Click through rate (CTR)

Definition

Click through rate (CTR) is a metric used in online advertising and digital marketing to measure the effectiveness of a particular advertising campaign or the success of an individual advertisement.

What is a click through rate?

CTR is a key performance indicator in digital advertising. It provides insights into how well an ad aligns with its target audience. A higher CTR generally indicates that the ad is engaging and compelling to users. 

Formula for click through rate (CTR):

CTR = (Number of clicks / Number of impressions) x 100

A low CTR may suggest that the ad is not relevant for the target audience. Advertisers may need to reassess the ad content, targeting parameters, or placement to improve performance. By analysing CTR data, advertisers can make informed decisions about refining ad creative, adjusting targeting criteria, or experimenting with different ad formats.

CTR benchmarks vary across different advertising platforms and industries. Understanding the typical CTR for a specific platform helps advertisers set realistic expectations and assess the competitiveness of their campaigns.

While a high CTR is generally positive, it’s important to consider the context. For example, a high CTR may not necessarily indicate success if the overall conversion rate is low.

Example of click through rate

Let’s consider an example of click through rate for an online advertising campaign:

• Number of clicks: 500
• Number of impressions: 10,000

CTR = (500 / 10,000) x 100 = 5%

This means that, out of the total 10,000 impressions, 5% of users clicked on the ad. A higher CTR generally indicates a more successful and engaging ad.