What is Click Through Rate ?
Click Through Rate (or sometimes referred to as CTR ) is a performance metric that shows how many times users clicked on an ad or a link. Marketers and advertising professionals typically use it to measure the success of search, display, and email marketing campaigns.
Click Through Rate measures the ratio of clicks to impressions of an ad or a campaign. Since most campaigns today are interactive and made to encourage meaningful engagement (signing up for a course, reading content, buying a book, etc.), Click Through Rate is good indicators of success with that goal.
Click through rate is used in many advertising strategies. It is also helpful in CPG marketing. However, many advertisers and marketers lack important information about advertising. Some professionals have a vague understanding of CPG. To properly understand advertising and marketing terms, the Gourmet Ads team has written a brief article about what is CPG?
Click Through Rate is a good way to measure the quality of the ad for the audience segment, and can as such be used to measure the effectiveness of headlines, ad copy, meta descriptions, and other advertisement segments. If the ad creative resonated with the target audience, it is presumed (as is the truth in most cases) that the Click Through Rate will be higher.
Click Through Rate can also be compared to the conversion rate for further optimization of the sales funnel. If the Click Through Rate is high, but the number of conversions isn’t proportionate, marketers can presume that their product offer should be improved. Vice versa, if the number of conversions is extremely high as compared with the Click Through Rate, the ad copy would have to be optimized.
The formula for calculating Click Through Rate is;
Click Through Rate = (Number of click-throughs/Number of impressions) X 100.