Click-Through Rate (CTR): Definition, Formula, and Analysis

What Is the Click-Through Rate (CTR)?

In online advertising, the click-through rate (CTR) is the percentage of individuals viewing a web page who view and then click on a specific advertisement that appears on that page. Click-through rates measure how successful an ad has been in capturing users' attention. 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 measured in cost-per-click.

Because Internet users have become greatly desensitized to ads on web pages over time, a typical click-through rate may be only about two users per 1,000 views (or impressions), or 0.2%.

Key Takeaways

  • The click-through rate (CTR) measures proportion of individuals who see an online advertisement (impressions) and subsequently click on it.
  • CTR is used in advertising to gauge the effectiveness or success of an online marketing campaign.
  • As internet ads have become ubiquitous, click-through rates have fallen over the years as users get used to ignoring them. CTRs of just one or two users per thousand are now common.

The Formula for Click-Through Rate (CTR) Is

 CTR = Total Measured Clicks Total Measured Ad Impressions × 1 0 0 \begin{aligned} &\text{CTR}=\frac{\text{Total Measured Clicks}}{\text{Total Measured Ad Impressions}}\times{100}\\ \end{aligned} CTR=Total Measured Ad ImpressionsTotal Measured Clicks×100

How to Calculate the Click-Through Rate

To calculate a click-through rate, take the number of times an ad is clicked on and divide it by the total number of impressions. Then take that amount and multiply it by 100 to get a percentage, which is the click-through rate. For example, if an online advertisement has been clicked on 200 times after being served 50,000 times, by multiplying that result by 100 you get a click-through rate of

0.4% = [(200 / 50,000) x 100]

What Does the Click-Through Rate Tell You?

A click-through rate can help digital marketers measure the efficacy of a variety of online marketing campaigns. It may be utilized with a variety of mediums, such as display advertisements, email advertising, and paid search.

It can also be used to measure the effectiveness of advertising copy, titles, and descriptions that make up the metadata of online content. Since most websites are built to compel users to take an action, click-through rates can help digital marketers learn what works and what doesn't.

Such monitoring does not give advertisers any insight into the intent and reasoning of an individual who has clicked on an online ad or piece of content but remains a standard because of its convenience.

Click-Through Rates in Email Marketing

Click-through rates for emails are calculated in much the same way, but instead of an advertisement being served and clicked on a website, you would consider the percentage of times an email recipient clicks on one or more links in an email to be taken to the sender's website or other destination. It is more easily understood as the total number of clicks an email has generated for its sender. Email marketers may pair click-through rates with open rates, bounce rates, and other measurements to calculate the effectiveness of their campaigns.

The Difference Between Click-Through Rate and Conversion Rate

A high click-through rate means that lots of users are clicking on an ad, but it does not inform the user about the number of sales the ad ultimately generates by leading to purchases. For this reason, the conversion rate – the percentage of click-throughs that lead to actual sales – may be a more useful metric of an ad campaign's success.