What is Click-Through Rate: Everything You Need to Know

Summit Ghimire July 6, 2022 - 5 minutes to read
Click through rate

Click-Through Rate or CTR refers to the percentage of visitors that click on a specific item that a website presents them to. In other words, it is a metric that measures the number of clicks advertisers receive on their ads per number of impressions. 


It is a known fact that search engines place a high value on a good CTR. For instance, in the pay-per-click model, the more clicks received, the more money search engines can generate. However, CTR is also essential to advertisers.


Visitors use search engines when they have a question and are looking for an answer. And as we know, search engines are so great that they tell what users are exactly looking for! Therefore, creating a relevant ad is the first step in fulfilling that need.  


This blog will explain what click-through rate is, what a good CTR is, how it impacts your ad rankings and when a low CTR is okay.


What is Click-Through Rate (CTR)?


CTR is the percentage of impressions that resulted in a click. For example, if there are 250 total clicks and 500 people saw it, that means you have a 50% click-through rate. Also, CTR helps show you how relevant your ads are for searchers. 


If you have a high CTR, that means searchers find your ad highly relevant, whereas a low CTR means less relevant. 


The goal of any PPC campaign is to get qualified leads to come to your website and take the desired action. For example, making a purchase, filling out a form, downloading a guide, etc.). CTR is the first step to improving the relevance of your ad and generating those desired results.


Examples of Click-Through Rate


Few common examples of where CTR can be used and measured include:

A call-to-action link in an email

A hyperlink on a landing page

A PPC ad on a search engine results page

An ad on social media such as Facebook, Instagram, or LinkedIn


What is a Good CTR?


A good CTR depends:

on your industry

the set of keywords that you are using related to your niche

individual campaigns that run within a PPC account. 


Does CTR Impact Your Ad Rank?


Ad rank decides the position of your ad on the search results pages. Therefore, CTR also plays a part in your Ad rank in the search engine. PPC campaigns are not like auctions, where the top position goes to the highest bidder but to the advertiser with the highest AD rank. And CTR has a contributing factor in the Ad rank formula.


However, Ad rank is more complicated than we think it is. Google measures the expected CTR against your actual CTR. For instance, if you have run many ads with a low CTR, Google will assume that any new ads you add to your Google Ads will also have a low CTR and might rank them lower on the page. Therefore, it is essential to understand the role of CTR in your ads and try to improve them.


How Does CTR Impact Quality Score?


A Quality Score is a measure that helps you to understand how well your ad quality is compared to other advertisers. This can be related to your ad content, keywords, and landing pages. 


A Quality Score is high when your ads and landing pages are more relevant. It is calculated by the search engine’s measurement of expected CTR, ad relevance, and landing page experience. Therefore, a good CTR will help you increase your Quality Score.


CTR and A/B Testing


CTR is an insightful tool when conducting A/B testing. If a website runs an A/B test for conversions on a product page, the conversion objective would be the number of product purchases completed by the customers. 


Another metric that can be monitored is the CTR of shipping information. If the shipping information has a high CTR, it shows potential customers are interested in the shipping process. In this instance, it is beneficial to research the shipping information process and page further to gain insights and improve and increase conversions.


CTR is also a handy metric in conversion optimization. It helps identify user behavior and interest and can be used to build insights during A/B testing. Therefore, CTR can help to give a holistic view of user behavior in A/B testing. 


So, When is a Low CTR Okay?


You could write “Free Macbook” and get you a great CTR, but unless it is a measure of business success for your company, such ads won’t help your business become profitable. Therefore, focusing on your business metrics first, then CTR is important. 


For example, if your goal is to sell many products as possible at the lowest cost, then you should optimize PPC campaigns for cost per sale. In the same way, if you want to generate more leads under a certain cost per lead, then optimize campaigns for cost per lead.


It is important to note that unless your goal is to drive a high volume of PPC traffic, CTR should not be your main KPI. Low CTR doesn’t necessarily mean it’s a bad thing. There are times when a low CTR is absolutely okay! For instance, when you are dealing with keywords that are ambiguous in nature. When you have an ambiguous keyword, break it down and make it more specific to your niche. 


Don’t let a low CTR stop your ad campaigns unless it is not bringing anything to the table. Despite a low CTR, if you are getting a high lead volume, let performance be your guide. Low CTR is absolutely okay if your ads and keywords perform well based on your business goals and objectives. 


Click-Through Rate Takeaways


Click-through rate is an important metric that should be monitored to understand how your campaign performs. Optimizing for CTR can lower your website’s bounce rate and increase conversions. While optimizing for CTR, don’t forget to optimize your business metrics to help lead a successful campaign.