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The Importance of Click Through Rates

Click-through rates (CTR) are arguably one of the most important success metrics when measuring digital marketing performance and effectiveness. CTRs help marketers to produce key insights on their campaigns and give clear indications on where to allocate optimisation efforts. Some marketers question the effectiveness of CTR in measuring performance and while CTR does not give you all the answers, ignoring CTR results could mean you are missing out on key opportunities to upscale your campaigns and effectively deliver the right value to your audience. In order to quantify the effectiveness and relevance of any advertising campaign, CTR should not be overlooked. Read on as we dive into this key metric and discover how you can use a good CTR to ramp up the effectiveness of your online advertising.

What are click through rates?

Click through rate (CTR) is a metric that analyses the engagement an ad generated. The number of people who clicked the Ad against the number of people that saw it. It highlights how well your Ad is resonating with your audience. Contrary to what some digital marketers may believe, it is an important metric to monitor because it assists in measuring the success of your advertising campaigns, supports ad optimisation and can help generate more sales.

CTR can be utilised in a multitude of mediums including PPC ads, email advertising, links on landing pages and Facebook ads. It’s even relevant for organic channel metrics, which we will discuss later.

How do You Calculate Click Through Rate?

To provide you with an example of how to calculate CTR: if your PPC ad has 100 impressions and one click, that is a click through rate of 1.0%. Therefore, it is the rate at which your ads are clicked, offering a percentage of people who view an ad and then actually proceed to click the ad. You can calculate click through rate using the following formula:

When producing a PPC campaign, the ultimate goal is to get qualified users to visit your website and perform the desired action. Click through rate is the first external step (ie. before users land on your website, app or other) in the process to improving your ads relevancy and generating a desired action. As a metric, CTR indicates how relevant users are finding your ads. A high CTR might suggest that users are finding your ad to be highly relevant and it matches their search intention, whereas a low CTR may flag the opposite.

What is the difference between CTR and Conversion Rate?

It may be easy to think CTR and Conversion Rate tell you the same thing, however this is not the case. While click-through rate indicates how often users are clicking on an ad, it does not translate the number of clicks into monetary value. In other words, it is difficult to determine how specific marketing activities influence sales and revenue, through a good CTR alone. As a result, conversion rate – the percentage of click-throughs that leads to actual sales (or leads), may be more useful to determine whether or not your campaigns are generating sales or revenue via leads. However, both metrics should complement your efforts in optimising your ads for the best possible chance of success.

What is a good click through rate?

Much like many other important KPI’s in digital marketing, CTRs often differ by industry and advertising channel. Therefore, the best way to determine the success of your campaign is to compare your CTR result to average industry and channel benchmarks.

The average CTR varies by both industry and network – there is no one definitive ‘good CTR’. Analysing industries and network benchmarks will allow you to target a specific range in line with competitors. Below are the latest average bounce rate benchmarks by industry. You will notice that CTR for ads on search networks are higher than the average CTR for ads on display networks. This is because users on search networks are actively searching for content related to their keyword/topic, in comparison with users viewing ads on the display networks who are presented with Ads whilst they are browsing websites (so these users typically glance over ads with little/no intention to click). Knowing these averages can assist you in setting objectives for your CTR.

The channel used to display your links will also affect your click-through rates. This is generally due to variations in user intent/purpose within each channel, as well as variations in demographics and creative format. Based on the graph below, ads on Twitter have a significantly higher average CTR compared to direct marketing channels. Analyse the average click through rate per marketing channel below and determine where your good CTR metrics are positioned. This will give you an overall evaluation of where you might need to focus optimisation.

To drill down even further you can also analyse average CTR by creative format. For example, Facebook offers various creative types such as stories, videos, page ads and more. The CTR for these formats will also differ depending on which type you utilise. In summary, rather than looking at just the percentages, aim to incrementally improve your click through rate based on the averages relevant to your industry, the network and the channel.

Can a high click-through rate be bad?

In short, it is possible in some circumstances that a higher, or ‘good CTR’, could be harming your ads. For example:

  • if a keyword isn’t relevant to your business, however the Ad is still compelling. If your Ads says “looking for a cheap ladder” however your business only sells premium, high-priced ladders then you will probably get a high CTR however it is unlikely to lead to quality leads or sales

You don’t want to spend money for clicks without bringing in additional revenue. Therefore, it is important that you always check that your CTR is high for relevant and affordable keywords (and/or relevant and important target audiences).

Why are click through rates important?

There are many reasons why marketers should seek to optimise their CTR and why it is one of the most important metrics to monitor in regard to digital advertising.

CTR is a strong indicator of Ad campaign performance and effectiveness. Measuring these elements for success will always be important when determining where you need to improve or where your ads are performing well. You can use CTR to compare the different advertising channels and campaigns you are utilising and determine where to invest the bulk of your advertising based on performance.

