What do I need to know about ‘CTR’?
You want to know what CTR, well it means Click Through Rate. When it comes to online advertising, there are a number of ways to measure your success. It isn’t just about how much money you make; the number of customers who click on a link or view a webpage can also indicate how well your adverts are resonating with your target market. In turn, this can help you to reshape your marketing strategies in order to enjoy higher conversion rates and greater profits.
‘Click-through rate (CTR)’ is the ratio of web users who see an advertisement and end up clicking on it. To calculate your CTR, you would take the number of clicks that your ad receives divided by how many times the ad is shown (i.e. how many ‘impressions’ it has). This figure would then be transferred into a percentage to give you your CTR.
Let’s say that your ad receives 20 clicks, with 400 potential customers having seen it. To calculate your CTR, you would divide 20 by 400, giving you a result of 0.05 (5%).
Naturally, having a high CTR is an excellent sign of success for an advertisement. It would show that users find your ad relevant and useful. A low CTR, on the other hand, would suggest that you would need to rethink your ad in terms of factors like:
- Ad location
- Target audience
- Ad design
- Ad copy
- Ad ranking
Having a high CTR will also help you with costs. A high CTR will boost your ‘Quality Score’, which will tell services like Google Adwords that your advertisement is highly relevant for your chosen keywords and target market. This can help you to maintain your ad’s position in the search results for these keywords while at the same time allowing you to enjoy discounts.
While having a high CTR is a great sign of an ad’s quality and success, it won’t always be something you want to aim for. For example, having a high CTR for an irrelevant keyword would be a waste of time and money, as it wouldn’t help to generate sales, brand awareness, and so on.
If you are investing in PPC for your ads, it is important to remember that you will be paying for every click. If you have to pay for clicks for keywords that are irrelevant, you will be wasting money even if your CTR increases.
The same can be said for particularly popular keywords, which may be so expensive that any profits generated from clicks will not justify the expenditure.
In other words, it isn’t just about having a high CTR, but having a high CTR with the right keywords.