What is CTR and How to Improve Your Keyword’s Click-Through Rate

If you’re planning your digital media expenses, you need to know the ROI of the most important metrics and their benchmarks. Today let’s talk about one of them – click-through rate (CTR). “What you can’t estimate, you can’t improve”, is a rule for digital marketing. It is clear that if you don’t measure your activities, you won’t know if they work or not. In this post, you’ll learn what CTR means in content marketing, what it’s one of the most important metrics, and how to find the benchmark for your business.

What is CTR?

The click-through rate, well-known as CTR, shows the ratio of clicks to views and (more specifically) the ratio between the number of page views and the number of clicks on a specific link. 

This metric shows the percentage of users who view your ad (impressions) who then actually go on to click the ad (clicks). The formula for CTR looks like this:

Click-Through Rate = Total Clicks on Ad / Total Impressions

The click-through rate is considered a key performance indicator (KPI) in digital marketing, especially for banner advertising, content marketing, and other types of advertising paid for on a per-click basis.

Why do click-through rates matter?

Understanding CTR is important because a high CTR usually points out that your ads effectively attract attention and catch the interests of your target audience. 

CTR is an important metric because it also helps you understand your customers—it tells you what works (and what doesn’t work) when trying to reach your target audience. A low CTR could demonstrate that you’re targeting the wrong audience or that you’re sending the wrong message to convince them to click or show your value.

A high CTR is also important for:

Driving cost efficiency

If you’re paying for ads on a cost-per-click (CPC) basis, a higher CTR means you’re getting more value for your advertising costs.

Evaluating your campaigns

CTR can be used to measure the effectiveness of specific ads, keywords, or campaigns. So you can understand what works, and what doesn’t, and calculate the budget for future campaigns.

Improving your Ad Rank

Your actual CTR can influence your Google-predicted Expected CTR over time to affect your Ad Rank (a value that determines where your ad appears relative to other ads). The higher your Ad Rank, the better position your ad can get.

What is the average click-through rate?

As with most digital marketing measures, there is no general click-through rate that can be universally applied to various industries. However, most of the time, the CTR is calculated in the per-thousand range. It means there will be only a bunch of clicks for every 1,000 views. 

Older practice showed the average click-through rate at about 0.1 percent, and given the ever-increasing prevalence of ad blockers and rising user awareness, this percentage could decline. However, along with improvements in paid advertising where you may target different audience categories, you could get click-through rates of between 1 and 3 percent. 

Banner advertisements, which have been popular for several years, and popped up across the whole screen “blocking” reading the article of the blog also get a healthy CTR – on average 10 percent or more. However, user “misbehavior” must also be considered because this type of advertising may generate false clicks because visitors often try to close the banner on the website using such aggressive ads and unintentionally end up on the linked page. For this reason, the effectiveness of banner advertising is a controversial issue in digital marketing.

Higher click rates of between 3 and 15 percent are quite common in email marketing. But please remember that simply opening an email increases the number of views. A lot of promotional emails end up unopened in the recycle bin or spam folder, so the click-through rate is slightly misrepresented.

The situation is different when it comes to banners and other forms of advertising on social media sites like Instagram, Linkedin, etc. Users become particularly “click-friendly” because the click-through rate is about 11 percent, which is considerably higher than the click-through rate of a normal blog or e-commerce website.

A “good” or “bad” CTR can differ a lot depending on the niche, the platform (Google, Twitter, etc.), and the type of ad (search, display, video, etc.).

But there is a service – WordStream. Its ad benchmark report provides numbers that outline average CTRs for search advertising across many industries:

Remember: The CTR benchmarks are primarily based on Google Ads (80%) but also account for Microsoft Ads (20%).

Most industries in WordStream’s data have CTRs in the 6%-7% range.

Have you seen the industries with the highest CTRs? These are Arts & Entertainment at 11.78%, Sports & Recreation at 10.53%, and Travel at 10.03%.

However, a high CTR doesn’t always indicate a successful ad. 

Let’s explore why.

When higher click-through rates are bad for business

If a keyword isn’t relevant to your business or isn’t going to generate sales, leads, branding downloads, etc. then a high click-through rate for that keyword actually has a negative effect on business. And the reasons for this are rather obvious:

You’re wasting money for every click.

A lot of clicks generate a lot of ad expenses. Sometimes you’re generating clicks on keywords that are priced too high, and won’t turn a profit even if they convert.

Irrelevant terms and clicks are just wasting money without achieving the business result.

So you don’t always need higher click-through rates: what you need are high CTRs on keywords that are:

• Relevant – It has to fit your ad text, your landing page, and your offering.
• Affordable – Keywords that aren’t going to be profit-excessive.

So, to sum up, a good CTR means first targeting the right words, and then getting as many people as you can to click on those ads.

How to achieve strong click-through rates for your ads

But if you’ve chosen the right keywords and objectives for your campaign, follow these tips to achieve strong click-through rates. The result depends on:

• Targeted keywords to bid on.
• Cost-efficient clicks.
• Services and knowledge for closely incorporating keywords with ad content and landing pages.
• The ability to quickly and effectively split keyword groups to generate tight-knit targeting.

Remember, the higher your click-through rate, the better your Quality Scores will likely be, and high-quality Scores are one of the single best predictors of success in paid advertising.

Steps to better results:

1) Optimize your headline and copy:

Use one or two main keyword(s) in your headline and copy. Appeal to your audience’s emotions and needs: solve a problem for them, and be valuable.

2) Include CTAs:

Write a direct and compelling call to action. Your CTA should be engaging and prompt your audience to click.

3) Use visuals:

Using visuals in the ads is a great way to improve CTR. Depending on the marketing channel, different formats of visuals (images, videos, etc) may perform better than others. Apply A/B tests with different types of images to find out what works best for your business.

4) Try using hashtags:

Hashtags work across multiple social media platforms, like Facebook, Twitter, and LinkedIn. Do some research on trending or popular hashtags in your niche, and use hashtags that relate to the rest of your copy to increase the chances of being seen by your target audience.

To sum up

The click-through rate is an easy-to-find and useful metric for evaluating the reaction and behavior of visitors on a website. Click-through rates are of great importance in digital marketing as they can, among other things, compare the effectiveness of different advertising activities.

However, the click-through rate alone is a very limited metric of the success of a campaign because conversion rates should also be calculated. Once these have been done, you may see a fairly clear picture of how much attention your advertising attracts, what effect it has on your target audience, and whether your site content delivers value to them.