CTR: how to calculate it, how to improve it, and what is a good CTR

CTR (click-through rate) is a key metric used to measure the effectiveness of online advertising, such as banners or text ads. It is determined by comparing the number of clicks on an ad to the total number of times it was shown to the audience, and is expressed as a percentage. It plays an important role in determining the success of online advertising campaigns, as it reflects the extent to which an advertising message attracts the attention and interest of potential customers.

What is CTR in advertising?

CTR (Click Through Rate) is defined as the percentage of the number of clicks on an advertisement out of the total number of times it has been displayed on the internet, including banners and text ads. This ratio measures the response to an advertising message and is an important indicator of its effectiveness. A high CTR indicates that an ad is attracting the attention and interest of potential customers, which is important for the success of advertising campaigns. The effectiveness of CTR depends on many aspects, including the content of the ad text and the attractiveness of the offer to the target audience, as well as the type of contextual advertising - search or thematic, with thematic networks typically having lower CTRs.

Advertisers often strive to increase CTR as a key indicator of success, but sometimes focusing solely on this aspect can distract from the real goals of the business. It is important to remember that a high CTR does not always equate to a high conversion rate, especially in the context of image advertising where other metrics are used to measure effectiveness. Nevertheless, CTR does have an impact on the reputation of an advertising campaign and can affect the cost of clicks, with lower prices for high CTRs and higher prices for lower CTRs, which can lead to an increase in the cost of guaranteed impressions compared to the first position in the ad.

CTR calculation formula

CTR (Click Through Rate) is a key metric that measures the effectiveness of an online ad and is defined as the percentage of clicks on an ad out of the total number of impressions. The following formula is used to calculate CTR

CTR=(Total Ad Impressions/Number of Ad Clicks)×100%.

This formula allows you to accurately measure what proportion of all ad impressions are clicks, thus demonstrating the attractiveness and relevance of the ad to the target audience.

An example of how to calculate CTR in advertising:

For example, an ad has 1000 impressions and 100 clicks. Then the CTR formula is

CTR = 100 / 1000 * 100% = 10%

What does CTR mean?

Click-through rate (CTR) is a valuable tool for assessing the quality of your advertising. It plays a key role in a number of aspects of online marketing, allowing you to

1. Optimise advertising costs: a low CTR can lead to an increase in the cost per click, so monitoring this indicator allows you to make timely adjustments to your ads, increasing their effectiveness and reducing costs.
2. Creative testing: by changing ad elements such as text, headlines and visuals, you can analyse the impact of these changes on CTR. This allows you to identify the most effective marketing techniques, which is particularly important for targeted advertising.
3. Evaluate the effectiveness of a landing page: A landing page with graphics, text and call-to-action buttons can be considered a large advertisement. A high CTR of a landing page indicates its ability to effectively convert visitors into further action.
4. Develop a marketing strategy: Knowing the likes and dislikes of your target audience allows you to better plan new advertising campaigns and track their success. CTR provides the information needed to develop effective strategies and offers.

CTR not only indicates the attractiveness and relevance of an ad, but also serves as a tool for in-depth analysis and optimisation of marketing efforts.

What is a good CTR?

There is no universally accepted standard for CTR, as it varies greatly depending on the type of advertising channel and other factors.

For example, Google Ads on the search engine can have a CTR of 10% or more if the campaign is set up effectively with the right strategy and structure. The high CTR in this context is due to the fact that the ads appear in response to specific user requests.

For targeted and display advertising, the typical CTR is 1-3% or less because users are not actively searching for the product or service that the ad is targeting.

Before launching an advertising campaign, it is only possible to estimate the CTR based on the experience of previous campaigns. However, if after analysing the results it turns out that the CTR is lower than expected, you need to optimise the campaign and test various hypotheses to improve the indicator.

How to increase the CTR of your ad campaign

To increase the CTR of your ad campaign, follow these strategies

1. Create attractive headlines and ad descriptions that are short, informative and motivating. Your headline should capture the user's interest and encourage them to click on the ad.
2. In the context of search advertising, actively use additional elements and extensions that enrich your ad with information and visual content, including setting up the displayed URL.
3. Optimise your targeting by segmenting your audience and developing individualised creative with relevant USPs for each segment.
4. Include keywords in headlines and ad copy for search campaigns. This will ensure that they stand out when they match searches and attract more attention.
5. Systematically optimise your keywords for your campaign, adding negative keywords to avoid untargeted impressions.
6. Use A/B testing, experimenting with different variations of headlines, images and copy to determine the most effective in terms of CTR.
7. Proactively analyse results and optimise creative by regularly reviewing statistics to identify the most effective ads and improve those that are underperforming. Test new hypotheses to determine the best strategies to drive clicks.