What is the Click-Through Rate (CTR)?
The Click-Through Rate (also known as CTR or click rate) describes the ratio of impressions of an advertisement to the clicks achieved, as a percentage. This number indicates the ratio of how many people not only saw an ad but actually clicked on it. The CTR is considered an important indicator in online marketing of whether an advertising measure was successful or not. However, it also plays an important role in organic search results of SEO, as it can influence the ranking there.
Calculation of the Click-Through Rate
The click-through rate can be easily calculated using a mathematical formula:
CTR = Number of Clicks / Number of Impressions * 100
If an advertisement is displayed 1,000 times and 40 users click on it, the click-through rate is 4 percent.
CTR Calculator
Here you can easily calculate the Click-Through Rate (CTR). For this, enter the total number of clicks on your ad under “Clicks” and the total number of ad impressions under “Impressions”. The CTR will be calculated automatically from this.
CTR in Online Marketing – Evaluation & Classification
The click-through rate is evaluated differently in paid search engine advertising than, for example, in Affiliate Marketing, SEO, or other online marketing channels. It also always depends on where exactly the CTR is measured.
CTR in SEO – An Example
The click-through rate in search engine optimisation can certainly contribute to the ranking of a website (URL). To understand this, you need to know that Google measures the click-through rate in organic search results. So when a website is displayed as a snippet for a user search query on the search results page (SERP), the search engine records this as a so-called impression. Google also counts the clicks and then evaluates the relevance of the search result based on the CTR (that is, of the organic listing and not yet of the underlying landing page).
If this is low (in Google’s ‘eyes’) compared to similar search results, then the snippet may be ranked worse in the long run and will thus receive fewer impressions and even fewer clicks. In SEO, the first optimisation approach (quick win) is to optimise the page title and page description because ideally, the snippet consists of these elements.
The click-through rate on the respective URLs of the domain is then related to the bounce rate and exit rate. If users quickly return to the results page after clicking, the search engine can register this as well. That Google uses such click signals for ranking has been documented since the 2023 US antitrust trial (the “Navboost” system). The bounce rate from Google Analytics, by contrast, is not used.
For exits that do not stem from direct bounces, the search engine can no longer determine this. Nevertheless, it is also frustrating within SEO (as with all online marketing channels) because, among other things, it prevents a potential conversion.
Click Rates in SEA – An Example
You might say that if you don’t get clicks on your ads in SEA, you will have to pay less. Because only the click costs money (CPC). This is true, but it is still a very poor outcome, as your click prices can gradually rise on Google Ads or Microsoft Advertising, since the ad is considered less relevant (Quality Score).
Insufficient relevance can only be compensated for in this channel with a higher budget. The “Return on investment” (ROI) or the cost-revenue ratio (CRR) will therefore be significantly worse in the online marketing channel, and the margins will increasingly shrink. In other words: “There is less left over.”
However, if the user does click, then again – as mentioned earlier in the SEO example – the bounces and exits come into play.
Bounces behave the same way as in SEO. The more users “bounce,” meaning they leave quickly, the more money you spend, as the click price is now due. The search engine may notice these bounces and consider the landing page to be less relevant. Result: Click prices (CPC) can also rise as relevance falls.
And if there are no bounces, exits can increase costs, because here too a conversion is made impossible.
The examples could be expanded indefinitely for all relevant channels. In any case, you should always ensure that the ratio between impressions and clicks is increased. Optimise, test, optimise … as always in online marketing.
What is a good click-through rate?
You will see that each online marketing channel has different CTRs, just as all benchmarks are always channel-specific. Therefore, no blanket answer is possible, at least not across all channels.
But even for affiliate marketing or other channels, for example, no blanket statement can be made here. It depends on the industries, the product range, the level of optimisation, and the product range planning (in e-commerce) or pricing. In an affiliate ad where a product is promoted that has an above-average or average price, the CTR will be lower. However, even if you offer rock-bottom prices, the CTR can be worse because competitors have better offers (bundles) or enjoy more brand awareness or have better payment options or, or, or…
It is simply impossible to say what a good and what a bad click rate is. What is certain is that zero is bad and 100% cannot be surpassed. In between, there is always potential for optimisation.
So do not be confused if someone mentions target CTRs to you. Based on our experience, it seems certain that a CTR above 3 to 4% is quite respectable and one above 20% can be astronomical. However, you can hardly rely on that either. – So don’t rely on it at all.
When a serious online marketing professional thoroughly engages with your website, they will soon be able to tell you likely realistic ranges. Depending on your advertising measures, the level of optimisation, the competition, the industry, etc.
Do you want to improve your click-through rate and need support? Then feel free to contact us! Do you want to learn more or have your team trained on this topic? Then take a look at our SEO seminars.
