What is Click-through Rate (CTR)?

What is CTR?

Now working through virtually every possible channel, marketers now have more ads and campaigns to track than ever. Having accurate, informative data is key for growing successful campaigns and refining a marketing strategy to better engage a brand’s target audience. Click-through rate represents the ratio of views to clicks on a particular ad or link, whether it was published on a search engine results page, a display ad network, or a social media platform.

Because it measures an action rather than an impression, CTR can be a strong indicator of how well an ad is grabbing users’ attention and keeping it long enough to inspire potential buying interest. Achieving a high click-through rate is always among the key objectives for any campaign. However, it’s worth noting that generally speaking, click-through rates will be quite low for almost any type of business—digital advertising is so ubiquitous on the Internet in today’s world that users are nearly blind to them. It’s not uncommon for the CTR on an ad to be below one percent for display ads.

What’s a good CTR?

As of 2018, the average CTR for display ads, which are placed on websites across the internet, was 0.35%. The average CTR for search ads (which appear on search engine results pages through platforms such as Google Ads) is slightly higher at 1.91%.

However, what makes a good click-through rate is highly dependent on your industry, niche and level of spending.

How do you calculate CTR?

Calculating your click-through rate on a given ad is simple. Divide the number of clicks by the number of total impressions in the same time period and you have your CTR for that ad.

Clicks / Impressions = CTR

Digital marketing platforms such as AdRoll’s make it easy to find the CTR of any ad or campaign in your marketing ecosystem.

Click-through rate is sometimes confused with conversion rate, a different metric that measures the percentage of click-throughs that turned into a conversion (usually a sale).

Why is click-through rate important in marketing?

CTR is a metric that represents the portion of web viewers whom your ads convinced to take a concrete action—much more valuable than an impression. While some digital marketing campaigns are designed specifically only to create brand awareness and develop recognition among a target audience, marketers usually want consumers to click their ads and visit their website, potentially to make a purchase. Click-through rate gives you a rough idea of how attention-grabbing your ads are, and can tell you whether your ads are connecting with your intended audience.

However, CTR does have limitations. For example, CTR cannot tell you much about a user’s intent when they click on your ads, and by itself does not indicate how effective an ad is at spurring customers to purchase. Click-through rate can give you an idea of whether an ad captures users’ attention, but it doesn’t explain why they clicked or what it is about your brand or advertising that connected with them.

Examples of how CTR is used in marketing

A basic example of how to use CTR by itself would be a marketer reviewing a basic search ad campaign for how well it gets users to click and visit the brand’s website. Comparing their CTR to the average click-through rate of the brand’s industry, the marketer might find that a particular ad doesn’t seem to be effective and is performing below average. Knowing that, the marketer could remove that ad and focus the remainder of their spending and resources for the campaign on ads that work better. The marketer might also use CTR to adjust the creative for an ad—images, headlines, copy, and calls-to-action (CTAs). All of these variables can influence a user’s decision to click.

As we noted above, click-through rate by itself is very limited in the depth of insight it can provide. To make CTR more useful, marketers often use it in tandem with other metrics such as conversion rate. For example, a marketer might analyze a campaign for both metrics and determine that while an ad seems effective at getting people on the website, those users don’t seem to be converting into sales. This would be a useful piece of information, as it could suggest that the website isn’t aligned in its messaging with the ads being clicked, and users are bouncing from the website when they realize the mismatch.

Conclusion

While CTR may not be a comprehensive metric for analyzing and understanding ad performance, it can be very useful in making decisions about future campaigns and refining existing ads to better attract customers. Used in combination with other metrics, click-through rate can help marketers build better campaigns, craft more compelling creative assets, and generate more sales.