The speaker [Jon Kelly, Surehits] at a SES NY 2008 Session basically went over all of the basics- CTR is normalized by position, account history considerations, landing page quality, everything we’ve heard before. The biggest takeaway from his presentation was an interesting metric that he reviews when evaluating ad effectiveness: “Total Throughput.” This metric is calculated by multiplying Clickthrough Rate and Conversion Rate. It’s a pretty interesting concept, because not all ads that with a high CTR are necessarily good. If you have “Free iPod” in your ad, it will probably give you a solid CTR, but there’s a good chance that it won’t convert.
Keyword A has a 3.5% CTR and a .75% CR, it’s Total Throughput will be .03%
Keyword B has a 2.5% CTR and a 1.8% CR, it’s Total Throughput will be .05%
This would show that Keyword B is actually a more effective ad(from an ROI standpoint) because it has a higher TT(Total Throughput).
Not sure about the term “Total Throughput” and the metric might be a little too small to get your head around, but I think the logic behind it is absolutely valid.
ChannelAdvisor’s SearchAdvisor is closing in on integrating Creative ROI into the software, so this metric will be available(via offline calculation) shortly.
written by Andrew Belsky — andrew.belsky at channeladvisor.com