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 in 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 optimization can certainly contribute to the ranking of a website (URL). To understand this, one must 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, the organic ad and not the underlying landing page).
If this is low (in Google’s ‘eyes’) compared to similar search results, then the snippet will be ranked significantly worse in the long run and thus receives fewer impressions and even fewer clicks. In SEO, the first optimization approach (Quick Win) is to optimize 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 bounce rate and Ausstiegsquote Bounces can also be recorded by the search engine and are included in the relevance assessment.
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 it prevents eine mögliche Conversion verhindert wird.
Click rates in SEA – An example
One 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 very inadequate, as your click prices will gradually rise to the maximum bid on Google or Bing Ads, since the ad is considered less relevant (Quality Score).
Insufficient relevance can only be compensated in this channel with a higher budget. The “Return on investment” (ROI) or the cost-revenue ratio (KUR) will therefore be significantly worse in the online marketing channel, and the margins will increasingly shrink. In other words: “Less sticks.”
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 will 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, then 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, one should always ensure that the ratio between impressions and clicks is increased. Optimize, test, optimize … 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, there is no blanket answer possible at least across the board.
But even for example affiliate marketing or other channels, no blanket statement can be made here. It depends on the industries, the product range, the level of optimization, and the assortment design (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 dumping 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 optimization.
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 do 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 optimization, the competition, the industry, etc.
Do you want to improve your click-through rate and need support? Then contact us gladly! Do you want to learn more or have your team trained on this topic? Then take a look at our analytics seminars.
