What Is Click-Through Rate (CTR)?

Click-Through Rate, or CTR as it’s often referred to, is, by definition, “the average number of click-troughs per hundred ad impressions”. More often than not, you’ll find the CTR shown as a percentage. (For example, a pay-per-click ad that gets 1,000 impressions and 1 click would have a CTR of 0.1%.)

And, while CTR is definitely important in the world of digital business, it’s important to know what you’re really measuring and, of course, the limitations it has. One of the biggest limitations measuring CTR for ads has is that it’s impossible to tell how effective the impressions of your ad are. For example, while a person might not click your ad right away, they may come to your site at a later time because of that first impression, either clicking on an advertisement they see another day or remembering your ad and then organically coming to your site.

So, with that in mind, it’s more accurate to discuss CTR as the “measure of the immediate response to an ad”. It is definitely not the only and overall response to your ad, especially if you’re giving information about your business through your ad, such as your brand’s name, website, etc.

Of course, anyone who has been in digital business for a decent amount of time is already thinking about CTR’s next limitation – and it’s a big one. While it’s great to have an impressive CTR for an ad, the only way you can keep pumping your marketing budget into that ad spend is if those clicking visitors actually convert. That’s why, if you’re only tracking your CTR and ignoring your conversion rates, you’re most likely in for trouble. After all, having a great CTR doesn’t mean you’re actually making sales.

Does that mean that all of your focus should only go on conversion rates?

Absolutely not. Your CTR does matter, especially when it comes to how you rank with search engines – the higher your CTR is, the higher your page ranking will be.

So, what do you do with your CTR data?

The first thing is to understand that an ad with a high CTR is being found relevant, which means it’s showing up when people are searching for what you’re offering. If, however, you have an ad with a low CTR, then it’s not being found relevant, which means you need to change your ad strategy by either redesigning your ad and offer or showing up in a different search.

Wondering if you have a “good” CTR?

There really isn’t a magic CTR number because every niche and industry is so different. What’s awful for one company is going to make millions for another. Successful CTR rates are so variable for two reasons:

  1. The keywords you’re choosing to bid on. (Branded keywords will often have a double-digit CTR while generic keywords will be less than 1%.)
  2. The campaigns you have within a PPC account.

If you want to know whether or not your CTR is “good” for your industry, then the best way to know is to compare specifically to other competitors.

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