CTR or CPA? The Search Engine Marketing Dilemma

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CTR or CPA? The Search Engine Marketing Dilemma

Search marketing agencies from all over Europe meet at Google’s European headquarters in Dublin, to discuss and learn about the new features that Adwords will have in the coming months and, in turn, provide our opinion on how to improve the new interface and add tools that make life easier and easier. After almost a month, I’m still thinking about it. Among Philippines Mobile Database the many doubts and questions that arose, there was a common denominator to all of them, the CPA (Cost Per Action). While all the new features presented were aimed at how to improve in some way the CTR (Click Through Rate) of our campaigns, those present were trying to mentally translate these new innovations on the fly into a better CPA for our clients. Unfortunately none of us found a clear way out of this dilemma. Philippines Mobile Database

The pricing model of most SEM (Search Engine Marketing) platforms today is based on a CTR guided by a Quality Score, which looks to the past to determine how many clicks on impressions you have had, how relevant your ad is to to the search, how important is the destination site and how much the advertiser is willing to pay, among others. The Quality Score is precisely the parameter that sometimes allows you to pay less than the second advertiser for being in the first position and so on. This Quality Score pushes us, in a way, to achieve an optimal balance between clicks and position, being in most cases the first positions those that receive a higher Quality Score due to a greater number of clicks per impression.

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The dilemma begins when we add the CPA parameter and aim for our conversion rate to be as good as our CTR, while maintaining our Quality Score. It is then when we enter a world of infinity of variables that encompass the usability of the destination site, type of user, customs, brand offered…. The list is endless. In many cases, if not most, appearing in the first position can even be detrimental for many campaigns, since each Brother Cell Phone List word used plays its own game and each product to be advertised requires a different position strategy. Being the first to search is exposing yourself to a barrage of impulsive clicks that are not in all cases convertible into leads or sales. On several occasions we have seen how the best balance between cost and lead was between the third or fourth position. This phenomenon, of course, is not applicable to every advertiser and is the result of exhaustive optimization work.

Above all, we must never forget that each product has margins and therefore we must always seek the balance point that allows advertisers to scale their businesses, within an environment that is increasingly competitive and difficult as are the search engines. Google, among other search engines, has the challenge of getting back into the shoes of the final advertiser and refining an algorithm that to this day is the code fragment that reports the most benefits to a company in the world. When I mention “back”, I mean that Google has already made its attempts to introduce the CPA model in the past, having to later dismiss it. Measuring and analyzing the history on the Internet allows us to assume more risks every day and deliver more value to the advertiser for each euro invested. There is no doubt that the success of the CPA model is not exclusively attributable to advertising platforms, since it depends on a myriad of factors, but as some agencies assume more and more risks on behalf of our clients, we require predictive tools that accompany our cost per lead or sale model.

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