What is a Good CTR (Click-Through Rate)?

With today’s crowded online marketing space, promoting your ad campaign to your target audience can quickly become an uphill battle. It’s no surprise that marketers use various metrics to help them gauge whether or not their ads are working.

Of all these metrics, there’s one that ranks above all others in marketers’ eyes: the Click-Through Rate, otherwise known as CTR. It’s a vital measuring tool that determines everything from your conversion rate to the cost per click of your ad.

But what’s a good CTR? More importantly, how can you achieve it?

What is a Click-Through Rate (CTR)?

The click-through rate (CTR) is the percentage of how many people clicked on an ad after seeing it. It’s one of the most critical and most optimized metrics in digital pay per click (PPC) advertising because it can be a good indicator of whether an online campaign is successful or not.

Calculating CTR is relatively straightforward. Simply divide the total clicks on an ad over the total number of times it was shown (also called ad impressions). Or, mathematically speaking:

CTR = (Ad Clicks / Ad Impressions) x 100%

For example, if 100 people viewed your ad but only 5 of them clicked on it, your click-through rate is (5/100) * 100% = 5%.

A high click-through rate means that most people who view your ad find it interesting, compelling, or relevant enough for them to want to click and learn more. The more people who click your ad, the higher chance you have to attract users who want to buy from you or respond to your offer. Thus, a high CTR can lead to increased conversion rates and better revenue.

But that’s just the beginning. A good CTR can also lower your ad expense.

Most major PPC platforms like Google and Facebook recognize CTR as an important metric and have made it an integral part of their ranking and pricing structure. Google AdWords, for example, uses a rating called Quality Score to determine ad relevance and quality. A higher Quality Score means the ad will be shown more often at a lower cost.

And what’s the most significant factor in calculating Quality Scores? You guessed it: CTR.

However, it’s important to note that a high CTR doesn’t necessarily mean your campaign is effective. In some cases, it can even be detrimental to your bottom line.

A common example is that your ad attracts people who clicked through but didn’t necessarily convert. Maybe your offer wasn’t compelling enough for these users, or your landing page copy wasn’t appealing or hard to navigate. It’s also possible your ad just wasn’t getting to the right audience. If the issue is the latter, you’re essentially wasting money on a high-CTR ad campaign that’s not giving you any returns.

CTR should always be viewed in context. A high CTR is only useful if it’s helping you hit your revenue goals. Otherwise, it’s just an empty metric burning through your cash.

Of course, a low CTR is never good. It’s an indication that your ad isn’t performing as well as you’d hoped, and not enough people are engaging with it. It may be that your headline isn’t compelling or you’re targeting the wrong audience. Regardless, a low CTR is a sure sign you need to make changes to your campaign.

CTR may seem like a simple concept, but there are lots of factors that can influence it. Some of these factors are within your control (such as the copy, offer, and creatives), but unfortunately, some are not (like the industry and audience). This lack of control means CTR can vary wildly between industries, sectors, and even ad platforms.

So if a high CTR isn’t always good, then what is a good CTR?

What is a Good CTR Rate?

Click-through rates are complex, and there is no single universal CTR to target. You’ll often see articles and advice floating around that you should aim for an average display CTR of 2%. While that’s a reasonable estimate and a good starting point, at the end of the day, it’s just that – an estimate.

A more effective way to approach this is to ask yourself: what is a good CTR for my industry? Target audiences and engagement levels in various industries differ, and it’s important to understand the industry-standard CTR for your niche. In other words, what’s the average CTR of your competitors and the top players in your industry? Use the industry average CTR as a benchmark to establish what a good CTR goal is for you.

To give you a starting point, here are some of the average CTR for display ads and search ads for more common niches and industries, according to a WordStream survey:

Take a look at the average search CTR of 6.05% for dating, one of the highest on the list. So if you’re in the B2B industry and aiming for that 6.05% CTR, it might be an unrealistic expectation. That’s because the dating niche has a larger and more emotionally motivated audience that’s much more willing to click on an ad.

The above insights illustrate why it’s never a good idea to rely on one universal CTR standard. Different industries in different regions will have their own unique quirks and subtleties that can influence click-through rates in profound ways.

You should treat your industry-standard click-through rate as a starting point. It’s best to look at the specific CTR your direct competitors are achieving, giving you the most accurate and realistic CTR goal for which to aim.

With your CTR target set, how do you achieve it?

How to Achieve an Industry-Standard Click-Through Rate

What is a good CTR strategy? As we mentioned above, many factors influence CTR, both within and beyond your control. To improve your CTR, you should focus on the former. Here are two factors to consider:

• Search vs. Display Ads

If you look at the industry average CTR list above, notice that the CTR for search ads is significantly higher than display ads. The nature of how these two work explains this difference.

Search ads refer to the advertisements you see on search engine results pages, or SERPs. Because people are already actively searching for a solution based on their keyword, they’re more likely to click on an ad that matches that intent.

On the other hand, display ads are the catchy visual ads you see when you visit websites or scroll through Facebook. The user’s intent isn’t necessarily there, which leads to fewer clicks overall. Display ads, therefore, are more often used for brand awareness campaigns.

• Relevancy

This is one of the most critical factors that can improve your CTR. An ad that’s highly relevant to its target keywords means that the audience searching for that specific keyword will have a higher chance of seeing and clicking on the ad.

There are two sides to relevancy: ad messaging and target keywords. Of the two, keywords are the ones you should start with. There are many ways to determine the right keywords to target, from SEO keyword research to segmenting keyword groups.

Based on your keywords, create the ad copy, images, and offer to compel your audience to respond and click.

Link URLs and Good CTR

Many marketers focus on keyword selection and ad copy for improving CTR but ignore the URLs they use. The truth is, branded links are the low-hanging fruit that can ramp up your CTR dramatically with little to no effort.

Create a Bitly account today to see how easy it is to create and manage branded links.

  This article originally appeared on The Bitly Blog and has been republished with permission.
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Author: Desiree Johnson

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