What Is CTR? Why Click-Through Rate Is Important

Publift
April 28, 2022
November 28, 2023
What Is CTR? Why Click-Through Rate Is Important

Click-through rate (CTR) is an important digital marketing metric for digital publishers looking to improve their results on search engines.

Advertisers also use it to help improve conversions on their (pay-per-click) PPC ads and email marketing campaigns, while social media campaigners can use it to drive traffic to external landing pages.

The average CTR can tell a business a lot about the success of its marketing campaign. By calculating the total number of clicks on a link, it can evaluate the strength or weakness of the ad copy, imagery, and keywords of its online advertising.

With the first organic search result on Google accounting for almost a third of all clicks, understanding how to appeal to a target audience for higher CTRs is essential for those looking to compete in an increasingly digitized marketing landscape.

This article explains what CTR is, how it is calculated, and why it is such an important metric in internet marketing. We also look at what constitutes a good rate, and dissect certain cases where a high CTR rate may not be desirable.

What Is Click-Through Rate?

Click-through rate is the ratio of the number of people who clicked on an ad to the number of people who viewed the ad. Click-through rates give advertisers and publishers a measure of how successful a website or an email campaign is. 

CTR Defination

CTR Formula

CTR Formula

Average CTR is expressed as a percentage and can be discovered using the following formula:

(Total Clicks) / (Total Impressions) = CTR

For example, if an ad that has attracted 10 clicks from 100 impressions, then that ad has a CTR of 10%.

What is considered a good click-through rate depends on the  industry, ad campaigns, and keywords. However, regardless of the business and campaign strategy, publishers should be looking to attract high CTRs if they want to drive more revenue.

The reason for this is simple. The more users click—whether it's an online ad, an email marketing campaign, or a simple search engine result—the more likely the user is to take the desired action of the campaign.

In layman's terms? A high CTR generally equals a high conversion rate.

Why Is CTR Important?

How Click Through Rate Affects Quality Score Source: Wordstream

While click-through rate is only one of several metrics in tracking online advertising endeavors—CPM, CPC, and CPA may be equally telling—is is an integral benchmark in determining engagement with digital marketing campaigns.

CTR is invaluable when it comes to A/B testing performance on one or more links, which in turn determines which creative elements, including keywords and images, drive clicks.

CTR can also be used to compare which ad types are most effective. By comparing CTR on video ads, interstitial ads, and banner ads, publishers can determine where to direct the bulk of their ad spend for maximum return on investment (ROI).

How to Improve Click-Through Rate

There are several different elements to consider for advertisers looking to gain higher CTRs and increase the success of their campaigns, regardless of the marketing channel. For publishers looking to improve conversion rates and maximize their ad revenue, they should consider the following.

1. Develop a Strong CTA

Any advertiser worth their weight in words knows the importance of a direct and compelling call to action (CTA).

A strong CTA should contain three key elements:

  • Guidance: This tells the user what action to take.
  • Information: This tells the user what they will get when they take said action.
  • Assurance: This tells the user that performing the action is low risk with no strings attached.

Crafting a strong CTA is a surefire way to get a good click-through rate (CTR), particularly when coupled with the right keywords.

2. Optimize Your Content

While quality, well-crafted content will always be king, there are several ways to further optimize ad copy to increase the click-through rate (CTR).

Firstly, publishers should ensure they conduct thorough keyword research and use it to inform their headlines, copy, and CTA. Utilizing target keywords can help ensure the advertising is seen by the right people and that landing pages and websites appear in organic search results.

Furthermore, for those running PPC campaigns, utilizing ad extensions can enhance ad copy and increase ad rank and CTRs.

Ad extensions allow users to add extra dimensions to their ads, including site links and callouts.

For email marketers, segmenting the target audience so that advertising is sent only to relevant users is a proven optimization strategy.

3. Market to Your Target Audience

An integral part of developing any marketing campaign is understanding who your target audience is and marketing to them with relevant content.

While a click-through rate (CTR) tells a publisher the percentage of people performing click-throughs, it doesn't indicate the conversion rate. So while an advertiser may have optimized the content to get a higher CTR, if they are not targeting the ideal customer, other metrics, such as conversions, may suffer.

To evaluate the target audience, a publisher should look at as many elements as possible, targeting their users via a range of relevant information such as age, location, motivation, and spending habits.

Publishers and advertisers also need to consider the placement, quantity, type, freshness and content of ads, as these can all positively and negatively affect CTR.

Keeping these factors in mind will ensure a publisher is marketing their ads, email campaigns, and other relevant content to the ideal customer. And by ideal customer, we mean those that are likely to get the most value from the business offerings and therefore follow their click-throughs all the way along the customer journey to the point of conversion.

Calculate your Click-Through Rate (CTR) effortlessly with Publift's CTR calculator. Measure the effectiveness of your ads and optimize your strategies for maximum engagement quickly.

How to Track Click-Through Rate

Advertisers using Google Ads to run a pay-per-click (PPC) ad need to keep in mind that a high click-through rate (CTR) impacts the content's quality score and the cost per click (CPC) of their PPC campaign. Higher quality scores mean improved ad position for lower costs.

While it is handy to know the CTR formula, it's unlikely that an advertiser will need to calculate their CTRs manually. For those running paid media campaigns, their account dashboard will display the ad's CTR, along with several other factors such as CPC.

