Click Through Rate ( CTR )
Lead generation and its eventual conversion is the bedrock of any ad campaign embarked upon by business owners or digital marketers. Even SEO enthusiasts are keenly aware of the importance of getting results with any marketing strategy. For a fact though, time and money are at risk. Certain metrics can help you monitor the performance of an ad campaign. One of such valuable metrics you should be using is the CTR, which simply stands for 'Click Through Rate'. A high Click Through Rate value reveals that your ad has generated more interest and your audience finds it to be engaging. But there is even more to it. Here, you will find all there is to know about Click Through Rate (CTR), why you must monitor it, how to optimize it, as well as its relationship with paid advertising.
What is the Click-Through Rate?
Simply, "Click-Through Rate" can be defined as the number of times a link or an advertisement has been clicked. Click-Through Rates (CTRs) are usually indicators of whether an online advertisement campaign now successful or not. CTR can be used to determine quite a number of things. With tools like Google ads, CTR will determine whether you end up with a great quality score or not. In the digital marketing click-through rate is a metric used to measure the trajectory of the campaigns that are. Search engines place a lot of importance on CTR. This is because the metrics from Click-Through Rates can also determine whether your ad is relevant by the search engine users. If your click-through rate shows that your ad is not relevant to the search, the quality score decreases.
How is CTR calculated?
Click-Through Rate is calculated using the number of times your ad has been clicked and the number of times your ad was shown. It is essentially the number of times the ad was clicked, divided by the number of times the ad was shown. The number of times the ad is shown is referred to as impressions. It is worthy to note that while there may be high impressions, it does not always translate to clicks. Impressions only show the number of people that have seen the ad. Depending on the type of ad displayed and its target market, there may be huge disparities between the impressions made by an ad and the actual clicks.
Here is an example of how Click-Through Rates are calculated. If an online advertisement has been clicked 500 times after being displayed 2000 times then 500 (clicks) is divided by 2000 (impressions). This outputs 0.25, which is then multiplied by 100 to get a percentage. The click-through rate for this sample advert will, thus, be 25%.
Why is CTR important?
The Click-Through Rate indicator is very important for several reasons. Some of these reasons are:
Click-Through Rates provide valuable feedback about the effectiveness of adverts. Click-Through Rates can be used as a report to see whether the advert is being engaged by the target market. It can also indicate whether or not the adverts are effective in selling the products or services.
Specific marketing channels
One thing with Click-Through Rates is that they can be measured in emails, websites, blogs, and several other places. Click-Through Rates can also prove to be a clear indicator of which marketing channels are more useful than others. For example, Click-Through Rates can show that clicks from cold emailing are higher than the clicks gotten from blog posts. This is treated as a valuable output when conducting online marketing campaigns.
Click-through rates also have an effect on your ad rank asides being able to determine whether your ad is relevant or not. In what way? If you have a high click-through rate then it would be clear that your advert is relevant and your rank would increase accordingly. Therefore, the Click-Through Rates of your ad will undoubtedly affect your ad ranking and this will also affect a lot of other things.
Lower Costs Per Clicks
A high number of Click-Through Rates can drastically reduce the amount of money spent per click. While it may not seem like a lot, in the long run, it adds up and is very important. The method by which AdWords determines the price you pay per click is by multiplying your given quality score by the bid price. The quality score is a result of CTR. When you have a lower Cost Per Click then you have more money to drive into making a better advert in different locations.