What is click-through rate (CTR)? A definition

Here’s a simple click-through rate formula:

CTR = (click-throughs / impressions) x 100

For example, if 100 people see an online ad and 5 people click to learn more about the product, that ad has a CTR of 5%.

CTR can be used to measure the success of pay-per-click (PPC) search results (for example with Google AdWords or other search engines), CTAs on a landing page, or hyperlinks in blog posts and email campaigns.  

Why CTR is important

CTR is an important metric because it helps you understand your customers—it tells you what works (and what doesn’t work) when trying to reach your target audience. A low CTR could indicate that you’re targeting the wrong audience or that you’re not speaking their language persuasively enough to convince them to click.

Let's take the example of a paid search ad campaign that directs people to your website, e-commerce store, or landing page. An online advertisement’s CTR lets you know how effective the ad is at drawing in potential customers; you can then compare ad copy, ad position, and CTAs to see which has the highest CTR.

What is a good CTR?

CTR varies between industries. To determine what a good click-through rate would look like for your business, you could start by researching your industry’s average click-through rates. Once you have an understanding of existing benchmarks and industry averages, you can begin taking steps to get a higher CTR and reach your business’s goals.

4 tips to improve CTR

There are different factors to consider when you’re trying to increase CTR across different digital marketing channels. How you increase CTR depends on where you want to increase CTR.

For example, if you have a low CTR on a social media channel like Facebook or Twitter, consider which hashtags might help expand your reach to your target audience; and when you’re trying to increase CTR on a PPC ad, you need to pay super close attention to your headline and copy.

Here are four tips to consider when you’re trying to improve CTR:

1) Optimize your headline and copy:

Use one or two focus keyword(s) in your headline and copy. Appeal to your audience’s emotions and needs: solve a problem for them.

2) Include CTAs:

Write a direct and compelling call to action. Your CTA should be inviting and prompt your audience to click.

3) Use images:

Using visuals is a great way to increase CTR. Depending on the marketing channel, different types of images may perform better than others. Run A/B tests with different types of images to find out what works best for your company.

4) Try using hashtags:

Hashtags work across multiple platforms, like Facebook, Twitter, and LinkedIn. Do some research on trending or popular hashtags in your industry, and use hashtags that relate to the rest of your copy to increase the chances of being seen by your target audience.

Market to your ideal customers for better conversions (not just a high CTR)

Click-throughs and conversions are not the same thing: CTR tells you the percentage of people who click, but not the total number of people who convert (e.g., made a purchase or signed up for your newsletter). In other words, an online ad can have a high click-through rate with a very low conversion rate, leaving you with a high cost per conversion (CPC).

So how can you make sure that the people who click on your ads will continue on their customer journey to the point of conversion? You focus on your ideal customers.

Ideal customers are those who would get the most value out of what your business has to offer. They are likely to return again and again if you treat them well, forming the backbone of your customer base—so of course you want to target them with your advertising.

The way you figure out who those people are and what they want from a company like yours is by running some research and building user personas.

Build data-driven user personas

A user persona is a semi-fictional character based on demographic and psychographic data of the people who buy your products.

A simple user persona answers the following questions:

1. Who are your customers?

2. What is their main goal?

3. What is preventing them from getting what they want?

The following tools can help you answer these questions so you can tailor your messaging to their needs, helping to overcome their objections and drive actual conversions.

• On-page surveyspolling customers once they’ve converted

• Customer interviews

Once you’ve got a clear understanding of who your customers are, what they want, and what’s keeping them from getting it, you can create ads that draw in your ideal customers and convince them to convert.