Click-through rate or CTR is the ratio of users who click on a link over the number of users that view a page, email, or ad. In other words, from the people that view an ad or web page because it reached them, how many of them choose to engage with the content by clicking on a link or button?
Marketers use CTR to measure the success of digital ad campaigns, such as for a website. It can also be used for email campaigns, such as a newsletter.
The question always is, how many users clicked on my content?
Click-through rate can be significant in helping to determine what ads or pages of a site to invest in. Businesses can frequently display the ads with a higher click-through rate and perhaps disable the ones with a lower one.
But that aside, how can CTR help improve marketing tactics?
Why Click-Through Rate Matters
The purpose of click-through rates is to measure the number of clicks to impressions of a digital ad or email marketing campaign. Typically, a higher CTR means that the campaign is effective and successful in reaching people.
You should note that high click-through rates lead to high-quality scores, which in turn, allow you to maintain or improve ad position for lower costs.
Besides, most ads and sites are crafted to trigger some sort of reaction within the user, whether that be to make a purchase or just click a button. These actions are what determine the reach of your online content.
So, by measuring the click-through rate, marketers can understand what people are choosing to engage with the most and then analyze the why of it. What’s more, in some cases, clicks equal direct conversions or sales, so CTR can also act as a direct measure of marketing success.
Calculating Click-Through Rate
Here’s how you can calculate the CTR of a particular ad (such as a banner ad on your business website) or some other piece of content:
(Total Clicks on Ad) / (Total Impressions) = Click-Through Rate
For instance, the PPC click-through rate refers to the rate at which viewers click on your PPC ads. In other words, it’s the percentage of people who view your ad (impressions) and then engage with the ad (clicks). The resulting formula of CTR is to divide total clicks by total impressions.
What’s A Good CTR?
So the question comes down to what’s a good CTR? In other words, what should you be aiming for?
Business owners and website hosts ask this question all the time.
And the honest answer is that it depends.
Here’s what it depends on:
Your industry or niche (How big is the market?)
The set of keywords you choose (Are they relevant and unique?)
Individual campaigns within a PPC (pay-per-click) account
So, it isn’t uncommon to see double-digit CTRs in booming industries or branded keywords, i.e., when someone is searching for your brand name or trademarked product.
But for some non-branded keywords, a CTR of 1% can be good. It all depends on the number of people searching the CPA.
Overall, CTR is a fair measure of how well your online ads (or content) are performing in digital spaces and the success rate of your marketing campaigns. The higher the number of clicks on something, the more engagement it generates from people, which means a higher chance of eventual conversions.
You should remember not to focus too much on arbitrary numbers and more on your community’s response to your brand. If your sales are rising even with a low CTR, perhaps your brand attracts consumers from another channel.