In the digital marketing world, the term click-through rate is gold. Click-through rate is a primary indicator on the performance of your digital advertising campaign as well as your strategy. Many factors affect the click-through rate (CTR), including imagery, keywords, call-to-action, copy, targeting, ad placement, and so much more. A high click-through rate can identify if your digital advertising campaigns are performing well. The content and strategy of your digital advertising campaign are resonating with your target audience, and your high CTR is giving you the green light to keep going. A low click-through rate tells you that you need to change up your digital advertising strategy.
But in order to change up your digital advertising strategy, you need to better understand what factors go into the evaluation of click-through rate.
What is click-through rate?
More commonly it is referred to as CTR, which stands for click-through rate. CTR refers to the percentage of people visiting a web page who access a hypertext link to a particular advertisement. Click through rate is an advertising metric that is used to measure how many users clicked an advertisement, link, or call to action and later went on to the landing page or website.
A click-through rate measures the people who saw your ad and clicked on it. It does not measure the people who saw the ad and did not click but maybe landed on your site later as a result of seeing your ad.
How is click-through rate calculated?
Click-through rate helps to measure the success of your advertising campaigns. By determining how many people click on your ads, CTR supports ad optimization. The rule of thumb is that improving click-through rate is one of the best ways to generate more sales.
To measure the click-through rate in a campaign, you’ll need to divide your total number of impressions by the total number of clicks. For instance, if a display ad generated 8000 impressions and 100 clicks, your CTR would be 0.8%.
Why do click-through rates matter in digital advertising?
The optimization of click-through rates is critical for marketers to get the most out of their ad campaigns. Marketers increase CTR by improving the performance of elements that drive clicks, such as copy, titles, subject lines, imagery, keywords, and descriptions. A few methods available or CTR optimization include:
- Improving ad copy: The words you use will either engage customers or drive them away. Make sure you’re speaking the language that appeals most to your target audience.
- Adjusting the call-to-action: Stay away from generic and demanding CTAs like “click here.” Focus on highlighting the benefits a customer will get by clicking on your link, such as: “Get your free download.”
- Changing keywords: A low CTR may be a sign that you’re targeting the wrong audience. Adjust your keywords or re-think the targeting elements in your ads.
- Know your audience: Make sure you understand the audience you’re appealing to. When are they most active on the marketing channel you’re using? Which words and phrases do they like?
- Updating design: If your ads include visual elements, try altering everything from the colors, to the images you use.
What is a reasonable click-through rate in digital advertising?
There are a handful of benchmark studies on average CTR to help marketers determine what is a reasonable click through rate. However, if you ask what a successful CTR is, you probably won’t get a clear, concrete answer. Why? There are too many variables that come into play.
It’s hard to compare CTRs across campaigns, accounts, strategies, or companies because it all depends. But let’s look at some data-backed industry averages that can help you benchmark your current CTR against those of your competitors.
Average CTR for Search, Display, Rich Media and Facebook
According to Wordstream, the average click-through rate on the AdWords search network is 1.91% on the search and 0.35% on display. Hanapin Marketing’s Matt Umbro came to a similar conclusion on PPC Hero, stating that 2% is a good CTR in search campaigns on AdWords or Bing, but reminds marketers that just because they’ve achieved good doesn’t mean they shouldn’t aim for better.
Doubleclick (the display advertising part of Google) further breaks down reasonable click-through rates according to different types of ads. For example, overall display ad CTR is 0.05%, rich media ad CTR is 0.1%, and Facebook Ad CTR ranges from 0.5% to 1.6%.
All of this data comes with a caveat. CTR across all industries isn’t specific enough to help you understand how your campaigns are measuring up against your competition, because the average CTR for different industries varies so widely.