What is Click-Through Rate and what can I do to improve it?
April 6th, 2022
Click-Through Rate is the number of clicks your ad receives divided by the number of times it's shown (impressions). For instance, if your ad ran 100 times and received 10 clicks, the CTR would be 10%. The higher the CTR, the more successful your ad is at receiving clicks.
Theoretically, a high click-through rate would mean that users are interested in clicking on an advertisement for specific keywords related to what they're searching for. However because ads can be targeted to multiple locations or particular demographics - like age range or location - the click-through rate doesn't tell you anything about how many people actually saw and/or interacted with your ad. Many factors play into an overall level of success which creative quality, relevance to user intent, and appeal all contribute to.
In short: Click-through rate is one factor used in determining an ad's performance. In isolation, it does not provide a complete picture of the success of an advertisement. Determining whether or not your ad performed well requires further analysis including but not limited to keyword research to understand what users were clicking on in relation to branded keywords, CTR history in conjunction with Quality Score over time, and relevance to user intent through in-depth website analysis for corresponding campaign data. Click Through Rate is a number that measures how many people click on your advertisement when it appears next to search results or content related to its content/keyword targets. Click-Through Rates are measured by Google based on impressions served and clicks. The higher the click-through rate, the more successful your ad is considered to be
A "click" is a button on an advertisement that leads users to a landing page, where they can read details about and purchase services or products associated with the brand. An effective ad's message must quickly and clearly give consumers a reason to click it by explaining what value there is in doing so. A high click-through rate indicates that users are interested in clicking on an advertisement for specific keywords related to what they're searching for, but because ads can be targeted to multiple locations or particular demographics - like age range or location - the click-through rate doesn't tell you anything about how many people actually saw and/or interacted with your ad. Many factors play into an overall level of success which creative quality, relevance to user intent, and appeal all contribute to.
So how do you determine whether or not your ad performed well? Well, it's rarely wise to rely on just one number in isolation for assessing the effectiveness of your advertisements. Determining whether or not your ad performed well requires further analysis including but not limited to keyword research to understand what users were clicking on in relation to branded keywords, CTR history in conjunction with Quality Score over time, and relevance to user intent through in-depth website analysis for corresponding campaign data. Your clickthrough rate is a valuable piece of information but only when viewed alongside other factors that are vital towards understanding the performance of your advertisement. For example when compared against your competitors, your industry's average clickthrough rates, or the average CTR of ads on your site (if you’re advertising on someone else's website). Click-through rate can be used to uncover which keywords are most relevant to users, what messaging resonates best with consumers, and ultimately how you can improve ad performance.
Click-through rates tell advertisers how well their ads are performing, but they don't provide insight into what is happening before someone clicks. For example, if a large number of people click on an advertisement but then close it before even opening it - that counts as a 'click' but the advertiser doesn't have any idea why that user made that choice. Perhaps they were just curious about in particular? Perhaps the advertisement didn't meet expectations and the user didn't want to find out? Perhaps they were actually interested in learning more but felt there was too much information on the landing page and decided not to apply at all?
The answer is: we don't know. But we do know that click-through rates provide a window into how many people are viewing an ad and then choosing to interact with it, which can often be just as valuable as knowing what reasons lead them there in the first place.
When looking closely at your click-thru rate, it's important to determine if this particular percentage is higher than your industry average or lower, and whether or not it seems to be improving or getting worse over time. This will help you uncover what kinds of ads users are more likely to click on and allow you to adjust your marketing strategy accordingly.
If a click-through rate is lower than what's normal for your industry, look back at what ads have been serving up previously. If they've been performing well it might be time to experiment with new messaging or creative elements to see if there any changes can be made to make them stand out from the competition. In contrast, if no changes have been implemented and the numbers continue dropping perhaps it’s time to delve deeper into why this is happening. Are fewer people seeing your campaigns? That could be due to an increase in spending within a campaign as a general lack of spending may decrease performance. Does your website provide a poor user experience or fail to meet user needs? If so, try enhancing the user experience throughout the site through enhancements to elements such as design, layout, content, etc.
This can be used to determine which ads are performing better than others and adjust campaign strategy accordingly. One example is if you see that one ad is getting more clicks but lower conversions than another ad, rather than push for more clicks on that particular ad it would make sense to instead focus your efforts on optimizing the ad that provides higher conversion rates. Once you've implemented changes in these areas this information will start to become much clearer over time using click-through-rate as a benchmark for success.
Nowadays there are many tools available for analyzing CTR including Google Analytics' 'Conversions' report under Customization > All Sessions. If you're on Google Adwords it's also easy to view click-through rates - just navigate to Campaign > Keyword.
One way of monitoring your click-through rate is by using a statistical tracking method called 'A/B testing' which allows advertisers to run additional tests with minimal effort and quickly compare performance against control groups. For example, if you were advertising two different messages in the same campaign, an A/B test would allow you to monitor which ad performs better over time and make adjustments accordingly. CTR can not only be monitored for individual ads but entire campaigns as well - either separately or in comparison to other organizations'’ performance. This is what we do when monitoring our competition - by their click-through rates we can determine what they're doing that resonates with their target audience and then adjust our campaign strategy accordingly.
A/B testing can be a valuable tool for monitoring CTR as well as the overall success of your ads. If you continually find that one ad performs better than another, don't be afraid to make adjustments after determining why this is the case. In addition to monitoring click-through rate, A/B tests can also be used to test landing pages, different call-to-action messages within an ad, new creative elements, etc. However, remember not to overwhelm users with constant changes as it's unlikely that they'll continue engaging with your ads if they feel like everything keeps changing all the time. So by constantly making small changes and tracking how each ad performs over time, you'll start to see which ads are more successful and gain insight into what elements of your marketing strategy resonate best with your target market.
This is how it works in Google Adwords:
- Open the Keyword tab in Adwords
- Select "Columns" from the menu bar on top
- Select "Modified CTR" from the list
- The new column will display the click-through rate for each keyword, in addition to regular CTR data - this number reflects the percentage of clicks out of all impressions served up to that keyword in the last 30 days. So basically if one keyword gets lots of impressions but few or no clicks then its modified CTR will be below. On the contrary, if a keyword gets few impressions but lots of clicks, its CTR will be 100.
- In Google Analytics it is also possible to monitor click-through rates by going to:
- Audience > Overview > Click Through Rate
By now you should have a better understanding of not only what click-through rate is, but how it can be used as a benchmarking metric for performance analysis and determining which elements of your online marketing approach are most effective. With this knowledge, implement changes in these areas along with A/B testing to compare the results which will give you more insight into what works best for your target market. This will allow you to adjust your strategy accordingly so that you're constantly staying one step in the competition. In so doing, you'll discover which ads resonate best with your target market and ultimately gain an advantage over other online marketing approaches.
