What is Click-Through-Rate?
This is a common phrase and one of the metrics used in digital marketing. You can easily find Click-through-rate in your website (can be through Google Analytics), social media analytics such as online ads, social media (e.g Facebook, LinkedIn, YouTube), and email newsletter.
Specifically for online advertising, Click-through-rate or CTR is a percentage or ratio of how many people see your ad (impression) to the number of people who clicked it. CTR can be seen as a measurement of an immediate response to an ad, but it is not the overall response to the ad. Having a lot of people clicking on our ads does not always mean that they are converting (e.g purchase, sign-up, etc).
How to Calculate Click-Through-Rate?
Usually, analytic insights will automatically calculate your CTR. But you can also calculate it yourself by dividing the number of clicks by the total number of impressions. CTR is usually presented in percentages.
How do you know if it’s a good or bad CTR?
It all depends on the context. If you’re talking about a social media post, let’s say a LinkedIn post, if you don’t put any link in that post, of course, the CTR will be 0%. Because there’s nothing to click in the first place. You can see in the picture below for CTR examples from the LinkedIn analytics dashboard.
If you’re talking about CTR in ads, especially Google Ads, it depends on the combination of the ads and whether your ads are relevant or not. Extensions and site links can be a great way to boost CTR and can attract more people compared to the ads without extension. Usually, CTR has to be interpreted CTR with other metrics.
Why Click-through-rate matters?
CTR is an important metric that can help you and your business understand more about your market/target audience. If you have a high CTR, it means that your ad is relevant to your target audience and they click your ad. If you have a low CTR, it means that your ad is not relevant to your target audience and they only see and pass by it (impressions).
Put in mind that CTR only tells you the percentage of people who click on your ad or post. It’s not the total number of people who convert (e.g purchase your product, download e-book, subscribe to your newsletter, etc). So if you have a high CTR but a very low conversion rate, it will translate to a high cost-per-acquisition (CPA).
Click-through-rate example in Online Ads
You are running an online ad campaign for your product and 100 people see your ad. But only 5 of them click the ad, which means your CTR is 5%. For example, if you have 10 impressions and only 1 of them clicked your ad, then your CTR would be 10%. If you have 1000 impressions and 1 click, then your CTR would be 0.1%.
Hopefully, this article can help you understand click-through-rate more and if you have any question, you can always contact us here.