Clickthrough rate (CTR) is a common term used in internet marketing to measure the success and effectiveness of an online advertising campaign. In this definition, learn what clickthrough rate is, why it’s important, and how it’s calculated.
In this definition...
What Is CTR (Clickthrough Rate)?
The Clickthrough Rate is a metric that measures the number of clicks on a link or a call to action (CTA) in relation to the number of impressions or the number of times people were exposed to the content.
CTR helps businesses to understand whether an online campaign is successful or not. A high clickthrough rate shows that the website has increased conversion rates, as it generates more traffic per impression. Optimizing clickthrough rate helps businesses to optimize SERP rankings and increase traffic to their websites, social media accounts, and online storefronts.
How Is CTR Calculated?
The clickthrough rate of an online advertisement is the ratio of the number of clicks people make on an ad divided by the number of times that specific ad is exposed to them.
Clickthrough Rate (CTR) = Number of clicks/number of impressions *100
If an online campaign generates 1,000 impressions and 50 clicks for the website or landing page, the CTR of the campaign would be 5%.
Clickthrough Rate vs. Conversion Rate
Conversion rate is a metric that measures the number of website visitors or app visitors who complete an action out of the number of total visitors to the website or app. The conversion rate is calculated by finding the ratio of the number of sales divided by the amount of traffic to the website.
Conversion rate is directly related to the business ROI and its profitability. In contrast, CTR is usually used to measure the success of online campaigns, including email marketing campaigns and other online advertisements. However, both metrics are important for businesses, and either one could be more useful depending on which marketing stage a business is trying to optimize
Measuring CTR is ideal for businesses that want to increase traffic to their website or other digital properties. Optimizing conversion rates is the right strategy for those who want to focus on increasing the number of sales.
Why Is CTR an Important Metric?
Measuring and optimizing CTR helps businesses get a broad view of their target audience and how to direct them to the website to take an action. CTR scores can show businesses whether their online advertisements draw the attention of potential customers or not. Ultimately, CTR provides businesses with the opportunity to restructure their advertisement strategy when it’s not successful.
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