PPC ad campaign dashboard showing average CTR Source: Google Ads

In the same way, publishers looking to optimize their websites for SEO can log into the Google Search Console (GSC) to view their organic CTR.

To view the CTR for your website, follow these steps: 

1. Log into the Google Search Console and select your property. 

2. Click on the “Performance” tab on the left-hand panel in the GSC

3. On the graph that opens up on the right-hand panel, click on Average CTR.

How to Track Click-Through Rate

You will typical see four metrics on the performance graph:

1. Total clicks

2. Total impressions

3. Average CTR

4. Average position

You can check or uncheck any of the metrics for ease of analysis. This is what the performance graph looks like with all the four metrics selected:

How to Track Click-Through Rate

You should be tracking and monitoring your CTR in the following marketing efforts. 

1. Pay-Per-Click (PPC) Advertising

PPC advertising is a key example of where publishers should be monitoring CTR. When running PPC ads, the CTR affects multiple dimensions of the campaign.

When PPC ads run, whenever a user types the relevant keyword into a search engine, the PPC ad will appear, counting as an impression. Whether a user clicks on the landing page link will help determine whether the ad copy is strong, and is targeting the ideal user. A high CTR in this instance will also improve the ad rank.

2. Social Media Marketing

With ad spending on social media projected to reach over $173 million in 2022, social media ads are one of the most relevant marketing tools available.

While each social media platform runs its own advertising platform they all have the following feature. Ads will appear in the feeds of relevant users, increasing the likelihood of a high CTR to the relevant landing page.

All these ad platforms include dashboards that track the number of impressions and whether the ad is garnering a good CTR or a low CTR.

Facebook ads Insights Source: Facebook Ads

3. Email Marketing

When it comes to email marketing, CTR is perhaps the most important metric available. It allows email marketers to understand how many people who opened the email followed the user journey to click the link included in the email content.

4. SEO

Even if you are not running PPC, social media, or email marketing  campaigns, monitoring CTR is an important metric for your website’s SEO.

SEO

In Google Search Console, the CTR for your website is calculated by first measuring the total number of impressions your website received. Impressions are the number of times users saw a link to your website in SERPs. Next, it calculates the number of times users actually clicked on your website’s link when they saw it in the search results. The ratio of the number of clicks to the number of impressions expressed as a percentage is the CTR for your website.

If your website has a healthy number of impressions, but few clicks, this will result in a low CTR. This in turn means that while your content is showing up often in search results, people don’t find the snapshot of it they see in the SERPs compelling enough to click on it. This in turn implies that you would need to work on your technical SEO to improve conversion.

Thus constantly monitoring your website’s SEO helps you uncover underlying structural issues with your website and address them to improve performance. 

How Does CTR Impact Ad Rankings?

Your ad rank decides the position of your ads in search results. CTR is an important metric that not only indicates the relevance of your ads to users, but informs your Ad Rank. Google uses your actual CTR to help find your expected CTR, which is a component of your Ad Rank.

Google notes that it uses your Ad Rank to determine not only whether your ads will appear on a given page, but also where they show up. Google recalculates Ad Rank every time an ad is eligible to appear on a page.

What Is a Good CTR?

So, now we know what click-through rate (CTR) is and how to optimize for ads and organic search, how do we determine whether or not they are obtaining a good CTR?

This is a contentious issue and can vary greatly depending on the relevant industry, marketing channel, and its analysis in the context of other metrics such as conversion rates.

What Is a Good CTR?
What Is a Good CTR?

Is Higher CTR Always Good?

A higher CTR is usually good for both publishers and advertisers. However, there are cases when you might actually want a lower CTR. These include:

  • You’re paying for a keyword that is not relevant to your business
  • The keyword is too expensive, and even with a high CTR, your RoI on the keyword will be too low
  • The higher CTR is not bringing in any additional revenue, while eating up into your ad budget.

Therefore it is important to ensure that your keywords are both relevant and affordable in order to get the most RoI out of your ad spend.

Final Thoughts 

While the average CTR for Google Ads in 2021 sat at 3.17%, search ads in the arts and entertainment industry saw a 10.67% CTR.

Therefore, it is important to research CTRs within your specific industry and look at how your CTR is affecting other elements of your campaign such as your quality score and conversion rate.

Publift helps digital publishers get the most out of the ads on their websites. Publift has helped its clients realize an average 55% uplift in ad revenue since 2015, through the use of cutting-edge programmatic advertising technology paired with impartial and ethical guidance.

If you’re making more than $2,000 in monthly ad revenue, contact us today to learn more about how Publift can help increase your ad revenue and best optimize the ad space available on your website or app.

FAQs

Is High CTR Good or Bad?

A higher CTR is an indication of better user engagement and signifies increased traffic to your website which may result in better SERP rankings. A higher CTR is especially good for those who choose a CPC pricing model.

What Is a High CTR?

High CTR indicates that ads and listings on your webpage are beneficial for the users. It also denotes that the ads on your website are good enough and pertinent to the search queries to generate a click. 

What Causes High CTR?

A good campaign that is relevant to users and appears to its target audience is more likely to generate high CTRs. Google values ads with higher click-through rates as they appear fewer times to generate more clicks.

What Is a Good CTR for Digital Ads?

A good CTR for search ads is around 4-5%, while for display ads this is around 1%.

Is a 20% Click-Through Rate Good?

Yes, 20% is a very good CTR for most industries and niches. It is much higher than the average CTR which hovers around 4-5% for most industries. 

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