Understanding Click Through Rate on Amazon Factors Affecting CTR and how you can Improve CTR Performance

What is Amazon Click Through Rate (CTR)?

(CTR) is a fundamental component of any PPC Campaign and is a metric that all Amazon sellers should understand and monitor as it directly relates to ad spend. Implementing strategies to improve CTR not only results in higher conversion rates but also leads to increased sales and higher profitability.

Measured as a percentage, CTR is the ratio of clicks on an ad to the number of impressions. It is a “real” indicator of the volume of traffic to a product detail page. CTR can be measured at the product, campaign, ad group or keyword level and allows you to gain insight into how your ads are performing.

What is a good CTR on Amazon?

CTR represents relevance and buyer engagement. A high CTR is indicative of keyword relevance and an attractive product ad. A general guideline of a good CTR on Amazon is 0.5% or above, however, a well-optimized, targeted campaign can achieve CTRs of above 2%.?

Factors that affect CTR?

With relevance and buyer engagement in mind, Amazon CTR performance is a balance between an optimized advertising strategy and a quality product listing. The purpose of a PPC campaign strategy is to drive traffic to a product listing. Driving relevant traffic to the target audience and presenting a quality listing weighs heavily on CTR.

1. Amazon PPC

Ad Placement

??????It is plausible that ad position may be the main factor affecting CTR. Based on buyer behavior, ads located at the top of a search page receive more clicks, and therefore have a higher CTR, than those located in the rest of search or product pages.

Keyword Relevance

Tightly focused, highly relevant keywords are more effective at matching an ad to a customer search term than broader, more generic keywords. The more relevant the keyword, the higher the CTR. The most relevant keywords are those that incorporate the sellers brand name. Branded keyword campaigns produce the most notable?CTR percentage. Additionally, targeting a seller's own branded ASINs converts to a higher CTR.

Campaign Ad Type

The PPC ad types - Sponsored Product, Sponsored Brand and Sponsored Display - have an impact on the CTR. As a general rule, sponsored product ads have a higher CTR than sponsored brand or sponsored display. Indistinguishable to most buyers, sponsored product ads appear organic and are more likely to be clicked than sponsored brand or sponsored display ads.

Keyword Match Type

Exact match, targets highly relevant keywords, and therefore delivers the highest click through rate of all the match types. Broad match, while producing the most exposure, is the least relevant match type and typically produces low CTR values. Phrase match performs somewhere in the middle of the two. Best practice is to use any converting search terms as exact match KW targets.

2. Listing Quality

Main Image

??????The product image that appears in the search results, the main image, is the biggest determining factor for a buyer to click. A buyer will commit to a click if they perceive the product to be of high quality and value for money. Professional, vivid images produce

Consumer confidence and result in higher CTRs.

KW Relevant Title

With relevance being a big factor in CTR performance, a relevant title, emphasizing the main keyword is key to receiving customer clicks. Customers will justifiably click on a product listing that is not only relevant to their search but also highlights the features and benefits of the product.

Pricing

Price is a major factor in determining if a buyer chooses to click on a product ad and ultimately make a purchase. A price point that is significantly lower than competitors will appear inferior and of low quality while a significantly higher price point will simply be overlooked. Offering a competitive price, while still remaining profitable, will receive more clicks and result in a higher CTR.

Reviews and Seller Badges

Positive reviews and seller badges are social proof of high quality, trusted products and brands. Product ads displaying higher reviews than a competing product will always receive more clicks and have a higher CTR. Seller badges not only visually catch buyers' attention but provide buyer trust.

Fulfillment Method

More than 50% of shoppers on Amazon are Prime members, so it goes without saying that product ads offering fulfillment by Amazon (FBA) will receive more clicks than those offering fulfilled by merchants. With many shoppers using filtered search results for Prime Only and opting for free, fast shipping, FBA not only produces a better customer experience but increased CTRs.

How to improve CTR?

1. PPC optimized campaign strategy - monitoring and optimizing your CTR at the campaign and keyword level to perform with high relevancy and maximum buyer clicks

●?Set campaign bid adjustments for top of search placements

●?Test with all ad types but commit 80% of spending budget to sponsored products that have a higher CTR

●?Discover converting keywords and launch in new exact, broad, and phrase campaigns

●?Optimize bids to place higher in search term results

●?Launch campaigns that contain highly relevant, focused keywords to closely target customer search terms

●?Run narrowly targeted ads for long tail keywords?and brand-specific terms

●?Negate irrelevant or generic keywords with high impressions and few or no clicks

2. Quality product listing - create a professional, customer-engaging product listing that stands out from your competitors

●?Present with a professional, appealing main image to capture buyers' attention. A/B split test main images to determine optimal customer engagement

●?Perform keyword research and offer a compelling title that includes the main relevant keyword and highlights the benefits and features of the product

●?Conduct competitor research to ensure you are offering a competitive price

●?With customer experience in mind, create a great offering aimed at positive reviews and address any negative reviews with the aim of earning best seller badges

●?Offer FBA

Final Thoughts

Amazon click-through rate is a key performance metric that you can monitor to effectively measure the relevancy of traffic driven to a product listing. Taking actionable steps to increase your CLR reduces ad spend and increases both sales and profits. A high CTR indicates a high volume of traffic which is indexed by the algorithm to improve product rank, leading to more conversions and positively impacting your overall business performance.

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