The Value of Click-Through Rate and How to Interpret This Metric

Click-Through Rate Defined

Click-through rate, or CTR, “measures the number of clicks advertisers receive on their ads per number of impressions” (LOCALiQ, n.d.). CTR is calculated using the following formula:

(Total Clicks on Ad) / (Total Impressions) = CTR

A high CTR is essential to marketing success because it shows that users are interested in your content and engaging with it.

CTR can affect numerous areas within your data analysis, but within the world of ads, it most often affects the Quality Score. Both Google and Facebook use Quality Scores to rank ads and decide what an ad will pay to run. The Quality Score is determined by the CTR, the cost-per-click, and the cost-per-conversion. If people are engaging with it, in other words clicking on it, then the ad is deemed relevant and given a high Quality Score (LOCALiQ, n.d.).

A good CTR depends on the topic, the ask, and the industry you’re in. A bigger ask will have a lower CTR and a higher CPC, but this changes depending on the industry. According to MailChimp, within the non-profit world, a good CTR 2.76% (CXL, n.d.). On average, across all industries, the average CTR in AdWords is 1.91% in search network ads and 0.35% in display network ads (LOCALiQ, n.d.).

Email marketing is another area, other than ads, were CTR is vital. In email marketing, the CTR is the percent of people who clicked at least one link in the email. You can also track total CTR (TCTR) and unique CTR (UCTR). TCTR is the total clicks in an email. That means if a person clicked 12 different links, all 12 clicks would count towards the CTR. UCTR is the unique clicks in an email. That means if the same person clicks on those 12 links, it will only count towards one click. You can increase the CTR in email marketing through the subject line, call-to-action, design, copy, link emphasis, time, and optimization for mobile (CXL, n.d.).

Real-World Example of Click-Through Rate Usage

One example of this is, again, from my work. When my one coworker and I were hired, the metrics for our MailChimp account were pretty bad. Each email saw a CTR of 1.3% on average with 15% open rate and numerous abuse claims. My coworker and I analyzed what links people appeared to be clicking, and then we began to test different formats for the emails, different send times, and different amounts of emails per week (i.e. a weekly newsletter versus daily content updated). We were able to increase the CTR to 2.5% on average with an open rate of 24%. CTR showed us how our audience was engaging, what they preferred, and how we could provide relevant content to them.

References:

LOCALiQ. (n.d.) Click-through rate (CTR): Understanding click-through rate for PPC. WordStream. Retrieved from https://www.wordstream.com/click-through-rate.

CXL. (n.d.) Email click-through rate: What you need to know to succeed. Retrieved from https://cxl.com/guides/click-through-rate/email/#:~:text=Click%2Dthrough%20rate%20for%20email,at%20your%20email%20CTR%20percentage.