The Relationship between Google Ads (AdWords) CTR and Interaction Rate

As you get deeper into Google Ads, you’ll encounter more metrics and values, many of which can be hard to decipher from one another.

In this post, we’ll look at two such values — clickthrough rate and interaction rate.

On the surface, these seem like similar metrics, but there is a difference between AdWords CTR and interaction rate, and each has their uses in marketing analysis.

Let’s find out how you can use them.

It Begins With a Click

Clicks are the most basic indication of how well your ad is performing. If your ad is relevant to viewers, and engaging for your target audience, then it will probably earn more clicks.

With this being the case, your clickthrough rate (CTR) is a very valuable metric to keep an eye on as it tells you how engaging your ad is.

Google AdWords CTR is the total percentage of users that saw your ad and then clicked on it to visit your landing page or website. It’s calculated with the following formula:

Clicks ÷ Impressions = CTR

For example, if your ad receives 100 clicks and 1,000 impressions, then the CTR would be 10%.

The Relationship between Google AdWords CTR and Conversion Rate

There was a time when site traffic alone was a measure of success, but now that means almost nothing if you can’t turn those visitors into paying customers. People are less concerned about CTR now, and more focused on increasing their conversion rates.

A high AdWords CTR doesn’t guarantee more conversions, and there is even some speculation that it could be an inverse relationship. If your ad merely stirs up curiosity, it may attract lots of clicks, but no sales.

To ensure that clicks have a better chance of becoming conversions, you must optimize your clickthrough rate.

How to Optimize your Google AdWords Clickthrough Rate

Before launching your ad, consider the following aspects individually to make sure they are all working together to attract relevant, qualified users to click:

• Ad Copy — Have you included high-value keywords aligned with user intent?
• Headlines — Do they grab attention? Try adding power words to your headlines that evoke emotion or incite immediate action, like ‘exclusive’, ‘limited’, or ‘lifetime’.
• CTA — Avoid bland ‘click here’ phrases and opt for more compelling anchor text that instills curiosity among readers.

Remember that your AdWords CTR measures the proportion of people who arrived on your site after clicking your ad — it doesn’t include people who didn’t click the ad, but then visited your site through another channel later. The customer journey isn’t the same for everyone!

Because of this, we should view CTR as a way of measuring the immediate response to our ads. It is not the total response. One exception to this is an ad that doesn’t display any identifiable information about the destination, so in this case, the click rate is equal to the overall response rate.

But what happens when your ad doesn’t call for a click?

Well, this is where we bring in interactions.

What are Google AdWords Interactions?

The Interactions metric is the collective term that includes all possible ways that users can interact with your ad, from clicks to swipes, video views, calls and more. With the rise of video marketing and interactive technology, paid advertising is set to evolve to offer more dynamic ways of engaging audiences.

For that reason, interaction rate is rapidly becoming a more prominent metric that marketers need to keep a close eye on.

What is Google AdWords Interaction rate?

Similar to CTR, your AdWords Interaction Rate is the percentage of people that interact with your ad when they view it. You can calculate it with this formula:

Number of Interactions / Number of Times the Ad Was Displayed

This rate is helpful when you want to see how effective your ads are. If your ad received 500 impressions and 100 interactions, the AdWords interaction rate would be an impressive 20%.

What is Average cost?

Just as pay-per-click (PPC) managers must pay for the clicks their ads receive, you must also pay for interactions.

You can use the Average Cost metric to see the average amount you have paid for all user interactions with your ad.

Average Cost = Total cost of ads / total number of interactions

So, if your ad receives two interactions, one at US$0.50 and the other at US$0.30, the average cost would be US$0.40.

Average Cost = ($0.50 + $0.30) / 2 = US$0.40

How PPC Managers Can Analyze Google AdWords Interaction Rate

After you’ve been in advertising for a while, it’s rare that you are managing just a single campaign. More often than not, you will have several campaigns running with various objectives in mind.

This can get a little challenging to stay on top of, but you can make monitoring and analysis easier with cross-campaign performance columns.

What are Cross-Campaign Performance Columns?

As you may have figured out from the name, cross-campaign performance columns are a report that allows you to gauge the performance of several campaigns at once.

PPC managers can quickly get insights from their campaigns by using three columns:

• Interactions
• Interaction Rate
• Average Cost

These key metrics are presented for each campaign type, making it easy to can see the impact of your ads on the quest for your advertising goals.

The Key Benefit of the Google AdWords Interactions Column

Remember how interactions can include any type of engagement, including clicks or video views?

Well, let’s say you have two different ad campaigns for your hot new product. With one on the Search Network, it’s easy to measure its performance by tracking clicks. However, if your other campaign is on video, you will need to look at the number of video views you are receiving, rather than clicks.

In the report, the interactions column simply registers the most important user action for each campaign. That way, you can review the combined performance of your two campaigns in a single column, instead of having to include two separate columns for clicks and video views.

Google AdWords Interaction Rate is going to Become More Important

Clickthrough rate is still an important metric in paid advertising, but it may be losing ground. Video marketing will continue to be the dominant force in the next few years, and more marketers will opt for video content instead of simple text-based ads.

Due to this, the AdWords interaction rate will get more attention, as it gives a clearer picture of how people are engaging with your ads.

For now, it’s important not to get bogged down in a debate of clickthrough rate vs interaction rate. By working on developing more relevant, engaging ads, you can drive both the AdWords CTR and AdWords interaction rate up, which should translate to more conversions.