One of the best ways to understand your audience is to look at the numbers. How many people are visiting your website? How many people are opening your emails? This information gives you valuable data that you can use to make informed decisions that will bring value to your business. But how are these numbers determined? And what makes one number better than the other?
Understanding Click-Through Rates
First and foremost, we need to understand what this metric is and why it’s important. CTR stands for click-through rate. It’s a measurement that shows the number of clicks an advertiser receives to their ad per number of impressions.
For pay-per-click (PPC) ads, you always want your click-through rates to be high, and it’s important for overall campaign health to do so. The CTR directly affects Quality Scores, which the Google Ads algorithm uses to determine how much you, the advertiser, will pay for each click.
The CTR Equation
So, what is a CTR, really? It’s the rate at which your PPC ads are clicked. Basically, it’s the percentage of people who click your ad (clicks) divided by the ones who view your ad (impressions).
(Total Clicks on Ad) / (Total Impressions) = Click-Through Rate
Regarding a good click-through rate, the average is around 1.91% for search and 0.35% for display. Of course, these are just averages. The true percentage you should be reaching is completely based on your target industry. As with estimated bid prices, these metrics can be completely different. This chart from WordStream gives you a better idea of the numbers for your industry.
Why is CTR important?
The importance of your CTR is directly correlated to your Quality Score. Here at Allegrow, our goal is to create the highest ROI possible. When it comes to PPC campaigns, CTR is one of the essential factors we look to work on improving. Getting the ads in front of qualified customers at a cheaper rate means more leads and higher profit margins.
While CTRs are important, they’re not the only metric we look at. In terms of Google Ads, you’ll have to account for qualified keyword targeting that leads to the campaign CTRs. If the targeted keywords aren’t producing qualified leads, it won’t matter if you have a 10% CTR or a .01% CTR. That’s why we account for a large list of metrics and data analysis to create the best campaigns possible.