What is a good click through rate (CTR)?

When measuring the effectiveness of a paid campaign, one of the first questions the bean-counters will ask is, ‘What was the CTR?’ Without doubt CTR is invaluable in measuring the effectiveness of an online advertising campaign.  It can be defined as the number of clicks received divided by the number of impressions generated. For example, an ad that is displayed 1,000 times and receives 10 clicks has a click-through rate of 1 percent. Seems fairly straightforward. But not so. The ad channel has a significant impact on defining whether the CTR percentage is deemed as adequate.Search and display channel results are very different. We tend to see higher CTRs in search because the consumer is looking for specific information, and is therefore more likely to click when they find it. With display ads, the viewer is passive – doing something else when the ad is served to them.

The reason that so much importance is place on CTR when evaluating campaign is that the CTR can be an indicator of how relevant an ad is to the searcher or to the audience targeted. It can demonstrate interest in a product message or show what “resonates” with consumers..

According to Lisa Raehsler, Principal Strategist, Big Click Co. several factors can impact CTR of an ad, which is why there is no definitive answer to the question. A few of the factors to consider include:

  • Audiences and targeting
  • B2B or B2C
  • Brand or non-branded
  • A keyword’s place in the search funnel
  • Ad copy’s creative messaging – CTA
  • Type of offer
  • Display URL
  • Images/design
  • Industry competitiveness

Another channel factor to consider is what Andrew Chen describes as The Law of Shitty Clickthroughs. The basic premise being that the CTR of banner ads, email invites and other marketing channels on the web gave decayed every year since they were invented. He argues that what is saving online campaign is that new channels are constantly being unveiled. He also lists the factors that are influencing this decline, which we won’t go into here bar for one (for no other reason than I like the image below) which is ‘novelty’. For advertisers this means that users become bored with the same ad formats and creatives and for publishers it means that users become familiar with ad layouts on their site and begin ignoring them – banner blindness.. Which brings us to the aforementioned image which is from an eye tracking study by Jacob Nielsen.

Banner Blindness

Example of Banner Blindness

We can clearly see how users are choosing to almost completely ignore banner advertising.

So, as we have demonstrated, deciding whether your CTR of 0.2% is an adequate results for your marketing efforts can be quite difficult. In the end I think you need to look at the bigger picture.If your campaign is achieving its goals in terms of traffic, sales, awareness etc. that it must be deemed a success. Click through rates are not the be all and end all.

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