As a marketer, you’ve probably heard the term “click-through-rate,” or CTR, before. You know it is an important metric to pay attention to with an online advertising campaign. Generally, the belief is that that the higher a CTR, the better the campaign performed. But does a high click-through-rate really equal campaign success? What does a “click-through-rate” really mean?
A click-through-rate is the ratio of clicks your ads receive to the number of ad impressions
CTR = (clicks/impressions) x 100%
Today, more and more marketers are running multi-platform campaigns. Each of these individual efforts ties into each other and drives a consumer further down the sales funnel over time. If you are only looking at CTR and not relating it to your other campaigns, you are not getting the most out of your marketing initiatives. For example, if you are looking to drive traffic, then the main metric of success isn’t CTR, but time spent on site. There are several misconceptions about CTR and just how important of a metric it is. For the essence of clarity, here are the top 3 misconceptions about CTR.
Misconception #1: A high CTR is everything.
A CTR lets you know how many people are clicking on your ad. A CTR is important when running any online advertising campaign because it can determine whether or not your ads will be shown. Most online advertising platforms, such as Google AdWords, Facebook, and Bing, use CTR to determine your quality score. The ads that are clicked on the most are deemed the most relevant to a consumer’s query and therefore have a higher quality score and are shown more often, in a better position. If your ads have a low CTR, not only are they not getting clicked on, but they are also not showing up as much as they should, limiting your audience.
A higher CTR can also mean a lower cost-per-click. However, a CTR is not the end all be all when determining the success of a campaign. A CTR only tells you the number of times your ad is clicked on. It doesn’t tell you what happens after someone clicks on your ad—whether they engage with your brand, spend time on your website, or convert into customers or subscribers. A CTR doesn’t tell you the quality of your visitor either, for example a single click can originate from malicious bots. Combat click fraud with this checklist. It is important to also pay attention to other metrics such as bounce rates, time spent on site, pages visited, and conversions to determine the overall success of an online campaign and optimize accordingly. A CTR is only one piece of the puzzle.
Misconception #2: There is an average CTR.
Average CTRs vary by industry. Some industries are more competitive than others and each industry has an average CTR so you should be measuring your click-through-rate accordingly. As you continue to optimize your online advertising campaigns, you will notice that your CTR will improve beyond your industry average.
Average CTRs also vary depending on the style of the ad (search ads, display ads, etc.) and the advertising platform you might be using (AdWords, Facebook, LinkedIn, mobile ads.) The audience and targeting, B2B or B2C, branded or non-branded, ad copy and creative messaging (CTA), type of offer, display URL, and keywords placed in the search funnel can also affect CTRs. Average CTRs may also vary depending on campaign goals, language, and distribution. All of these factors determine what CTR you should aim to have. According to the Interactive Advertising Bureau (IAB,) “there is no reliable service that tracks CTR [as a] CTR is highly subject to creative effectiveness which is very campaign specific.” So if you think your CTR is too low, remember a good CTR is relative and you might be in line with the average you are looking for.
Misconception #3: A high CTR will lead to more sales.
Another thing to keep in mind is that while a high CTR is a good thing, it doesn’t necessarily mean that it will lead to more sales. There are several factors that can contribute to a conversion and several other metrics you should be paying attention to. Think of your website as your virtual store. A high CTR can bring multiple people to your store, but if it is not inviting, or hard to navigate, if it does not have the prices or products consumers are looking for, they will leave (or bounce) and not buy anything. Entice consumers with appealing web design and great content on your site. These factors are not to be overlooked because they help boost your conversions, and if done correctly, will help move consumers further through the sales funnel.
Conclusion
A click-through-rate is an important metric to keep track of in order to gauge which ads are attracting the most clicks and are therefore shown preference by search engines, but by no means does this measurement determine the overall success of your campaign. As a marketer, you must pay attention to engagement metrics, as well as CTR and conversion rates, in order to fully optimize your digital marketing campaigns.
Are you committed to making your campaign a success? Follow these 6 Keys to Paid Search Marketing Success and share your thoughts and opinions on CTR in the comments section!
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