Click-through rate (CTR) is the ratio of users who click on a specific link to the number of total users who view a page, email, or advertisement. It is commonly used to measure the success of an online advertising campaign for a particular website as well as the effectiveness of email campaigns.
While Wikipedia does a good job of explaining what click-through-rate (CTR) means, it doesn’t really explain why it is potentially one of the most important factors in a Digital Marketing campaign.
Let’s start by looking at how CTR is formulated:
THE CLICK-THROUGH-RATE FORMULA
CTR = Click-Through-Rate
Total number of clicks = How many times your advert has been clicked on
Total number of Impressions = How many times your advert has been seen and had the potential to be clicked on
x 100 = CTR is displayed as a percentage e.g. “X% of people who saw your advert clicked on it”
What this formula is showing is that CTR is a great indicator for Relevancy because it’s showing you how many people found what you had to say appealing enough to click through to your website.
(And if you’ve read my blog post “No.1 On Your AdWords To Do List” then you’ll know that Digital Marketing is all about being Relevant!)
WHAT DOES A HIGH CTR MEAN FOR ME?
- MINIMALISE WASTED CLICKS
The more relevant you can be the more you can guarantee that every click on your ad is a genuine lead that has potential to purchase your product or service. If you are running ads that aren’t relevant but people click on them in error, not only will you pay for a click that will never become a customer but you may waste time trying to sell to that customer that isn’t looking for what you’re selling!
- SPEND LESS
When you’re being ultra-relevant you would expect less clicks. I know it seems backwards but less clicks is a good thing! You don’t want hundreds of clicks if only 1% of them are actually looking for what you’re selling. Just 10 highly relevant clicks would be much better. And with less clicks comes less spend. Voila!
- MORE PAYING CUSTOMERS
This is pretty much covered above but if you’re being super relevant and you know that you everyone who visits your site is looking for exactly what you can give them then you are going to dramatically increase your chances of converting them into a customer. Also, once you stop wasting your daily budget on those who aren’t interested, you free up more budget to reach those that really are!
- HIGHER QUALITY SCORE (AKA GOOGLE WILL LIKE YOU!)
This is a biggy and could do with a whole separate blog post about it (watch this space!). Google gives you’re adverts a Quality Score and this is made up of several factors, one of which is the adverts Click-Through-Rate. The Quality Score is out of 10 and the higher this score the more Google likes you and will reduce your cost-per-click and improve your rankings – all because you’re doing the right thing by making sure your adverts are relevant. Cool eh?!
WHAT IS A GOOD CLICK-THROUGH-RATE (CTR)?
Google this and you’ll get the answer but these really aren’t good enough. They work off the average click-through-rate but you’re business isn’t just average right?!
So I have listed what the average is across all industries and what you really should be aiming for (trust me, it’s all possible!).
PAID SEARCH, GOOGLE SHOPPING & REMARKETING
Average CTR = 2%
Goal CTR = 10%
Average CTR = 0.35%
Goal CTR = 2%
SOCIAL MEDIA ADVERTISING (e.g. Facebook Ads)
Average CTR = 1.5%
Goal CTR = 3%
Average CTR = 4%
Goal CTR = 20%