Click-Through Rate (CTR)


DEFINITION of 'Click-Through Rate (CTR)'

The percentage of individuals viewing a web page who click on a specific advertisement that appears on the page. Click-through rate measures how successful an ad has been in capturing users' interest. The higher the click-through rate, the more successful the ad has been in generating interest. A high click-through rate can help a website owner support the site through advertising dollars. Because Internet users have become desensitized to ads on web pages, a typical click-through rate is only about two to three users per 1,000.

BREAKING DOWN 'Click-Through Rate (CTR)'

A high click through rate means that lots of users are clicking on an ad, but it doesn't tell us anything about the number of sales the ad ultimately generates. For this reason, conversion rate, the percentage of click-throughs that lead to actual sales, may be a more useful metric of an ad campaign's success.

  1. Traffic Acquisition Cost - TAC

    Payments made by Internet search companies to affiliates and ...
  2. A-B Split

    A method of testing the effectiveness of marketing methods or ...
  3. Cost Per Click - CPC

    A website that uses CPCs would bill by the number of times a ...
  4. Banner Advertising

    A rectangular graphic display that stretches across the top or ...
  5. Cost Per Thousand - CPM

    The price of 1,000 advertisement impressions on one webpage. ...
  6. Impression

    A metric used to quantify the display of an advertisement on ...
Related Articles
  1. Economics

    Online Investment Scams Tutorial

    To bamboozle someone out of their money is an age-old ruse. Learn about some of the gimmicks modern-day swindlers use and avoid becoming a statistic.
  2. Entrepreneurship

    From The Printing Press To The Internet

    Find out how this invention contributed to the development and evolution of the U.S. economy.
  3. Options & Futures

    10 Tips For Choosing An Online Broker

    This important investment decision happens before you pick your first stock. Find out how to get it right.
  4. Personal Finance

    Tips For Keeping Your Financial Data Safe Online

    Find out how to protect your personal information from phishers, scammers and thieves.
  5. Personal Finance

    12 Ways To Shop Smarter

    The early bird may catch the worm, but in shopping, the worm will come to those who wait.
  6. Entrepreneurship

    Top 3 Most Successful Korean Entrepreneurs

    Discover the backgrounds of some of the most successful Korean entrepreneurs and information about the companies and projects leading to their success.
  7. Entrepreneurship

    Why Every Small Business Needs A Website

    The reality of living in the twenty-first century is that customers find business information and product offerings predominantly on websites, and small businesses without an online presence ...
  8. Entrepreneurship

    How Twitter Cards Can Help Drive Traffic to Your Website

    Understand what Twitter cards are and how they are used to increase website traffic. Learn about the top six ways these cards drive Web traffic.
  9. Entrepreneurship

    5 Ways to Make Money on Twitter

    Find out how people are making money online on Twitter, and get some ideas that can turn Twitter into a source of revenue for you or for your small business.
  10. Investing

    Ad Blockers Could Spell A Boom For Publishers  

    In a free content world, largely subsidized by advertising, ad blockers can eat into publishing revenues. But, publishers can still stand to gain.
  1. How do BitTorrent sites like The Pirate Bay make money?

    BitTorrent sites act as hubs where Internet visitors download, share and search for torrent files. A torrent file is the ... Read Full Answer >>
  2. Why does an investor need to understand the click-through rate in the Internet sector?

    An investor needs to understand the click-through rate in the Internet sector because it directly affects the success of ... Read Full Answer >>
  3. Is a financial advisor allowed to pay a referral fee?

    A financial advisor is allowed to pay a referral fee to a third party for soliciting clients. However, the Securities and ... Read Full Answer >>
  4. How does a long tail become profitable?

    A long tail becomes profitable because the costs to produce, market and distribute a product or service in a niche are low, ... Read Full Answer >>
  5. How do companies with a large product portfolio use BCG Analysis?

    BCG analysis is used to evaluate an organization's product portfolio in sales planning and marketing. It is specifically ... Read Full Answer >>
  6. What are the similarities between product differentiation and product positioning?

    Product differentiation and product positioning are important elements in a marketing plan, and most marketing strategies ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  2. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  3. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  4. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  5. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  6. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!