CTR (Clickthrough Rate) is a critical metric for determining the success or failure of any ad. The higher your CTR, the better performance your ad is getting.
What is CTR?
CTR is the number of times a user clicked on an ad divided by the number of times the ad was seen (impressions). Analyizing your CTR requires website analytics, or data provided by the social media platform.
For example, let’s say you had a Facebook Ad that people saw 1000 times but was clicked on 20 times. 20/1000 is .02, which means your ad would have a CTR of 2%. You want the CTR of any advertisement to be as high as possible and can compare your CTR to industry averages or trend it over time.
Why Does Having a Good Click Through Rate Matter?
Here are some of the benefits of a high or improving CTR:
More web traffic
There is no question that driving a high CTR means more people navigating to your website or the desired location in your ad. This increases the chance of individuals taking a desired action.
Higher quality score = lower CPC (cost-per-click)
Remember, major platforms that sell ads — such as Google or Facebook — want to keep their readers happy and encourage them to return. As such, platforms want to serve their readers with highly relevant ads that contain useful content. Platforms like this give advertisers a quality score, and a higher quality score means you will have reduced CPC (cost-per-click) pricing on future advertisements.
Testing and optimization
Comparing CTR allows you to understand why your ads do or don’t perform well. Then, you can replicate that in future ads if you know what works — copy, the product, or the image used. Likewise, if you know an ad isn’t working, you can adjust it for the future.
What Is a Good Click Through Rate?
It is difficult to answer the generic question of what a good click-through rate is, as different answers depend on various factors. These include:
The industry of an advertisement is arguably the most important benchmark when determining exactly what is a good click-through rate for your advertisement.
Some industries — such as arts and entertainment, beauty and personal care, real estate, and travel — have higher click-through rates, typically 9-11%. Other industries —such as legal, business services, and home improvement — have lower click-through rates, ranging between 4% and 6%. It is impossible to determine what is a good CTR without first understanding the benchmark industry that you are in.
Some platforms have higher CTRs than others, altering your ability to gauge the success of your ad and meaning that you may have a harder time determining just what is a good CTR for your ad.
The success of previous advertisements
What is considered a failure for another person’s ad may be a win for yours. For example, consider the following scenario: Suppose you had five advertising campaigns with a 4% CTR. Let’s say your next campaign had a 6% CTR. That would represent a 50% improvement and likely be considered a “good” click-through rate for your business.
How Can I Improve My CTR?
You will want to do whatever you can to improve your CTR. This can include taking multiple steps, including:
Engage in A/B testing
A/B testing serves an almost identical advertisement to a similar audience, with one alteration (be it of the copy, image, or CTA). You can then determine which ad works better and use that information to guide future advertisements.