Have you ever used keyword research tools to find out the search volume of your campaign…
…Only to find that your actual click volume is much, much lower after the campaign goes live? This can be a bit of a problem if you are planning on a $30k per month budget, and it turns out that click volume is only $3k per month. What do you say to your boss/client/stakeholders (as the case may be)?
Think about it… if you’ve done your keyword research, and your total campaign is expected to have about 1,000,000 searches per month, and your average CTR is 3%, can’t you expect about 30,000 clicks per month?
Well… no, actually.
Say you are bidding on the word “online games” (we’re not examining targeting here, just search volume). The word “online games” has about 16,000,000 estimated searches per month, and for the purposes of this example we’ll assume that this is an accurate estimate. At a 3% CTR, you should expect 480,000 clicks, right? Wrong!
You have to take into account that you probably aren’t going to reach all of these searchers. This estimated search volume is (probably) across all engines. Are you running a campaign in every engine? Probably not, and therefore you are not going to reach all of these searchers.
Second, are you using geotargeting in your campaign? (if not, why not?) If you are targeting only searchers in North America, your pool of potential searchers is smaller again. Targeting just Canadians? That’s a few fewer (and more targeted) people.
Third, you also have to look at your budget. Are you really going to be able to show an ad every time someone does a search for all your keywords? Or perhaps your daily budget is enough every day but Sunday, and so your ad is not shown for every search that day.
Here are the numbers:
Let’s keep this very simple and say you are running ads only on Google search (not the search network) for “online games”. You are targeting Canadians, and you have stacks of gold bars for your budget (i.e. your daily budget is enough to show your ad for every search, every day). You expect a 2% CTR and are prepared to pay $3 per click. Therefore you have requested (and received) a $975,000 budget per month, based on the high search volume.
Google has around a 50% share of the search market. That means that about 50% of our total search volume will have the opportunity to show your ad. So for your 16,000,000 total searches for “online games”, we can therefore assume that about 8,000,000 searches will be done on Google, which you are targeting.
Remember that those numbers are for a worldwide market of which North America counts for about 21.2% of people online. If we geotarget for North America, we should end up with about 1,696,000 searches for our ad to display on.
But you are targeting Canadians, and they number about 10.5% of the American population. That brings us to about 178,080 possible searches.
So if we assume you will have a 2% CTR, you can expect about 3,560 clicks per month at $3 CPC, for a total cost of about $10,680.
How do you explain the fact that you only spent about $11,000 when you gotapproval for $975,000? That’s quite a difference.
The final formula to find the click volume in advance ends up looking something like this:
Note, however, that this formula may not work for every campaign. In fact, it’s possible to see wide discrepancies between the numbers that are estimated using this formula, and the numbers that actually occur. This could be due to something simple, like ending up with a different CTR or CPC than you imagined. Or sometimes the keyword search volume can be culturally based – for example, people may be searching for an “apartment” in North America, but a “flat” in the U.K. Or perhaps search volume is higher on certain days, so your budget may not allow you to take advantage of as many ad displays on that day.
If you have any suggestions on how this formula can be improved, please let us know!
