CTR: Difference between revisions
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Revision as of 22:49, 8 February 2011
CTR (Click-Through-Rate) represents the ratio of the number of clicks that a particular advertisement(impressions) receives relative to the total number of viewers. The Click-through-rate is an efficient way to measure and determine the success of an online advertising campaign.
Short overview
The CTR is an important indicator for the advertisements' effectiveness. Over time, the click-through rates of advertisements have decreased on a continuous basis. At first, a five percent CTR was something common, while today a two percent CTR level is considered highly successful. Having this in mind, the average CTR level is somewhere around 0.2 and 0.3 percent. However, depending on the situation, topic and moment in time - the CTR can have different values, but it is definitely used as basis for future decisions. [1]
How does it work
Once the advertisement published on the website has achieved a significant number of impressions (clicks), the keywords of CTR are a strong indicator of the users' relevance and the keyword's success. Having this in mind, if we would consider a well-targeted keyword for a well-targeted advertisement it is more likely to reach a higher CTR as compared to a general keyword without a specific advertisement. The conclusion is the following: The stronger the relevance between the keywords and the advertisements as well as the business itself, the higher is the probability that a user will click the advertisement after searching based on the specific keywords.
CTR significance
The CTR is an important indicator which reveals important information regarding the advertisements' performance and regarding the overall performance of the business. The results of CTR can also be used as a basis for further decisions and actions to improve the business performance. Depending on each advertiser, the value of the CTR can vary, but in the case of new advertisers a good CTR would be somewhere around three percent. A low CTR level may reveal poor keyword performance and the need for keyword optimization by means of SEO methods and techniques. In this way, the CTR can be also used to improve the low-performing keywords and improve the keyword optimization. Another use of CTR is to determine the keyword's Quality Score: a higher CTR level correlated with a high Quality Score can lower the costs and strengthen the advertisement position. On the opposite end, a high CTR level expresses the attractiveness of the advertisement and often click are being received. [2]
Monitoring CTR
In order to maximize the results regular checking actions of the CTR level is recommended as well as implementing the necessary changes to improve the CTR. An advertisement with a low CTR level should be improved by means of various modifications and removed only if there are no other solutions for improvement. The CTR evaluation should be performed when an advertisement received at least 1,000 clicks (impressions). Once this threshold is achieved and the CTR evaluation process reveals a low CTR level (less than 0.1%), then it is recommended the analysis of headings, hot spots along with other effectiveness factors. [3]
References