Click-through Rate is the number of clicks that your ad receives divided by the number of times the ad is shown.
Not everyone will click the ads while they are browsing online. Hence, the relevance of ads is said to vary.
You went out shopping at a sweet shop which also had a chat counter. In one hour, about 50 people came to buy sweets as it was a festival. But only 20 of them stopped to eat the chart. This is exactly the same as the click-through rate.
People click on online advertisements only when they have interest in it. The rate defines the number of users who click in a specific link to the total number of users who view the ads.
CTR helps to measure the success of the advertisement or the campaign that helps the brands generate revenue.
A high click-through rate is favourable as it informs that a high number of users are clicking on the website. A good click-through rate for an email campaign ranges from 1% to 5%.
Pramod owned an apparel brand in the name of Pramod Fashions. He wanted to expand his market in new territories.
The business was completely online which motivated Pramod to run an ad campaign. In a few days of running the campaign, Pramod observed that out of total 1000 impressions, 500 people clicked on the ad.
The figures indicated that the CTR was 5% =(50*100)/1000. The CTR was good hence Pramod decided to run the campaign for some more time.
Importance of CTR
CTR is important because it helps you to understand your customers. CTR helps you identify what actually worked when you were trying to reach your target audience.
- If you probably have a low CTR, it signifies that you are targeting the wrong audience.
- It also means that your content does not pursue the clients and convince them.
- CTR also tells Ad Rank in the search engine which determines the position of your ad on the search results page.
Remember that it could be possible, if you have a low CTR for multiple ads, Google might think that any new ad will also have a low CTR. A poor CTR can lead to low ad positions, even if you bid high.
A high clickthrough rate implies that the quality score is high. And a high quality score allows you to improve and maintain ad positions for lower costs.
Instance when higher click-through rate is bad for business
In these instances, high click-through rate can be bad for business:
When you are paying for every click.
- When the ad spends increase due to lots of clicks.
- If the click is on the keywords that are highly priced. These keywords will not drive profit for the business.
- If there is a high usage of irrelevant keywords which means spending money without bringing additional revenue.
Ways to achieve a high click-through rate for your ads
Achieving strong click-through rates for your ads can be improved by:
- Bidding on targeted keywords.
- Making cost-efficient clicks.
- Closely integrating keywords with ad text and landing pages.
- Segment keyword groups for close targeting.
What factors affect CTR?
These are the factors that affect the click-through Rate (CTR):
- Call to Action
- Ad Positioning
How to improve the CTR?
You can improve the CTR by working on these:
- Use the best ad extensions like sitelinks, call extensions, promotion extensions, price extension, etc. that improve the reach with the target customers.
- Use smart bidding strategies that allow Google to automatically push your ad in auction when there are higher chances of getting clicks.
- Improve the quality score of the advertisements. The keywords used in the ads define the score of the ads from 0 to 10. It also indicates the relevance and quality of advertisements. Ad with higher quality score helps brands higher rankings and the cost of advertisers is less per click.
- Create different types of ads because the ads with responsive texts are more likely to receive higher click-through rates.