Click-through Rate
Click-through Rate: Short Overview
Often abbreviated as CTR, click-through rate represents the ratio of clicks to views and, more precisely, the ratio of page views to clicks for a given link. Click-through rates are considered a key performance indicator (KPI) for online marketers, especially when it comes to banner ads and other kinds of pay-per-click advertising.
Click-through Rate: Deeper Dive
Advertising is ubiquitous. It’s also consistently met with a great deal of indifference - whether a reader simply flips past a magazine ad, a viewer changes the channel during a commercial, or a user ignores a banner ad. However, website operators have a distinct advantage with online marketing: with analysis tools, you can determine how many users are actually interested in your ads.
This brings us to the concept of click-through-rate. The CTR is defined as the ratio of the number of people who clicked an ad to the number of people who saw, but ignored, the same ad. It’s quite an important indicator for any marketing initiative.
The click-through rate is a term commonly used in relation to Search Engine Results Pages (SERPs). In this case, the CTR is normally tracked. The additional metric is how often a website appears in Google's SERPs vs. how many times it has been clicked. For analytics tools to track this, Google Search Console is a great place to look.
What are typical click-through rates?
Just like for most online marketing metrics, there is no one-size-fits-all CTR that can be applied universally. Statistically, however, the click-through rate is usually around the per-thousands – meaning there are only a handful of clicks per 1,000 views. Previous studies have pegged the average CTR at around 0.1%; as ad blockers become more popular and user awareness increases, this percentage may drop even further. However, click-through rates of between 1% and 3% can be achieved through better use of thematic advertising - that is, advertising tailored to the target group.
Banner ads which run across the page and “block” the actual website, which have been popular for a number of years, also enjoy a decent CTR - often 10% and above. However, “inadvertent” user behavior must be taken into account, since this type of advertising often leads to erroneous clicks. Users often try to close the banner and accidentally end up on the linked page. For this reason, whether banner ads are effective is a rather divided issue in online marketing.
For email marketing, higher click-through rates around 3-15% are fairly common. One should note, however, that just opening an email will increase the view count. Promotional emails often end up unopened in the trash folder - this skews click-through rates. For banners and other forms of advertising on social media sites like Facebook, it’s a different story - click-through rates can be about 11%. Since this is much higher than the click-through rate for regular websites, users on social media seem to be more amenable to clicking.
How important is your CTR?
CTR is so easy to measure, it is often chosen as a KPI. Keep in mind, though, that CTR is only appropriate for assessing specific factors. For example, click-through rates cannot provide feedback about the actual success of a marketing measure. This is, unfortunately, often forgotten. Many AdWords ads and Facebook campaigns end up missing the mark.
The main factor here is not the number of clicks on banners and other website ads, rather the conversion rate, i.e. the number of users who not only clicked on the banner, but then actually made a purchase. This is easily illustrated with an example: if an ad costs $1/click and 130 out of every 1,000 users click on the ad, it seems encouraging at first. But let’s dig a little deeper: if only 2 out of these 130 clicks lead to a successful conversion, it turns out that the ad is actually not very efficient. Generally the $130 spent on the ad should be compensated by a corresponding increase in revenue - with only 2 customers, this may be unlikely.
Despite this, CTR is still an important KPI and main criterion for analytics in online marketing. For example, click-through rate can be used to compare different internal advertising initiatives. Is an attention-grabbing banner or a plain and simple banner more effective in getting clicks? Does the new advertising concept actually garner more attention than the old one? Are ads driving more traffic on one site than another? These questions, and others similar to them, can be answered by measuring your click-through rate.
We can go a step further and draw even broader conclusions by comparing CTR and the conversion rate. For example, if an AdWords campaign is attracting a lot of traffic but the conversion rate is low, your landing page design may need some attention. Additionally, you can use click-through rate and conversion rate to compare the effectiveness of ads on different portals. This allows you to target banners on social media pages, fan portals or Google.
CTR, SEO, and SEA (Click-through Rate, Search Engine Optimization, and Search Engine Advertising)
CTR - not for banner ads, but rather in SERPs - is an important indicator in Search Engine Optimization (SEO). With the help of the click-through rate, you can determine how attractive your website meta description is. If your page appears frequently in the SERPs but doesn’t get many clicks, this indicates that the meta description is not attractive to visitors. You can often drive noticeable improvements here by optimizing your metadata according to SEO standards.
Click-through rates can offer an intriguing comparison between regular visitors and those who arrived at your site via search engines. If you do well with the latter group, it’s likely that you’re adequately meeting the expectations of those using search; your site content and SEO measures are effective.
Additionally, the evaluation and optimization of Search Engine Advertising (SEA) can also be informed by the CTR. As we’ve already mentioned, while a good click-through rate is not an absolute measure of success, it is certainly a key pillar of effective online marketing. There are several ways you can lay the groundwork for a high conversion rate by increasing your CTR. You can tailor individual ads to different audiences, as well as target certain groups of pages where the ads are placed. In addition, you can use A/B testing to find the most effective option among multiple variations.
Conclusion
Click-through rate is an easy-to-measure, useful tool to assess the behavior of website visitors. It’s important for online marketers since it can help you compare the effectiveness of various advertising measures. However, the click-through rate alone is a poor indicator of campaign success; conversion rates must also be factored in. When these are considered, you can build a reasonably clear picture of how effective your ad campaigns are and whether the content on your site aligns with your ad promises.