What is CTR and what CTR is considered to be good
Table of contents
- What is the click-through rate (CTR)?
- What CTR level is considered to be good
- Why high CTR isn't always good for business
- How to set up automatic CTR calculation
What is the click-through rate (CTR)?
This parameter shows the percentage of users who saw a banner (button or link) and clicked on it. CTR calculation formula is:
CTR = Number of clicks/Number of impressions × 100%
By calculating the parameter, you can honestly evaluate which advertising motivates the user better to click.
What CTR level is considered to be good
Your CTR can say a lot about your PPC campaigns. For example, a high score means your ads and/or images are great at motivating customers to click on them.
Also, a high CTR means the correct design of the ad — an excellent call to action placing and on the whole understandable message.
Conversely, a low score often means your ads aren’t clear and suitable for your target audience. So if you’re testing a new ad and the CTR is really low, you need to change something in your ad to find out what’s going wrong.
Pay-per-click platforms like Google Ads and Facebook Ads use CTR to determine the quality of your ads because it’s a good indicator of how relevant your ads are to your target audience.
Google and Facebook want the ads they display to be relevant to their users. Therefore, these services use bidding systems that count the quality indicator: the higher the quality of your advertising, the higher your rate becomes.
Why high CTR isn't always good for business
Let’s say 1,000 users clicked on your banner. You have spent money on paid traffic, but at the next funnel stage 950 users bounced. CTR is considerably high, but there are practically no sales. What happened? You optimized your ads in pursuit of clicks without considering further conversion goals. And at the same time, you also paid for those 1000 clicks and lost money, even with a high level of CTR. You should always think ahead of the funnel steps to avoid such a situation.
How to set up automatic CTR calculation
In advertising services, you can find the following ad performance parameters:
- Coverage, involvement
- Clicks, CTR, Cost per Action (CPA), Cost per Mille (CPM)
- Distribution of impressions
- Advertising costs
CTR is one of the many important ad performance parameters. You need to track all of them to get the full picture. And don’t forget to measure return on ad spend (ROAS).
Here’s an example of the Google Analytics report with all data on sessions, costs, and income collected from different advertising services. Essential metrics, such as ROAS and revenue per click (RPC) are calculated automatically based on a comparison of each campaign’s cost with the corresponding revenue.
You can find this report on your Google Analytics account on the Acquisition tab. Then, select Campaigns and click Cost Analysis.
Initially, only Google Ads data is available in Google Analytics. To add data from other advertising sources, you need to set up an automatic data import using OWOX BI. Thus, the service automatically transfers clicks, costs, impressions for all campaigns to GA, checks the data for errors, and converts it into the single currency of your choice. With our step-by-step instructions, the setup takes no more than 10-15 minutes.
Now your Google Analytics has data on advertising campaigns, and you can monitor valuable metrics for evaluating the effectiveness of advertising campaigns.
If you still have questions, ask in the comments below:)
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