed at those who may be potentially interested in the product.
- CTR: from 0.5%
- CPC: $0.3–1.5
- CR: 0.7–2%
Targeted advertising on social media
Email newsletters are aimed at retaining existing customers. Here, warming up and the accuracy of the offer are important.
- CTR: 2–5%
- CPC: conditional (you pay for the newsletter itself, not for clicks)
- CR: 1–5%, if the database is loyal
Email newsletters
Let's imagine the following situation: an advertising campaign is underway, users see the ad, they are interested, they go to the website, the CTR is not bad, but there are still no applications.
What next?
- If the CTR is low, the problem lies in the creative or targeting. The ad simply does not attract the attention of the target audience.
- If the CPC is too high, it means you are overpaying for clicks, possibly due to a poorly configured auction strategy or high competition. You either don't get impressions because your bids are too low, or you spend too much on clicks without the desired result.
- If the CR is low, the landing page is not working or the offer does not meet user expectations. The person clicked through but was not interested.
It is a mistake to try to fix everything at once. It is much more effective to work with the metrics one at a time. And not just once, but regularly. This is a systematic process.
Where to look for the weak link?
Advertising optimisation is not about finding a magic button. It is a step-by-step, painstaking process: first CTR, then CPC, then CR. Or vice versa, depending on the weak link. There is no such thing as a perfect CTR or a top-secret offer that always works.
Every business has its own nuances. Advertisements and user responses will need to be analysed, refined and modified in context, and ideas tested. Betonlogos Czech Republic recommends that partners and customers add new product queries (keywords) to their advertising campaign settings, filter out negative keywords, and monitor bids. Consistently test and improve each metric: CTR, CPC, CR.
If you want more requests, don't focus on just one indicator. Work with the system. Then the growth in requests will not be a one-off, but constant and manageable.
Conclusion: growth is not an explosion, but a strategy
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