AdWords Hypothetical Formula

Posted: May 16, 2004

As usual, I was over analyzing a few data trends and got to wondering if there is a formula which could be applied to ads to determine CTR of people who would click on an ad.

This is total speculation, and yet another long post, so not sure if people will want to participate or not, but found the topic intriguing (could be that Psyche major kicking in). Feel free to disagree, would like to see others opinions.

I’m sure I missed a factor or 3, so please add more factors that I’ve missed. Of course, every factor can’t be accounted for, but the major ones can be.

In order, would you agree that the rate is determined by:

1. Ad Position - no matter how good your copy, this is going to be the major factor.
2. Relevant Keyword (I’m sure there will be disagreement that this should be #1, but I’ve just seen too many unrelated KWs in the top positions get decent CTRs).
3. Title.
4. Competiting ads near yours - makes your ad look better or worse (or every ad looks the same).
5. Branding - have they heard of/done business with you before?
6. Total number of ads
7. Description
8. URL

Is there a major factor I missed?

Now for numbers, the reason someone clicked on your ad, which is total speculation.
1. Premium Position: 5%
2. Position: 30%
3. Relevant keyword: 25%
4. Title: 15%
5. Branding: 10%
6. Description: 10%
7. URL: 5%

Other factors:
Competition: +/- 25%
Total ads: +/- 15%

So, if your ad was:
1. Premium Position, 2nd place: 2.5%
2. Number 2 position: 25%
3. Keyword very closely related: 20%
4. Very Good title: 10%
5. They’ve seen your banners: 3%
6. Average description: 4%
7. URL: Included /Folder relating to description: 2%.
Excellent competition: -20%
Full 8 ads on page: -15%.

Would 31.5% of people who would click on an ad, click on your ad?

This can be taken even further, as the recent study byiProspect (I consider this data very speculative, but useful for this formula) determined that 27.7% of G searchers clicked on an ad.

So, 27.7% of 31.5% is 8.72%.
Would the above ad gather an 8.72 CTR rate?

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