One of the essential measurements in advertising is the click-through rate or CTR.
But what is the click-through rate and what exactly does it measure?
Put simply; the CTR is the rate at which someone clicks on something like a digital ad, banner or link. Take the number of clicks and divide that by the number of views and… voila! You have your click-through rate. For example, if your ad was shown 100 times, and received 10 clicks, your CTR is 10% (which is pretty good).
Digging deeper we then ask: What does this measurement tell us about our ads? When it comes to Google Ads our goal is to show the most relevant ad to the user based on their search query. In this instance, the click-through rate (CTR) serves as an indicator of your ads ability to fulfill the users’ intent.
If Google shows your ad for the search query “buy green hats” and your ad title reads “blue hat store” your click-through rate is probably going to be poor. If your ad instead reads “green hat store” your ad is most likely better at matching the users’ intent.
Another example would be a search for just “fishing”. That term alone is very broad, and it’s hard to determine the users’ true intent. If your website is about “fishing” in general, that keyword might make sense but if you sell something more specific like “charter fishing trips” that keyword will be too broad and your click-through rate won’t be as high as it would be targeting a more relevant keyword.
Click through rate can also measure the quality of your ad. You might match the user intent 100%, but if your ad collateral isn’t high quality your CTR might suffer.
Beyond Google Ads the lessons of CTR can be applied to almost any digital advertising models. Use CTR to dictate when, where and how much you spend to acquire new business.
