Click-through rate is one of the primary tools marketers have for testing the effectiveness of their efforts, such as the effectiveness of calls to action that affect the amount of traffic or final leads they acquire.
CTR - what does it mean?
CTR, or Click Thru Rate, is one of the key performance indicators in online marketing. It is determined on the basis of the number of clicks divided by the number of displays. This is the basis for calculating CTR in e.g. a search engine, thanks to which we learn what percentage of people decided to visit our website after it was displayed as one of the results. The click-through rate is also useful for measuring the effectiveness of ads in social media, search networks or others.
What is a good CTR value?
There is no one "good" value for CTR that we should aim for, at least not in general, because CTR depends on the type of action or niche being measured and the resulting audience.
CTR in SEO activities - SEO and search engine optimization, depends primarily on the position achieved. In 2019, Backlinko, which is a recognized blogger in the SEO industry, analysed 5 million search results and showed that the first result had an average click-through rate of 31.7% which resulted in 10 times higher CTR than the results at the bottom of the page. A similar study was conducted by Ignite Visibility Group in 2020, which showed similar results - the click-through rate of the page in the first place was as high as 43.42%, on the 5th position, which is the middle of the first page, it was only about 10.95%, and on the 10th position, the last result on the page, it was barely 3%. No wonder that SEO is really about fighting for the first 3 positions of organic search results.
So if we want to free ourselves from SEO competition, we can buy ads on the search network, such as Google Ads. Buying ads at the top of the page, however, does not mean the same conversion as with organic traffic, because there is a sign next to the page that says "ad," which has a habit of declining our CTR. In the case of ads in the search network and competitive keywords, we can consider a good result as a few % click-through rate, although in the case of more niche words we can gather even double-digit results.
However, does the high CTR of a paid advertisement always have to be good? It turns out that it does not. Google Ads is usually PPC advertising, i.e. Paid Per Click, which means that we pay a given rate for each click. The rates vary depending on the keyword phrase from which you get a click, and sometimes they even depend on the time of day, but if you pay per click, a high CTR can generate both a big profit and a big loss, which depends on whether you get a final conversion on the page to which the click refers. That is why the most important thing in this type of ad is ROI, i.e. Return of Investment, which are earnings from conversion divided by the cost of advertisement - if it is above 1, we earn, if below, we lose.
In the case of social media advertising, the situation may be similar to SEO if we pay for views - in those cases, a high CTR should be considered "good," or similarly with Google Ads, when we settle for each click - we need to be watchful and carefully study the results. As a rule, it can be written that in the case of free traffic sources or ads billed for views, a good CTR is the highest possible. However, in the case of PPC ads good CTR is the one that does not generate random hits, but hits a well-defined target group that converts into sales.
How to correctly calculate our CTR?
The clickthrough rate always defines the number of clicks divided by the number of impressions. So, for example, if our website has been displayed in Google 1500 times and we have received 50 clicks, then:
50 clicks / 1500 impressions = ~ 0.03 * 100 = 3% CTR
However, it does not matter whether we are counting views and clicks in a search engine or an advertising unit, because CTR is a universal indicator assuming the quotient of clicks and impressions.
Of course, in most cases we do not have to count it ourselves, because almost all tools, such as Facebook Ads Manager or Google Webmaster Tools, count it for us. Still, this knowledge may come in handy when we want to calculate the effectiveness of particular Call to Action buttons on our website, e.g. how many people clicked a given button in the blog entry that redirected them to the mailing list sign-up page, and then how many of those people finally left their address or even took some further action.
