What is a Click-Through Rate (CTR)?
A click-through rate (CTR) is the number of clicks based on the overall impressions that an ad will receive. Essentially, this rate is calculated by dividing the total number of clicks by the total number of impressions delivering the rate at which one can determine if their ad received a good measure of engagement from visitors. For online advertisers this rate is very important to understand as it can determine the overall quality score for a brand’s advertisements which in turn can eventually lead to lower costs for displayed ads.
Why is a Click-Through Rate (CTR) Important?
For online advertisers CTR is very important in determining the relevance and success for paid online advertisements. Paid per click (PPC) campaigns are a great measure to drive traffic towards a website which means that the CTR should reflect a high percentage so that visitors are responding positively to the ads and as such are visiting the advertiser’s website. In the larger perspective, CTR contributes to the overall increased visibility of a website and its ranking on search engine results.
How Does CTR Contribute to Ad Rank
If ads receive a high CTR, then that rate will contribute to a better ad ranking position. Once a website receives a good Ad Rank, then that translates to higher ranking of a website within the related search engine results listing. However, the process that generates an Ad Rank is not simplistic in its calculation. Essentially, search engines can measure the Ad Rank by taking the actual CTR against the expected CTR. The reason as to why this method of calculation exists is for search engines to ensure consistency in higher CTRs awarding ads that are deserving of a higher ad rank. If an ad receives a consistently low CTR, then the search engine will anticipate that low score resulting in an overall low ad rank. Furthermore, when advertisers think of a high or low CTR, this essentially reflects the level of relevance users are searching for the website’s content.
How Does CTR Affect Quality Score?
A quality score for an advertiser reflects the entirety of a website’s relevance as it pertains to keywords, online advertisements and a company’s landing page. This is an overall assessment score that holistically looks at a company’s attempt to ultimately drive traffic to their websites. More importantly, it is used to determine the cost-per-click for advertisers. A strong Quality Score, reflecting higher relevance, may result in a low cost-per-click which is the ideal scenario in regards to the investment for online paid advertisements.
Email Click-Through Rate (CTR)
Another form of displaying and calculating CTR is through email campaigns. Interactive and dynamic email campaign templates can prompt readers to click-through their displayed ads that conveniently link directly back to the company’s websites. The appeal of this form of online advertisement stems from advertisers utilizing their Customer Relationship Management (CRM) systems and as such tracking the amount of clicks with the number of emails that have been delivered.
