What is CTR? Understanding the Meaning of Click Through Rate

There are so many metrics that you should keep track of when monitoring your digital marketing campaign. Click through rate or CTR is one of the most important! You may be familiar with this term as it relates to PPC or pay per click, but what is CTR exactly and how can it be applied across different types of digital marketing?

What is CTR?

Let’s begin with what is CTR or click through rate. Click through rate is an advertising metric that is used to measure how many users clicked an advertisement, link, or call to action and went on to the landing page or website that was liked to that ad, link, or CTA.  
A click through rate measures the people who saw your ad and clicked on it. It does not measure the people who saw the ad and did not click but maybe landed on your site later as a result of seeing your ad.
Why is this metric so important? A high click through rate tells you that your ads, emails or website are performing well. This content is resonating with your target audience and your high CTR is basically giving you the green light to keep going. A low click through rate tells you that you need to change up your strategy. Something’s not quite right and your potential customers are not clicking. It could be the copy, the imagery or it could be that you are targeting the wrong audience. In short, you want to focus on having a high click through rate. The more clicks you can get, the higher your quality score and the lower your costs. We’ll talk more about quality score soon so keep reading! But before that, here are some interesting statistics first:

According to WordStream,

• The average CTR on Google Ads search network last 2018 is 3.17.
  
• The average CTR for PPC ads is only at 2%, however, for the top PPC ads, it reaches up to almost 8%.
  
• Dating and personal industry is where the highest average CTR lies. On the other hand, legal industry has the lowest CTR.
  

This is why you need to monitor your content, ads, and emails and pay attention to these metrics while doing so. It could save you a lot of money if you catch a mistake early on in your campaign.

What is CTR calculated?

How do we calculate this metric? Click through rate is calculated by taking the number of unique clicks your ad received divided by the number of impressions. Impressions are how many times your ad was shown. Don’t confuse impressions with reach. If you have a campaign where 10 users were reached 1 time and 1 was reached 4 times your reach would be 11 but your impressions would be 14. Your ad was shown 14 times but only reached 11 people.

What is CTR in PPC?

PPC or pay per click is a form of search engine marketing in which a business creates advertisements and then pays Google every time a user clicks on them. So what is CTR in regards to pay per click? Click through rate in a PPC campaign tells you how successful your ads are.
Facebook and Google assign each ad a quality score. This is a measurement of how well your ad is performing and how it relates to your objective and landing page. You want a high quality score so that you can achieve a better ad position and keep your costs down. If your ad is not getting a lot of clicks this means it is not relevant to your users and Facebook and Google will stop showing it to potential customers. This is when you will need to step back and look at your campaign in depth and ask yourself some questions. Are you targeting the appropriate audience? Is your ad copy resonating with your audience? Do you have an engaging photo?   
When running a PPC campaign there are two types of ads that you can choose between. They are search ads and display ads. You can also run both at the same time if you have the budget.
Search ads are probably what you think of when you think of PPC ad campaigns. They are the text ads that appear at the top and bottom of Google’s search results. They include two headings and a description as well as a link to the landing page you want customers to go to. Search ads also include an inconspicuous indication that they are indeed an advertisement. 

 
Check out this search advertisement for Nike. There is a clear title that it is the official store, there’s a nice description and there are direct links to some of their web pages. The “ad” part blends right in doesn’t it?
Display ads are also known as banner ads and appear on other sites when users are not searching for your product. This is kind of like an internet version of a billboard. Here is an example from the website Mashable. Active Campaign is currently running an advertisement on their site and it appears as a minimally invasive sidebar. While active campaign can also run text ads, this display ad is visually appealing and might catch a potential customers’ eye while they are surfing the web. 

 These two types of ads can work together to get potential customers to purchase your product. Let’s say your text ad shows up when someone is searching for red hats. They may click on your ad but maybe they don’t make a purchase. This is where display ads come in. You can run a similar ad on other sites and trigger that potential customer to come back and make a purchase on your site.

Can you spot the banner ads? As you can see, they aren’t taking over the page but if you were a potential customer surfing the web, you may not want to navigate away from the webpage you are viewing. The point of these ads is to get your brand in front of potential customers in hopes that they will recognize your brand in the future.
How does CTR differ between these two types of ads? Display advertisements typically have lower click through rates than search advertisements. Since people are not directly searching for something when they are on other websites, it’s normal for these click through rates to be lower. Running these ads together allows you to target potential customers from various angles. However, if you do choose to run both search and display ads, you will need to make separate campaigns. If your display ads are getting lower click through rates, it can really skew your data and make it difficult to determine your actual ROI.  

What is CTR in SEO?

Do you know how many people are organically clicking through to pages on your website? If you have Google Analytics set up you probably do. So how can click through rate impact your rankings in Google search results?
You can optimize your website to rank for specific keywords, adjust your titles and meta descriptions but the secret to SEO is to make sure all of your content is relevant so that you capture those clicks. The more customers that click through to your website the better. Google uses your click through rate as one of the factors they take into account when ranking your website in their search results. If you have a high organic click through rate this means more traffic is coming to your site. For example, if your page is ranking number three in Google’s search results but gets a high CTR, Google may move your page up higher because people are clearly interested in your page.
How can click through rate harm your SEO? If you are appearing in Google search for something that is unrelated to your business and people click on your page expecting one thing but get something completely different, this can result in a high bounce rate. If you are seeing a high click through rate but a low conversion rate, something is not syncing up. It could be that you are linking to the wrong page on your site or you have optimized your page for the wrong target keyword.
When it comes to search engine optimization, click through rate is important but it isn’t everything. Make sure your website is optimized for search engines and contains relevant information for your customers. Figuring out an SEO formula for your brand takes some time but putting the right keywords to work can mean great success for your business.

What is CTR in Facebook advertising?

Facebook advertising is a targeted way to marketing to your audience via one of the biggest social media channels out there. You can use demographics, location and interests to easily advertise to potential customers. Before you jump into advertising on Facebook, you should know how to navigate Facebook’s ads manager and the important metrics that you should keep track of.
Here is an example of Facebook ads Manager. You can manage your ads and create new ones, check your ad spend and see analytics. When you create an ad for Facebook you have the choice of several different objectives such as app installs, boosting posts, page likes, increasing engagement, or conversions just to name a few. 

What is CTR in Email Marketing?

All good emails have clickable links in them. All great emails have a call to action in them that can help measure the success of an email campaign. Most email API’s will show you a bunch of metrics and statistics after each campaign you send out. There’s an open rate which shows you how many people opened your email. This is great but how can you tell that they interacted with your email and didn’t just open it to get the notification on their phone to disappear? This is where click through rate comes in. If someone is clicking a link in your email it means that they are engaged with your content. They are curious and want to learn more about your product or service.
What is a “good” CTR? A good click through rate, like any other metric, varies from industry to industry.


 A study from Mailchimp revealed that retail has an average click through rate of 2.24%, government has an average click through rate of 3.65% and the restaurant industry has on average a 1.06% click through rate. As you can see with all of these incredibly different industries, the click through rates vary. In email marketing it can be helpful to compare your email campaigns to others in your industry. If you have a lower click through rate than your industry average, this may be an indication that there is something wrong. 

Here are two reports from two different email campaigns. As you can see there is a big difference in the click through rate for each of these campaigns. Monitoring your click through rate will help you determine how your individual email campaigns are doing. That’s great but what if you want to figure out the overall success of all of your emails put together? In order to do this you will have to dive into other metrics like bounce rates, unsubscribes and open rates.