Glossary

Your go-to resource for acronyms, jargons, terminology, and useful words for product and customer experience teams.

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Click-through rate (CTR)

What is CTR?

Clickthrough rate (CTR) is a ratio that shows how often people who see your ad or free product listing end up clicking it. You can use CTR to gauge how well your keywords and ads, as well as your free listings, are performing. 

To calculate CTR, divide the number of clicks your ad receives by the number of times your ad is shown: clicks Ă· impressions = CTR. For example, if your ad was shown 100 times and received 5 clicks, then your CTR would be 5%.

Each of your ads, listings, and keywords has its own CTR that you can view in your account.

A high click-through rate (CTR) means that users find your ads and listings helpful and relevant. A good click-through rate is relative to what you’re advertising and on which networks. You can use CTR to gauge which ads, listings, and keywords are successful for you and which need to be improved. 

If you want a high CTR, make sure your keywords, ads, and listings relate to each other and your business. This way, users will be more likely to click on your ad or listing after searching for your keyword phrase.

What Is a Good CTR?

What is a good click-through rate (CTR)? This is a question that clients ask me frequently.

The answer, as with many things in pay-per-click (PPC) advertising, is that it depends.

Relative factors that affect CTR include:

-Your industry

-The set of keywords you’re bidding on

-Individual campaigns within a PPC account

For example, it’s not unusual to see a double-digit CTR on branded keywords when someone is searching for your brand name or the name of your branded or trademarked product. Likewise, it’s also not unusual to see CTRs of less than 1% on broad, non-branded keywords.

How CTR Impacts Ad Rank

CTR (Click-Through-Rate) is a metric that not only indicates how relevant your ads are to searchers but also contributes to your Ad Rank in the search engines. Ad rank determines the position of your ad on the SERP (search results page). Therefore, PPC (pay-per-click) isn’t a pure auction after all.

Your ad’s position on the search results page is determined by your ad rank. The top position isn’t given to the highest bidder; it goes to the advertiser with the highest ad rank. And CTR is a massive factor in the ad rank formula. However, ad rank is even more complicated than that. Google measures your actual CTR against an expected CTR. So, if you have a history of running ads with a low CTR, Google will assume that any new ads you add to your Google Ads account are also going to have a low CTR and may rank them lower on the page as a result. A poor CTR can lead to low ad positions, no matter how much you bid.

How CTR Impacts Quality Score

Quality Score is a measure of an advertiser’s relevance as it relates to keywords, ad copy, and landing pages.

The more relevant your ads and landing pages are to the user, the more likely it is that you’ll see higher Quality Scores. Quality Score is calculated by the engines’ measurements of expected click-through rate, ad relevance, and landing page experience. A good CTR will help you earn higher Quality Scores.

When a Low CTR Is OK

CTR (Click-Through-Rate) is important, but it’s not the only metric you should focus on. Other metrics, like conversion rate, are important too. A high CTR doesn’t necessarily mean an ad is successful. For example, an ad saying “Free iPhones!” would probably have a high CTR. But unless giving away iPhones makes me money, the ad isn’t successful.

Business metrics should always be your primary focus, with click-through rate (CTR) as a secondary concern. CTR shouldn’t be your main key performance indicator (KPI) unless your business goal is to generate a high volume of PPC traffic.

Some ambiguity is inevitable in any PPC program. This is because people may use broad keywords when searching for your product or service, and these keywords can have different meanings to different people.

The term “security” can mean a lot of different things to different people. For example, someone might be looking for:

– Credit card security

– Financial security

– Data security

– Home security

– Security guard jobs

And that’s just a few examples I thought of off the top of my head. As you can see, the keyword “security” is quite broad and your CTR (click-through rate) might not be great. However, if you’re getting a lot of leads from that keyword at a good cost, then you shouldn’t pause that term just because of a low CTR. Always let performance be your guide.

CTR (click-through rate) is a very important metric for PPC managers to understand and keep track of. A low CTR can be completely fine, as long as your keywords and ads are performing well about your business objectives.

Conclusion

In conclusion, CTR is an important metric for PPC managers to understand and monitor. Optimizing for CTR, while also optimizing for business metrics, will lead to successful PPC campaigns.