What is click-through rate (CTR)?
Click-through rate (CTR) is a performance metric expressed in percentages that measures the amount of times an ad or email is clicked versus the amount of times it’s been viewed (impressions). It is most commonly used to measure the effectiveness of paid search, display and email marketing campaigns and can indicate the performance of ad copy, subject lines, and meta data (titles and descriptions).
Some common examples where CTR is measured include:
- A call-to-action button or link in an email
- A PPC ad on a SERP page
- A link on a landing page
- A Facebook display ad
- Any on-site element, such as button, image, headline, etc.
How is click-through rate calculated?
To determine the click-through rate of your campaign, you need to divide the number of total impressions by the number of total clicks and multiply by 100. For example, if an advertisement for a Moleskin notebook generated 100 clicks and 7000 impressions, the CTR is 0.7%:
CTR = 7000 : 100 x 100 = 0.7%
Why is CTR important?
To put it simply, the click-through rate is a telltale sign of the success of your marketing campaigns. By calculating how many people actually end up clicking on the ad after seeing it, it reveals the strength (or weakness) and the quality of your ad copy, imagery, positioning, and keywords. Improving the click-through rate is one of the fastest ways to increase conversions and ultimately generate more sales. To figure out whether you’re doing a good job at paid search and display advertising or with your email marketing campaigns, try comparing your CTR to your industry averages.
The CTR for search ads in AdWords across all industries averages at 1.91%, display ads – at 0.35%. The average CTR of Facebook ads is 0.119%.
If you look at the average CTR for different industries, the benchmarks vary:
- B2B: the average CTR is 2.55%
- eCommerce: the average CTR is 1.66%
- Home goods: the average CTR is 1.80%
- Technology: the average CTR is 2.38%
- B2B: the average CTR is 0.22%
- eCommerce: the average CTR is 0.45%
- Home goods: the average CTR is 0.37%
- Technology: the average CTR is 0.84%
- B2B: the average CTR is 2.30%
- eCommerce: the average CTR is 3.19%
- Technology: the average CTR is 2.69%
How to optimize your click-through rate
CTR is usually associated with an action leading up to a conversion, but should not be mistaken with conversion rate. However, as one of the key steps in the chain of events leading to conversions, it needs to be optimized to maximize the number of people who can convert. The CTR can be increased by improving the performance of the elements it tracks: copy, imagery, subject lines, titles, descriptions, and keywords.
To achieve the best results, you need to look at each element individually and employ industry best practices to raise the game. For example, packing your ad copy, headlines and descriptions with power words, such as ‘exclusive’, ‘revealed’, ‘hidden’ or ‘lifetime’, is a surefire way to incite action and tempt people into clicking through to your landing page. To increase email CTR, avoid using generic phrases like ‘click here’ as click-through text because it tells your subscribers nothing about what’s waiting for them on the other side of the link.
Spend time studying the most powerful optimization techniques and learning more about advertising on Google AdWords and Facebook to really nail your strategy and drive more targeted traffic to your online store.