I’ve never realized the importance of CTR (Click Through Ratio) until I visited our team at Googleplex. At first glance, Google Adwords appears to be an auction where you simply say “Hey, I want to be as high on the page as possible. I will pay up to $4.00 for that click. Here are the

Google Adwords

keywords I’d like to show up on.”

This common misconception is untrue. Google makes billions of dollars from Pay Per Click Advertising, but in the end their main concern is quality results for the user. This is where CTR comes in.

Click Through Ratio (CTR) Explained:

If you want to go scientific, you can read about it on Wikipedia. In a nutshell, here is Wikipedia’s definition:

Clickthrough rate (CTR) is a way of measuring the success of an online advertising campaign for a particular website. The clickthrough rate of an advertisement is defined as the number of clicks on an ad divided by the number of times the ad is shown (impressions), expressed as a percentage. For example, if a banner ad is delivered 100 times (100 impressions) and receives one click, then the clickthrough rate for the advertisement would be 1%.

The higher your campaign’s click through ratio is, the cheaper Google will give you the click for. Plus, you will actually get a cheaper cost per click. In other words, you can be in the number 2 spot and pay $2.00 for the click, and the guy at number 3 can pay $4.00.

Our team at Google tells us that any campaign with a 1% CTR or higher is successful in their eyes, but our mature accounts are seeing triple that number. Take a look at this car dealer’s Google Adwords Campaign:

Most dealers would pay over $4.00 for these clicks. Thanks To A High CTR, they only pay $2.36

***It’s important to note that we DO NOT bid on your dealer name. Many companies will do that to inflate their Click Through Ratios. Car Dealer PPC companies that offer phone tracking take advantage of bidding on your name as well. They are taking the credit from other sources, and many of the calls are service related. If your dealership can’t rank first on your dealer name, you have some serious issues that need to be addressed.

Google Display Network Image Ads

Example AdLogic Ad

Note how low the CTR is for the AdLogic Display Campaign. This is because these are banner ads that follow your customer around during their buying phase. I love these ads for the branding, and in this case I like a low CTR. Why? It’s simple, I want as many impressions as possible so my potential customer sees my vehicles and logo over and over again as they enter their research phase. You will not get over 2,000,000 impressions on websites like YouTube, MotorTrend, LemonFree and more for $4,352.17. If you do the math, you’re paying only 0.00202689819845 cents per impression. The example on the right shows an ad from Planet Dodge in Miami Florida. This is the closest car dealer to where I live, so I see these ads all over the place…..in 8 different sizes.

This is why the owner of Park Auto Mall in Tampa Bay Florida (our first customer) loves our product. When he asks his customer how they found him, they say “I see your ads all over the place”. We manage this dealer’s entire digital presence, that’s why they get over 18,000 legitimate visitors to their website every month. This is just an independent dealer, with no OEM help. I have access to the Google Analytics of almost 300 dealers nationwide, and nobody in the nation comes close to that. We use absolutely no print or radio, just a unique blend of TV, Google, YouTube, AutoTrader and Cars.com. Thanks to our own software, we are able to track original lead sources unlike anything out there.

The Unimportance Of Bounce Rate In The Car Business

Remember this, we are selling cars online. Not CD’s or T-Shirts. Just because your ad shows up first doesn’t mean somebody will submit a lead or call you. This is a very expensive purchase for anybody, and they will look at other sources before deciding who to do business with.

Our software tracks everybody, and one of the most important things we found was that people will click to your site, look at the price then leave. They will eventually come back by Googling your dealer name. Go ahead and look at your Google Analytics. Your number one keyword source is your dealer name right? This is why, and it applies to all digital advertising. Unless you ask the right questions when Mr Customer is in your store you will never be able to track this metric.

The only bounce rate I look at is the homepage bounce rate, not deep pages. That is obviously important. If your homepage bounce rate is over 20% you have some serious navigational issues on your website. The bounce rate of Park Auto Mall for January 2012 was only 13.39%.

Quality Scores

Google gives each ad a quality score. There are many factors involved, but the most important is the landing page of the ad. If the keywords you’re bidding on aren’t prominent on the page your account will suffer with poor placements and very high cost per clicks. We have proven that linking directly to the vehicle detail page is better than linking to a search page.

To satisfy some naive dealers, we can send traffic to the search page so Mr Customer has to click again to see the vehicle detail page. This will lower the bounce rate, but is it worth it? You’ll pay more for the click.

Our Google Adwords Tool Is Getting Better

Call Matt Weinberg at 561.926.0455

We have data from over 1 Billion impressions and over 3,000,000 clicks. Every night, all our campaigns are updated with negative keyword data for both our search and image ad campaigns. With this valuable data, we now know what the best and the worst converting keywords are in the automotive industry. Showroom Logic is also enabling a whitelist of premium websites to display our image ads on. Call Matt Weinberg to schedule a demo of our amazing product at 561.926.0455.