What is Click-Through-Rate (CTR): 5 important Things you need to know

5 Things you need to know about Click-Through-Rate (CTR)

These days digital marketing is rapidly progressing, and all the businesses are trying to move to online platforms. To measure the effectiveness of the paid ad, businesses are now using 4 basic metrics: impression, clicks, conversion and spend. From these 4 basic metrics there are 4 combinations that can be derived in order to evaluate the success of the campaign:

  • Click-through-rate,
  • Conversion rate,
  • Cost-per-click, and
  • Cost per acquisition.

 Today we are going to talk about click-through-rate also known as CTR. Below are 5 essential things you need to know about CTR and why it is important for your business’ website.

     Definition: What is CTR?

     CTR or Click-Through Rate is basically a ratio of a total number of clicks, to the number of times the users were exposed to the links. CTR is part of digital marketing strategies and is calculated when the company is performing social media ads or e-mail campaigns. CTR is not only performed for ads but also for the keywords.

    Why is CTR important?

    Now, we know the definition of Click-Through Rate, but why it is important to measure CTR. Simply, CTR helps the business to understand which ad and keywords were effective. A lot of businesses spend millions of dollars to agencies for their online marketing services or any other online campaigns, and to evaluate the success of it, the CTR is calculated. Also, the CTR is crucial to your website’s Quality Score. Quality Score is a metric used by Google and other search engines to determine the position of your ad. Higher CTR leads to higher Quality Score, so it is crucial to gain a lot of clicks in order to rank high.

    How to Calculate CTR?

    Since we know the importance of click-through rate, it is time to answer the question: how can we calculate the CTR? The formula would be to take the total number of clicks and divide to the total number of impressions and multiplying it to 100.  

     

    CTR = (Clicks/impressions) x 100

     

    For example, you are creating a Facebook campaign and then launching the ad by paying Facebook. In the paid ad, you put the link to the website. When the Internet user clicks on the link, it means that your business just gained 1 click from the campaign. You count the number of clicks through this campaign and divide to the number of impressions. The impression is the number of people that were exposed to the campaign. After that, you will multiply to 100 and then you get the Click-through rate of your Facebook campaign. Remember that CTR not only used to monitor your ad performance but also for the keywords that you have used.

    How to achieve high CTR?

    Now you understand what click-through rate is and how to calculate it. But how to create a good ad to achieve high CTR? Well, first of all, you need to decide which type of ad you are planning to launch. You can use different channels for running your campaign: social media, e-mail, or Google. After you choose the channel, you can start creating an ad. One of the tips would be to make an ad catching, relevant and engaging. You may interest in these baby steps for successful PPC advertising campaigns.

    For instance, you are planning to launch an e-mail campaign. Your business is within the e-commerce field and soon the Christmas time is coming. You would probably, want to create a banner that has CTA (Call-to-Action) feature that urges customers to buy presents for their family and friends. This way people who are looking for presents will likely to press on your link and find more information regarding your business’ products. As you are targeting the right audience, you will likely to have high CTR, which means your ad was performing well.

    Another important part is choosing relevant keywords. Also, make sure that your keywords are specific and not too broad. This way you can reach the right target market and therefore people who are actually interested in will click and you will get high CTR. If you are reaching the wrong audience, it would be highly unlikely that someone will actually click on your website. So, your CTR will be low, and your marketing campaign has failed to attract more clicks.  

     Does high CTR always mean good?

    Many businesses assume that having high CTR means that their ad is running well, however it might not be always true. There are some occasions when high CTR can indicate to the problem within the digital marketing strategy. For example, if the campaign does not bring new leads, in other words, does not increase the conversion rate, then a high click-through-rate is showing that there is an issue within your marketing strategy. 

    You are paying for every click, therefore a lot of click leads to high costs. But when the clicks do not generate new leads or sales, you are losing that money. Also, sometimes you are getting clicks on specific keywords that are priced too high, hence even if they do not help in optimizing, your business will not gain a profit. So, it is not always good to have high CTRs, when the conversion rate is small.

    Bonus tip: Optimizing URLs can also assist in increasing Click-Through Rate. Therefore, your business should ensure that the URL consists of only relevant keywords. If the URL looks suspicious and have irrelevant words, the users will not click on it, which is leading to low Click-Through Rate.

    Once your business decides to run a campaign, always remember to perform CTR to evaluate the success of the ad. By knowing the ratio, you can discover the problem within marketing strategies. It is crucial to check whether your business has created an ad that engages with customers, has a relevant URL and uses the right keywords to boost your CTRs. Learn more about this simple guide to keyword research to optimize content for your google ads.

    Check out The Hash Agency’s website for more information regarding the paid ads. We provide digital solutions to businesses which help convert high-quality leads and help your business gain a foothold in the online market. We don’t believe in one size fits all solutions, because your brand should stand out.

     

     

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