Any SEM professional will tell you that it’s important to maximize the click thru rate of your PPC campaigns. I often explain this in the context of Google (and other search engines) striving to make the results more relevant for their end users – the searching public.

However there is a more fundamental reason. By using the CTR in determining the placement of adverts, Google also maximises its revenue in a given time period.

Compare these bids:

• Client A bids $1.00 and has a CTR of 2%. If Client A’s advert is served 1000 times then the total revenue is $20
• Client B bids 50c and has a CTR of 5%. If Client B’s advert is served 1000 times then the total revenue is $25

You can see from Google’s revenue perspective its better to serve Client B’s adverts more often and in higher positions, even though the bid is lower!

Relevancy! Relevancy! Relevancy!