What is CTR in Marketing and why is it important? + Formula

It’s probably not the first time you’ve heard that everything can be measured in digital marketing. The CTR is one of the most important metrics in the digital world. But, do you know exactly what CTR is? How is it calculated? What is its formula? or why is it so important? I’ll tell you below.

What is CTR?

In digital marketing the CTR (Click Through Rate) or percentage of clicks is the number of clicks obtained on a link or an advertisement with respect to the number of impressions.

The CTR is a KPI that is used to measure the effectiveness of a digital ad or campaign and is always expressed as a percentage.

How is the CTR calculated?

To calculate it we have to use its formula, as I have commented previously we have to divide the number of clicks by the number of impressions (times it has been shown) and multiply it by 100. Below you can see the formula to calculate it: (clicks / impressions) x100

CTR formula:

Let’s imagine we launched a campaign on Google ADS and the ad has been shown 1000 times of which the link has been clicked 40 times. If we apply the formula, the CTR of this announcement would be: (40/1000) x 100 = 4%. In the same way we can calculate it in SEO, in Display or Banners campaigns, in Social Paid Media campaigns (Facebook ADS, Instagram ADS, Linkedin ADS or Twitter ADS), etc.

When is a CTR considered optimal?

It is a difficult answer to answer in a general way, since it depends on the medium where we carry out the campaign. The same CTRs are not obtained in Google ADS search campaigns with sponsored text links, as in Instagram campaigns with visual creatives. For example, 0.6% in a Display banner campaign may be normal, while 1.2% in a Google ADS text link campaign may be poor. Therefore it is always recommended to compare it within the same context.

According to WordStream : the average CTR for text ads from the Google ADS search network is 2%, while in banner ads on the Google Display network it is around 0.35%, and in the Ads on Facebook is 0.90%.

Why is it important to measure it?

Now that we know what CTR is, how to calculate it using its formula, below you can see the main points of why it is important to measure and work on it.

-It helps us to get more traffic. Without a doubt, it is the main benefit. Both in SEO and in paid campaigns the higher this KPI the greater number of visits we will obtain and this becomes more possibilities to achieve our objectives.

– It helps us see the effectiveness of our campaigns. As a good indicator, it allows us to see if our ads are being effective or not. As we mentioned before, this digital KPI is the result between the times an ad is displayed and the times they have clicked on it, therefore it is an indication to detect those that are not working or, on the contrary, those that work better. The higher this KPI, the more effective the ad is, and conversely, when it is low, it means that the ad is not being effective. When we are faced with a low click-through rate we will have to review the design of the ad, the copy or its correct display on all devices.

– It helps us make our campaigns more profitable. If you have an ad with a good CTR in a paid campaign, the algorithms of the different platforms (Google, Facebook, Instagram …) reward you with greater visibility and cheaper clicks because they consider that your ads are of interest to their users. It is logical if we think that they also think about the user experience. So having this Kpi well optimized allows you to monetize your marketing budget.

At Espinosa we have carried out a multitude of actions to optimize digital marketing campaigns and their click-through rate, for clients of all sizes, both multinationals and SMEs. We know that it is a vital aspect and that it makes a difference in any campaign.

Now that you know what CTR is and why it is important in marketing, what are you waiting for to analyze it and improve it in your campaigns?

 

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