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Clicks and Click-Through Rates (CTR)

This article explores the concept of clicks as interactions with banner advertisements, leading users to redirect to landing pages. It defines Click-Through Rate (CTR) as the percentage of clicks to total impressions, illustrated with examples. The text discusses typical CTR ranges, post-click user actions, and the importance of tracking conversions. It explains conversion rates, offering equations and examples to measure a website's success. Finally, it emphasizes understanding CTR in the context of media spending and conversion rates for effective advertising strategy.

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Clicks and Click-Through Rates (CTR)

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Presentation Transcript

  1. Clicks and Click-Through Rates (CTR)

  2. What is a Click? • A form of interaction with an ad that causes a redirect to another web page If you click this banner ad… You are redirected to this webpage

  3. What is a Click-Through Rate (CTR)? • A CTR is the percentage of impressions that clicked the banner ad • Equation: • CTR = # of clicks/# of total impressions served x 100 • Example: 200 clicks/200,000 impressions x 100 = 0.1% CTR • Industry average CTRs typically range between 0.1% and 0.25%

  4. Typical Click-Through Rates by Banner Size

  5. Typical Click-Through Rates by Industry

  6. What Happens After the Click… • After clicking a banner ad, users can do a variety of things related to that advertiser, including – • Complete the desired action on the landing page • Click through to the main site to look for other products/services • Search for the advertiser’s main website the next time they want to locate info on that product/service • Redeem coupons • Visit store locations • Call the customer service line • Therefore, online advertising leads to increased search activity, brand awareness, and website usage

  7. Post-Click Conversions • Many advertisers want to track not only how many people clicked their banner ad, but also how many people completed their desired action – whether that be ordering a product, signing up for an account, downloading a document, etc. – which is considered a conversion • A conversion rate is the percentage of people who clicked the banner and completed the desired action defined by the advertiser • Equation for Conversion Rate: • # of conversions/# of clicks x 100 = Conversion Rate • Example: • 200 orders/2,000 clicks x 100 = 10% Conversion Rate

  8. What is a Successful CTR? • When analyzing CTRs, the advertiser needs to take into account not only the amount of clicks, but also the following to truly measure a website’s effectiveness in generating business for their company – • Media spend • CPM of the buy • # of conversions • Cost-per-order (CPO) • A website that produced a low CTR could actually have generated more conversions and a lower CPO than a website that produced a higher CTR (so, spend and conversions matter)

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