Click-through rate (or CTR) is the ratio that measures the number of clicks on a specific link to the number of times people have seen the link (also known as a number of impressions). In ecommerce, CTR plays an essential role because ecommerce stores and service providers require users to make an action, for example, to buy a microwave, read an article or book a suite.
CTR also helps businesses in developing and improving their advertising campaigns for the target audience. A low CTR is a sign for the company that it’s either targeting a wrong audience or the message is not compelling enough.
It is quite simple to calculate a CTR using the next formula:
Click-throughs / total coverage x 100
For example, 1000 users have seen an online ad; 100 of them decided to click the link, which means that this ad has a CTR of 10%.
It is hard to say which CTR is “good” and which is “bad” due to the difference in industries, goals of ad campaigns, and even the usage of different keywords. When companies want to determine “good” and “bad” CTRs, it’s a good practice to conduct research on the average CTR of their industry.
It is worth emphasizing that different platforms require different approaches to improve CTR. For instance, if a business is looking to improve CTR on a social media channel like Twitter, right hashtags are a useful tool to reach the target audience.
In general, there are 3 ways to increase a CTR:
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