What is Click-Through Rate (CTR): definition and formula
Online marketing is aimed at finding potential consumers with the help of digital channels. Users surf the Internet, socialize online, and focus their attention on the most interesting blogs, informational and commercial websites, as well as attractive advertisements. Click-through rate (CTR) is one of the ways to measure the success of the search engine, advertising, or email campaigns, among others. It shows the exact percentage of users who decided to click on the link just after seeing it.
CTR formula: how to calculate the click-through rate
According to the definition, CTR is the ratio of the number of clicks (people who were interested in the offered advertisement and performed some activity, for example, clicked on the ad or link) to the overall number of impressions (views). This figure should be multiplied by 100 to make CTR into the percentage. Here is the exact formula for CTR calculation:
(Total Clicks) / (Total Impressions) x 100 = Click-Through Rate
The above is the manual way to calculate the CTR. Additionally, marketers might use different metrics to monitor it. Let’s take a look at one example:
The total number of impressions is 1670. The total number of clicks equals 89. It is enough to see the CTR percentage. Here is a formula applied to the case:
CTR = (89 / 1670) x 100
CTR = 5,32%
CTR demonstrates the quality score of the campaign – the higher it is, the better the return on investment you might have.
What is a good click-through rate?
Experts note that there is no ideal CTR index because its percentage depends on your platform direction and the type of content. But some common rules help to understand if the CTR is high or low for your online business:
- Most marketers would state 2% CTR is the average score for any advertising campaign
- Some experts name 4-5% CTR as the most optimal result for digital projects
- If CTR is higher than 10%, it might be dangerous for the monitored website
The last point might sound surprising, but too high CTR percentage is the key reason for Google to inspect the digital platform. Search engines will take a focused look at your website’s activities and can even block it. So, even the most successful paid advertisement can’t provide you with a CTR that is higher than 10% if you do not violate the white hat practices of digital marketing.
How to determine the most optimal CTR for your market niche?
The most useful advice for website owners and marketers is to analyze different projects, advertising campaigns, and marketing strategies in only one sector. It’s necessary to take a look at CTR of all the competitors and find out the average score. Note that each industry has its peculiarities. For example, according to the Google AdWords Industry Benchmarks, the automotive sector enjoys a rather high CTR score (4%), while the technology, B2B, and customer services segments have a lower CTR indicator (2-2,5%).
Click-through rate as one of the most important lead generation metrics
Just like the conversion rates, cost per customer, cost per click, and other popular metrics, CTR measurements are used to see the effectiveness of a lead generation campaign. It shows how many targeted users have clicked the links that were offered by the lead generation channel.
Additionally, CTR helps to see the proportion of the number of website visitors who clicked the link to the total quantity of lead generation recipients. If the percentage is low, it is a sure sign to work on your content. At the same time, a high CTR score demonstrates a good response from the audience.
Using the CTR metrics can lead to the improvement of any lead generation campaign. A comprehensive CTR analysis can help adjust the lead generation strategy and come up with further thought-out actions that will bring better results.
CTR is also widely used to improve the results in other digital marketing campaigns. Among them are:
- PPC (pay-per-click) advertising
- SMM (social media marketing)
- Email marketing
Speaking about email marketing and CTR, it’s important to note that CTR is considered to be the most critical metric for any campaign. It’s often used paired with the open rate metric. Marketers compare the results of these two metrics to see the following statistics:
- How many people usually open emails
- How many recipients click the link in the message
Email click-through rate
Email CTR is aimed at measuring the number of people who clicked at least one available link in the message. CTR in email marketing helps to understand the quality of the email copy and its performance. To calculate email CTR, perform the following three steps:
- Take the total number of recipients that clicked the link you added to your email
- Divide this score by the number of messages delivered to recipients
- Get a ready percentage – multiply the result by 100
For instance, you sent 1,000 letters and know that 43 recipients clicked the link that had been placed inside the message. Use the formula to calculate CTR:
CTR = (43 / 1000) x 100
CTR = 4.3 %
This score is a good result for email marketing. It means that you have an excellent engagement. Marketers consider CTR as the level of the engagement rate. A high open rate score doesn’t mean that people are interested in the information provided in the letters. CTR is the metric that tracks the leads’ interest in your offer.
Top 3 ways to make email CTR score higher
Marketers often search for efficient methods to improve CTR, so here’s a list of tips that can help increase the CTR score of your email marketing campaign:
- Make your content engaging – the quality of information should be extremely high. Texts, pictures, promotions, and other data should be attractive.
- Take into account the CTA (call-to-action) aspect. The stronger the CTA, the higher the CTR.
- Focus on your target audience – you can optimize your email campaign using audience segmentation. Divide all the potential customers into several groups. All the categories will have different needs and specific content.
Wrapping it up
Experts name CTR as a ranking signal, which makes it an important self-analytics constituent of Google’s RankBrain algorithm. Do not neglect this metric and use it to improve your digital marketing campaigns.