What Does ‘CTR’ Stand For In Online Advertising?

What does 'ctr' mean?

CTR Definition

By definition, “Click-Through Rate”, or ‘CTR’, is a digital marketing metric that measures the clicks advertisers receive on their ads per number of impressions.

However, the term “CTR” can often be used to mean two distinctive things within the world of online advertising.

  1. It commonly refers to the rate at which people who see an ad online click on it. For example, if 1000 people see an ad on a Taboola widget and only 10 actually click on it, the click-through rate or CTR of that ad would be 1%.
  2. Sometimes it can also be used to indicate the click-through-rate of a landing page. Considering the example given above… if, out of the 10 people who clicked on that Taboola ad, 4 subsequently clicked on the call-to-action button on the landing page once they reached it, the landing page itself would have a click-through rate of 40%. 

 

How does a CTR work?

As established above, CTR is the ratio of clicks on your link (or ad) to impressions (eyeballs) on your your link (or ad). Thus, CTRs are especially helpful in assessing the effectiveness of search and display advertising, email marketing, and other forms of online marketing. 

Since one can measure clicks and CTR at all levels of their account, a person will be able to gauge whether they have good CTRs by just looking at the number of clicks an entire campaign, ad group, or ad has received and comparing it with the number of people that actually reached the sales pages.  

According to Google,

 “A high CTR is a good indication that users find your ads helpful and relevant. CTR also contributes to your keyword’s expected CTR, which is a component of Ad Rank. Note that a good CTR is relative to what you’re advertising and on which networks.”

 

Here is a video from the pay-per-click advertising and digital marketing company, Surfside PPC explaining what a good Click-Through Rate actually looks like.

 

How To Calculate Click-Through Rate

Calculating a click-through rate is fairly straightforward. To determine CTR, one simply has to divide the number of total impressions by the number of total clicks. 

For example, if an advertisement for bags gets 10 clicks and 2,000 impressions, the CTR is 0.5 percent.

 

CTR Examples 

Depending on the network and industry, average CTRs can fluctuate. As discussed earlier, there can also be different types of CTRs, depending on the use case. For instance, CTRs for emails and newsletters are different from CTRs for search and display network content. 

The following illustration from WordStream displays benchmarks for the average click-through rate in AdWords across 20 common industries.

Average CTR benchmarks from Wordstream

Source: wordstream.com

The above image also contains data on the CPC (or ‘Cost Per Click’) of each vertical listed.

This can help illustrate the inverse link between CTR (Click-Through Rate) and CPC (Cost Per Click).

In general, the higher the Click Through Rate, the lower one’s Cost Per Click will be.

Other facts go into determining how high the Cost Per Click will be in a given vertical and on a given traffic source, but in general, the smaller the percentage of people who click on your ad after seeing it, the more you will have to pay for your clicks.

For instance, the ‘Dating’ vertical has (unsurprisingly) a very high average Click Through Rate, and thus a low Cost Per Click.

Legal Services, again unsurprisingly, have a low Click Through Rate and a high Cost Per Click.

Indeed, according to the above study,

It’s no surprise that legal services have some of the highest CPCs among all Google ads on the search network. Both “Lawyer” and “Attorney” make the top 10 most expensive keywords on Google and on Bing. Average CPCs in the legal industry are over $6. Consumer services aren’t too far behind, with an average CPC of $6.40.

 

How To Increase Click-Through Rate On Ads

To increase your click-through rate on advertisements you are running, you would want to find ad images and headlines that create more curiosity, and inspire more people to click your ad out of interest.

This can be dangerous though, because if you focus too much on inspiring curiosity and getting a higher click-through rate, it is possible your overall conversion rate could go down, as the people clicking may not be the types of people most likely to convert.

 

How To Increase Click Through Rate On Landing Pages

To increase your click-through rate on your landing pages, it is important to mine data and set your own baseline CTR and goal. An analysis of various CTRs of past campaigns using tools that allow the comparison of specific data would generally be advised as a starting point.

The popular internet marketer, Neil Patel, recommends using heat map tools, such as Crazyegg, to learn how users are interacting with your site or page and use that information to make better decisions.

According to Patel,

“Heat maps are very powerful. For example, Conversion Rate Experts generated an extra £14 million a year for Sunshine.co.uk. One of the strategies that helped them achieve this result was the use of CrazyEgg, to know where their users are clicking on a given page.”

To read through the detailed breakdown of Patel’s advice, read his blog post on “How To Maximize Your Search Click-Through Rate in 9 Simple Steps” here. To dig even deeper into the subject, you may also check our in-depth article on Neil Patel himself here and the Crazyegg platform he recommends here.

 

Conclusion

That is the run-down on what the term ‘CTR’ or “Click-Through Rate” stands for in online advertising and how it works!

 

 

 

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