CTR (Click-Through Rate)
Contents
Definition
The click-through rate, abbreviated CTR, refers to the percentage of clicks an online advertisement receives. To be more precise, it is the relation between ad impressions and actual clicks. It is an important performance indicator for search engine optimization and online marketing in addition to other metrics such as conversion rates. In general, CTR is very suitable for measuring the success of online ads, especially over a longer period of time.
Many criteria can influence your click rate - from ad format or industry to your target group or website. Although this makes comparison difficult, your CTR is still useful for evaluating your ad campaigns. For example, a very low CTR indicates that you need to make an adjustment because your ad is not convincing enough or the placement is simply wrong.
The click-through rate is very important for marketing because it helps to assess which ads or keywords are successful and where you need to improve. If you’re running a Google Ads campaign, your CTR in search results is important for the quality score of your ads.
Calculating the CTR
The CTR describes how many people clicked your ad compared to the total number of impressions, i.e. the total number of people who saw the ad.
As shown in the illustration, it can be calculated by dividing the number of clicks by the impressions and multiplying the result by 100 percent.
A simple example: 2,000 visitors saw a banner advertisement, 30 of them clicked on it. Thus, the click-through rate is 1.5% (30 / 2,000 x 100%). In email marketing, it works the same way: a sales newsletter is sent to 10,000 people and 100 of them click on the contained link. The click-through rate would be 1% (100 / 10,000 x 100%).
In order to get meaningful results, however, you need a high number of impressions. If in a single day one of only three visitors clicks on an advertising banner, the click rate would be very high at 33%, but this value would not be significant due to the low number of total visitors.
People often ask how high the average click rate is. This question cannot be answered easily as there is simply no average CTR. It varies depending on the platform, medium, and content.
Importance of the click-through rate in online marketing
A high click-through rate should not be the ultimate goal of your ad campaign as it’s equally important to achieve a high conversion rate. The conversion rate provides information on how many of an ad’s viewers can be converted into customers, for example, A click on the corresponding ad is a prerequisite for this. Therefore, both figures must be considered at the same time and put in relation to each other if you want to make a statement about a campaign's relevance and success.
In search engine advertising, for example with Google Ads, the click rate in the search engine result pages (SERPs) plays an important role. It shows how many times an ad was actually clicked in the search results. If 50 users search for a specific keyword and five of them click on the ad, the SERPs CTR is ten percent. In this context, the return-to-SERP rate is also interesting. It indicates how many users returned to Google after visiting a landing page.
Click rates also play an important role in affiliate marketing. The more clicks on an affiliate link, the higher the probability that users are converted into buyers, thus yielding financial benefits for affiliates. If your CTR and conversion rate are extremely different, you should look for reasons. For example, if an online shop's ad thematically fits the target group, it generates a high click-through rate. But this alone does not guarantee that many purchases will follow. If the offer or pricing of the products does not match the target group's taste or income, they probably won’t buy. The conversion rate thus reveals how well an ad is actually tailored to the users' needs.
Although the click-through rate is an important performance indicator, it is less suitable for comparing different platforms. The reason for this is that it strongly depends on the ad format, industry, target group, or campaign. Nevertheless, the click rate is a good way to monitor a campaign's development over time and compare it with current campaigns of the same type.
Ways to improve your click-through rate
You have various ways to increase the number of clicks you receive. However, you should always keep in mind that an increased CTR only makes sense if it comes along with a high conversion rate.
Some ways to improve your click rate are:
- Creating individual ads that are tailored to different user groups (gender, age, social status, etc.).
- Advertisements on thematically related and target group-specific websites instead of general websites
- Comparing different ad formats (size, placement, etc.) and banner content and making adjustments
- Retargeting to reactivate users through appropriate ads
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