Click-through rate (CTR) is the percentage of people who click on a specific ad or a link when seeing it. It is calculated by dividing the number of clicks by the number of times the ad was shown (impressions), expressed as a percentage. For example, if an ad was shown to 100 people and 5 of them clicked on it, then CTR is 5%.
The purpose of CTR is to measure the effectiveness of an advertisement or email campaign. The higher the click-through rate the more engaging is the campaign. Seeing which campaigns engage people more and which don’t, helps companies determine what kind of advertisement works for them. Low CTR could indicate that the company was targeting the wrong audience, the language used was not persuasive or engaging enough, or the keyword they paid for was not quite right. High CTR on the other hand indicates that the message used spoke to the targeted audience in the right context.
It is important to keep in mind that a high CTR doesn’t always mean that the campaign was a success. For most companies, just clicking on a link is not enough. We want the customers to actually use our services or buy our products. CTR doesn’t inform us about the number of sales the ad generated. Because of this, the conversion rate might be a better indicator of a campaign’s success.
