Clicks and Click-Through Rates (CTR)

What is a Click?

• A form of interaction with an ad that causes a redirect to another web page

If you click this banner ad… You are redirected to this webpage

What is a Click-Through Rate (CTR)?

• A CTR is the percentage of impressions that clicked the banner ad

• Equation: – CTR = # of clicks/# of total impressions served x 100– Example: 200 clicks/200,000 impressions x 100 = 0.1% CTR

• Industry average CTRs typically range between 0.1% and 0.25%

Typical Click-Through Rates by Banner Size

Typical Click-Through Rates by Industry

What Happens After the Click…

• After clicking a banner ad, users can do a variety of things related to that advertiser, including – – Complete the desired action on the landing page– Click through to the main site to look for other products/services– Search for the advertiser’s main website the next time they want

to locate info on that product/service– Redeem coupons– Visit store locations– Call the customer service line

• Therefore, online advertising leads to increased search activity, brand awareness, and website usage

Post-Click Conversions• Many advertisers want to track not only how many people clicked

their banner ad, but also how many people completed their desired action – whether that be ordering a product, signing up for an account, downloading a document, etc. – which is considered a conversion

• A conversion rate is the percentage of people who clicked the banner and completed the desired action defined by the advertiser

• Equation for Conversion Rate:– # of conversions/# of clicks x 100 = Conversion Rate

• Example:– 200 orders/2,000 clicks x 100 = 10% Conversion Rate

What is a Successful CTR?

• When analyzing CTRs, the advertiser needs to take into account not only the amount of clicks, but also the following to truly measure a website’s effectiveness in generating business for their company – Media spend CPM of the buy # of conversions Cost-per-order (CPO)

• A website that produced a low CTR could actually have generated more conversions and a lower CPO than a website that produced a higher CTR (so, spend and conversions matter)