Click-through Rate (CTR) evaluates how effective and useful is your ad, email, or link. It is the ratio of clicks to impressions (a specific link or call to action, like ‘learn more’).
In mobile marketing, the number of clicks made on a mobile ad compared to total views (number of people exposed to that content) gives an idea about its CTR.
For instance, if you click an ad on Instagram or YouTube, you help increase the CTR of the ad campaign. The metrics of CTR help marketers know that the ad was effective and able to drag users to their website or application.
How is click through rate measured?
If an ad campaign of a company generates 1,000 impressions and 100 clicks on the ad, the CTR will be 10%.
The simple formula to calculate CTR is:
CTR = (click-throughs / impressions) x 100
Why is Click-through Rate important?
CTR is an important metric for marketers as it helps identify the best-performing ads or links. At the same time, it gives an idea about the advertising campaigns that are not performing well.
Low CTR also indicates that you are targeting the wrong audience or cannot deliver the message correctly. Therefore, CTR helps you know your audience and understand your customers better.
Moreover, it also gives a notion of what works and what doesn’t while reaching out to your target audience. If you cannot compel and convince your audience in a persuasive tone, they won’t waste their time clicking on your ad.
Even though many other factors decide the success of an ad campaign, CTR is a high-level metric that speaks loud about the ad campaign’s efficacy.
Keeping an eye on CTR is critically important if you want to be a game player. It is mainly because Google Ads uses this metric to determine the quality score of your ad. If the message in your ad is creative and relevant enough for people to click it, Google will rank you higher and reward you with high-quality ads. Also, it may decrease your cost per click in the auction.
The major advantages of knowing CTR can be briefed as follows:
- Helps understand mobile advertising performance
- Gives an insight into the mood and interest of your target audience
- It can be used to compare the performance of different advertising channels
- It gives an idea of the effectiveness of banners, links, CTA, etc
High CTR doesn’t always correspond to a high conversion rate. It can help companies determine if ad campaigns offer a high volume of users or simply high traffic. This, in turn, can help modify, improvise, or adjust investment in advertising accordingly.
What is a good CTR?
To know the good CTR for your business, you must check the average CTRs across your industry. It gives an insight into the existing benchmarks that ultimately help boost your CTR and reach the goals.
Even though there are published averages of industry CTRs, what really matters is how your ad campaign performs. Industry averages are just the baseline for you to have a reference. If the CTR of a business is higher than the average, but its cost per acquisition is also ten times greater than average, its CTR is of no value.
So, until your CTR cannot drive a profitable result, it is of no use.
Tips to Improve CTR
You need to consider different factors for increasing CTR across marketing channels. For instance, to improve CTR across social media channels, start playing with hashtags. One right hashtag at the right time can make your post viral and take your business to the next level. Likewise, headlines and copy will make the difference when you want to increase your CTR on a PPC ad.
Here are the four most effective ways to increase CTR:
- Optimize your headline and copy
- Include a “call to action” in your ads
- Use visuals in the form of images
- Use trending and popular hashtags in your industry
Q1. What is the main advantage of CTR?
Ans: CTR enables you to evaluate how your ads and keywords are performing. It is a practical way of understating your ad campaign’s effectiveness. Efforts should be made to increase the CTR, which significantly helps increase conversion.
Q2. When higher click-through rates are actually bad for business?
Ans: An irrelevant ad or keyword in a business doesn’t generate users, sales, leads, etc. It is when a high CTR for that term is not good for the business.
Q3. What is the most effective way to increase CTR?
Ans: Optimizing your copy and using the right hashtag is the best way to increase your CTR. You can also compare and contrast the CTRs of competitors to understand where you are making a mistake.