Click-Through Rate (CTR) is an online term used to analyse the ratio of users who click a specific hyperlink.
CTRs are calculated by measuring clicks against impressions. Clicks are when a user opens the target URL through the hyperlink, banner image, or advert. Impressions are quite literally the number of times that the advert or links appear on screens.
The formula is quite simply:
- Total Clicks / Total Impressions = CTR
CTRs are most commonly used for paid advertising campaigns. Prices on PPC advertising platforms like AdWords can vary. Therefore, it’s important that those adverts are built to generate the best level of response. Otherwise, marketing budgets won’t be utilised to their full potential.
Whether it’s a text advert or an image banner doesn’t matter too much. They can be targeted to any website, so PPC can be used by every website owner. Moreover, CTR tracking is an included feature provided by AdWords (or whatever platform is being used).
By measuring those ratios, advertisers and web owners can track the success of individual campaigns and pages. It admittedly isn’t the only metric that requires careful consideration. After all, campaign successes can be influenced by demographics and target audiences.
Still, CTR tracking can encourage a greater control of marketing budget. It can also help direct organic traffic methods also.
Benefits of monitoring Click-Through Rates:
- It’s a great way to see where traffic is coming from.
- Users can measure the success of individual campaigns to see what is and isn’t working. This can result in making sure future investments are made on the right campaigns.
- It offers a chance to gain an insight into what platforms (AdWords, social media, etc.) are generating the best responses.
- CTRs offer a clear insight where other metrics can be open to interpretation.
- Many platforms will tell users where they are seeing the biggest waste.
- You don’t need any additional paid software.
What is a good CTR?
Monitoring the CTRs of individual campaigns is one thing. But understanding whether the ratio is suitable or not is another altogether. Quite frankly, there is no one right answer.
The very first PPC adverts could receive CTRs of 40%, but that’s virtually unheard of nowadays. The online audience has evolved while advertising is far more commonplace in today’s market too. Not only because there are more websites, but also because the average modern site leaves more space for those adverts too.
Click-through rates will inevitably fluctuate between ads, keywords, and platforms. However, anything above 2% is generally believed to be a fairly good return. Ultimately, if those adverts are generating a positive result for the website, the CTR rate is fine. Having said that, measuring them still affords the chance for tweaks and improvements.
The best advice is to always enter this arena with an open mind. Rather than going with gut instincts, try running multiple PPC campaigns. With suitable CTR tracking, you’ll pinpoint the best and worst methods in next to no time.