Online Advertising

Click-Through Rate

Introduction

Optimizing click-through rate (CTR) is one of the best ways to measure the effectiveness of your advertising campaigns. By definition, CTR is the number of users who click on a specific link compared to the number of total users who view a page, email, or advertisement (thanks, Wikipedia!). While the metric seems simple on the surface, it gives valuable insights into areas of future growth and improvement. We'll take you through how to calculate this metric, how to understand it in the context of your industry, and how to apply it to the platforms you're using now.

How to Calculate CTR

You can calculate CTR by dividing the number of click-throughs by the number of impressions. CTR can be assessed for various time-periods (i.e. day, week, month, year) and, if your click-throughs are tied to certain products or campaigns, you can assign a specific CTR for each.

If you’re confused about how to define click-throughs and impressions, we’ve included some nifty definitions and examples below:

  • An impression is an advertisement, email, or page that is fetched. Whether or not it is clicked, it will be called an impression if it is fetched by the viewer.
  • Click-throughs are the fetched ads/emails/pages that were clicked by its viewers.

When choosing what to include in your calculations, remember: consistency is key! That means, if you decide to include XYZ in your CTR for the month, you should include it in the next month’s CTR as well. Having consistent metrics will allow you to better identify the causes of good or bad performance. For instance, if the number of impressions of your ad has increased but your click-through rate is still low, there is something that you have to improve or change in your advertisement.

Person Holding Apple Magic Mouse
Clicking is the most basic action that a user can do in his/her device, but is one of the hardest to earn for online businesses. (Image from https://www.pexels.com/photo/apple-business-computer-connection-392018/)

Connecting CTR to Your Business

Again, as you begin (consistently) monitoring CTR, you’ll be able to find insights specific to your strategy. Of course, it’s also important to understand your CTR in relation to your broader industry. To help you know what to expect, we’ve included a list of average CTR per industry:

  • Advocacy - 4.41%
  •  Auto - 4.00%  
  •  B2B - 2.41%
  •  Consumer Services - 2.41%  
  •  Dating & Personals - 6.05%
  •  E-Commerce -  2.69%
  •  Education -  3.78%
  •  Employment Services - 2.42%
  •  Finance & Insurance - 2.91%
  •  Health & Medical - 3.27%  
  •  Home Goods - 2.44%
  •  Industrial Services - 2.61%
  •  Legal - 2.93%
  •  Real Estate - 3.71%
  •  Technology - 2.09%
  •  Travel & Hospitality - 4.68%

Further, while you can find click-throughs and impressions from many channels, we’ve identified popular platforms that are particularly relevant to CTR. These may be good places to begin if you’re getting started with this metric:

  • Google Analytics: This is a web analytics service by Google that helps users find CTR for its websites and specific pages.
  • Facebook: If you're going to use Facebook Ads, it has an analytics feature that helps users to understand their ads more. One of their features offers easy-to-find summaries of campaign, ad set, and ad CTR.
  • Mailchimp: This is an email marketing automation platform that helps users improve their email marketing strategy with analytics and CTR data.
  • LinkedIn: As a part of its marketing solutions platform, LinkedIn provides a calculated CTR for email marketing and ad campaigns.
  • Google Ads allows you to access the Click-Through Rate on your main dashboard. Click here for more information.

Tracking CTR with Lido

While CTR is easy to calculate, it’s important to keep in mind that CTR is one of many valuable metrics to track your performance. If you don’t want to spend hours at the end of the month juggling numbers from your Google Analytics, Facebook, Mailchimp, and LinkedIn accounts, consider trying Lido. Lido can help you build a dashboard to monitor your data and give a look into how your key metrics (such as CTR) change over time. With that, we invite you to check out our integrations for the following platforms below:

Facebook Ads
Mailchimp
Google Analytics
Google Ads
LinkedIn Marketing

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