What is a Click-Through Rate (CTR)
Click-through rate (CTR) is 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 users per 1,000 views (or impressions) or 0.2%.
Breaking Down Click-Through Rate (CTR)
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 does not work. 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 Rate Calculation
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 advertisement has been clicked on 200 times after being served 5,000 times, after multiplying that result by 100 you get a click-through rate of 4% [(200 / 5,000) x 100 = 4%)].
Click-through rates for emails are calculated the same way but instead of an advertisement being served and clicked on to find the CTR, it may be 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 rate with open rate, bounce rate and other measurements to calculate the effectiveness of their campaigns.
Click-through Rate vs. 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. 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.