The click-through rate (CTR) is the percentage of people who click on your ad. Digital Marketers use this metric to determine their PPC success or how well their keywords and ads are doing because it affects how much you will pay for your ad and your quality score.
Calculate your CTR by dividing the number of people who clicked on your ad or link by the number of impressions (the people who saw the ad). To get the percentage multiply your result by 100.
Why is click-through rate significant in digital marketing
A click-through rate can help determine which ads, keywords and listings in your marketing campaigns are successful and which needs improvement. A high CTR indicates that your audience finds your ads and listings relevant and helpful.
If you use keywords that align with your business, more users will click on your ads or listing when they search for those keywords and your CTR will contribute significantly to your Ad rank over time.
The click-through rate can also drive cost efficiency. If you pay for ads on a cost-per-click basis, a high CTR means you are getting more value. However, it is relative to what you are advertising and on which mediums.
What is a Good Click-through Rate?
A good CTR can vary depending on the industry, the type of ad (video, display, etc.), and the platform (Facebook, Google, etc.). For example, a good CTR for advertisements in the Arts and entertainment industry should be between 10% and 12%, but a good CTR for the finance and insurance industry should be between 6% and 7%.
However, on average, all industries should have a good CTR from 5% to 12%. Also, a high CTR doesn’t always indicate a successful ad. It could be a good sign for your marketing efforts, but if it doesn’t match your conversions, then you are losing money; it means people are clicking your links without converting to customers. Theerefore, the click-through rate shouldn’t be the only metric for measuring your marketing campaign access.