Click-through rate (CTR) is a metric to measure the percentage of clicks advertisers receive out of total ad impressions. “Impressions” refers to the number of times an ad is viewed.
How is the CTR calculated?
Click-through rate is calculated by dividing the clicks on a specific ad by the total impressions. The answer is the percentage of people who viewed your ad.
Click-Through Rate = (Total Clicks on Ad)/(Total Impressions)
Click-through rates can be calculated on paid search advertisements, SEO links, email links, display ads, and social ads, the list is endless.
What Is A Good Click-Through Rate for Your Business?
There isn’t exactly a “correct” answer for this question other than, “it depends.” Determining a good click-through rate is based on your business goals, what medium you are measuring, and specific campaign and ad goals. You don’t always want a high CTR, you want a high CTR on ads, keywords, emails, and links that are relevant to the end campaign and business goals. A good CTR can be determined when you are getting as many people as you can to click on the relevant ads and efforts.
But, the click-through rate is only measuring getting a visitor to your website or landing page, not how relevant your content is to what they are looking for, or what they were led to believe they will be seeing. The click-through rate is a measurement on how effective an ad is in getting visitors and users to your site, nothing past that point.
How Can Measuring & Analyzing CTRs Help Your Business?
First & foremost, the business and campaign goals must lead the measurement and analyzing piece of web analytics. Click-through rate comes into the measurement and analyzing spectrum when business goals align with driving customers to a website or specific content of a website. The click-through rate helps measure what is working to get customers there, and what ads are effective.
If the click-through rate measurement does align with business goals, analyzing the metric over a specified period of time across multiple ads is where business decisions come into play. What ads are working, what ads are not working, and the ads that are working what is making them work and differentiating them from the ads that are not as successful?
This doesn’t only pertain to ads, though. For example, in an ad campaign run across multiple social media sites the CTR can be used to measure which sites bring more success than others. Twitter vs. Facebook, where are your true customers and potential customers “hanging out” and spending their time? The click-through rate can help determine these answers.
But, the click-through rate is directly related to enhancing business because it helps test new ad formats, new placements, and new ideas. As well as, rid ads, placements, and ideas that are not driving traffic as expected.
Measuring and analyzing the click-through rate is useful, when used to measure goals that are directly related to click-through rate properties.
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