CTR also directly impacts Quality Score in your Google Ads campaigns. A high CTR indicates to Google that your content is helpful and relevant to users searching for a specific keyword or phrase. As a result, Google Ads, as well as other search-based platforms, often offer pricing discounts for ads that generate high relevance and interest. Therefore, to incentivise advertisers optimising for relevancy, Google will offer higher quality scores to ads with high Google Ads’ click-through rates. So in other words, a higher click through rate leads to a lower cost per click and ultimately a lower cost per conversion. By achieving a higher CTR, you can drive a larger number of users to your product/service for the same advertising spend!

Lastly, CTR is important because it will help you understand your customers. It tells you what is and what is not resonating with your target audience. A low CTR could indicate to you that you’re targeting the wrong audience or that you’re not speaking the right language to entice users to click. Further, it may reveal some areas for optimisation such as your CTA message or headline. We will discuss how to optimise these areas next.

8 Tips for Improving Click-Through Rates

1. Write Compelling Titles and Copy

A title is typically your first chance to entice users to click, therefore playing a vital role in achieving the results you desire. It is for this reason that you must ensure that your title resonates with your target audience. A title that stands out from competitors and highlights unique selling points, is likely to encourage a higher click through rate. Additionally, you should ensure that your copy is engaging, enticing, relevant and persuasive. Try to demonstrate that you have the solution or need users are seeking.

2. Optimise your Meta Description (ORGANIC)

Meta descriptions are the snippets of text that appear below your title tag in the Organic Search results. Crafting an effective and compelling meta description is a strategic way to inform users about the contents of your page and encourage users to click through. You should use this opportunity to pitch to users and convince them that you have the content or solution that they are looking for. This can be done by using powerful and persuasive language and by making your Meta descriptions specific and as relevant as possible.

What is an organic click through rate?

CTR is also used in organic traffic where it is measured as a percentage of people that click on your Organic snippet when your website appears in the search results. In online advertising CTR tells you how well your Ad is resonating with your audience or for Organic traffic how well your organic snippet (Meta Description) is resonating.

3. Take Advantage of Ad Extensions

Ad extensions allow you to showcase additional information, features, services, contact details or specific links to your website. They are free to add and allow you to make full use of the ad real estate on Google. Ad extensions increase the size of your ads allowing them to appear bigger and stand out to users, naturally optimising for more clicks. Ultimately, the more information that you can share, the better chance there is of the users clicking through as they can clearly identify whether or not the content is relevant (plus your Ad stands out more!). There are various ad extensions available to make your Ad standout such as, sitelink ad extensions, structured snippet extensions, callout extensions, phone number extensions, location extensions etc..

4. Stick to one effective CTA

If you have explored our previous articles, you will notice that crafting a compelling CTA is important across all points of the marketing funnel. An effective CTA is critical in achieving high click through rates. By including one clear, compelling CTA, you can instruct users to take a specific action and/or guide them towards a destination. Not only does this improve your click through rates, but you naturally bring your business closer to achieving one more lead or conversion. Focus on providing users

5. Include effective visuals

If you feature compelling and relevant images in your ads (where possible) it’s an excellent place to boost engagement, visibility and an increased CTR. The use of effective visuals will help your Ad stand out immediately and strengthen communication and awareness with your target audience.

6. Use long-tail keywords

Long tail keywords are highly descriptive and relevant to what a user is typically searching. When users see a descriptive long-tail keyword that matches their search intention, they are more motivated to click through, as they are confident that they will receive the information they are seeking – due to the high level of relevance. You can use keyword research tools like Google Ads Keyword Planner and SEMrush, to find descriptive keywords that will resonate with your audience.

7. Optimise Site Speed

Site speed optimisation has never been more vital to Google’s ranking algorithm. Google prioritise pages based on user experience. A slow page load is likely to be recognised by Google as providing poor user experience. Additionally, users are more likely to bounce off your website if takes more than 3 seconds for your page to load. User experience should be prioritised right from the beginning and this landing page load time.

8. Utilise Smart bidding Strategies

Google’s definition of smart bidding is a subset of automated bid strategies that use machine learning to optimise for conversions or conversion value in each and every auction. What does this mean? Google will automate when your ads appear, with a goal to only enter your ad in auctions where you are more likely to get a click. Therefore, by entering more precise, more targeted auctions, you increase the likelihood of a higher CTR and a lower cost per conversion.

Measuring CTR should always be considered when strategising for future campaigns as it is a powerful measure of engagement with your audience. Whilst marketers might question whether to track CTR, measuring engagement ultimately helps to quantify the effectiveness and relevance of an advertising campaign. Importantly, although we have shown the significance of this metric on your marketing efforts, CTR should not be assessed in isolation. Optimising your campaigns to improve CTRs will naturally boost other KPIs, thus leading to better conversion rates and ultimately a lower cost per lead and/or a lower cost per sale.

 

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