How To Calculate CTR

CTR, also known as click-through rate, is an extremely effective and useful metric to measure your ad engagement in your PPC campaign.

How To Calculate CTR

It is essential to your virtual marketing strategy that you learn how to calculate CTR so you can improve your PPC campaigns wherever necessary. 

In this article, we will tell you exactly how to calculate CTR, and more! So, if this is of interest to you, read on for more. 

What Is Click-Through Rate?

A click-through rate, also known as a CTR, is a percentage that assesses how many users clicked on your ad compared to the users who saw it. 

So, if your CTR is 100%, it means that everyone who saw your ad clicked on it. So, a high CTR means more people are clicking on your ad once they see it, and a low CTR means more people are not clicking on your ad even though they have seen it. 

Your CTR should tell you this:

  • Which ads are performing well 
  • Which ads are not getting clicks and need to be changed or paused 

Think of your ad CTR as a snapshot of your keywords, ad groups, campaigns, and ads. You will even be able to use a CTR-based filter for detailed analysis within Google Ads. 

How Do You Calculate CTR?

Here is the formula to calculate CTR:

CTR = (Total Clicks / Total Impressions) X 100 

So, the two factors needed to calculate CTR are clicks and total impressions

For example, if your ad gained 50 impressions and was clicked on by 8 people, then your formula would look a little like this. 

CTR = (8  / 50) X 100

CTR = 0.16 X 100

CTR = 16% 

First, you substitute the words in the formula with numbers to make a math equation. So, using the example above, “total clicks” becomes “8”, and “total impressions” becomes “50”. 

Then, you will need to solve the equation in the parenthesis first. You do this by dividing clicks by impressions, or 8 by 50 in this case. Write down your answer. 

Now, take the number you got from the division above and multiply it by 100. This will take the answer from a decimal number to a percentage.CTR will always be a percentage. 

Once you have your percentage answer, in this case, 16% you will need to analyze this data and compare it to your industry to assess if you are doing well or how you can improve your campaign strategy.

What Are The CTR Benchmarks?

Different industries will have different CTR benchmarks. So, you will be able to research the average CTR rate for your industry, as well as the media you are using, such as ads, websites, or emails. 

From here, you will be able to compare your CTR rate to check how your ads or links are performing. These days, many users have become desensitized to the volume of ads they see daily on the internet.

So, the average CTR is 0.2%, with 2 users per 1,000 impressions. 

What Are The Benefits Of Calculating Your CTR?

How To Calculate CTR

Typically, ad networks, such as Google Ads, will discuss CTR in their reporting data. So, you will not need to manually work out your CTR percentage. However, it is important that you understand the benefits of calculating CTR so you do not risk overlooking it. 

Here are the benefits of calculating CTR:

  • Calculating CTR permits you to compare the CTRs of different keywords, ad groups, and ads that your ad network does not show or calculate 
  • You will understand how to interpret your CTR and where improvements need to be made 
  • You will be able to generate CTR, impression, and click reports for every campaign run by your business for use in-house
  • Calculating CTR will help you with your decision making when it comes to comparing month-to-month PPC campaigns

How To Improve Your CTR?

If your CTR is low, then do not worry. There are a few things you can do to boost your CTR, such as:

  • Make sure your ads are relevant to the search query they are showing up for. If ads are irrelevant, then they will not get clicks 
  • You can A/B test all of your ad copy in order to figure out the cause of your low click-through rate 
  • Carry out an inspection on all of your impressions. If you find that your keyword or ad has low impressions, then it is natural that your CTR will also be low
  • Take the time to improve your quality score as this is the largest contributor to your ad CTR. The best way to do this is by making sure all of your landing pages, keywords, and ads are relevant
  • Make your ads more prominent by investing in ad extensions. Prominent ads are more likely to get clicks, especially when compared to ads that don’t instantly grab the attention of the user 

Display Ad CTR vs. Google Search CTR

There is actually a big difference between display ad CTRs and Google search CTRs. This is because your ad is shown to people who are searching for a service or product when it comes to search campaign ads.

This means Google search ads are more likely to have a high CTR because people are more likely to click on ads they deem relevant to their needs. 

However, display ads are different. Your display ad may still be relevant to a user, but if they are not currently searching for a service or a product, then they are far less likely to click on your ad. 

Final Thoughts

CTR is a useful metric to assess how well your ad engagement is performing. It assesses how many people click on your ads compared to how many people view your ads using this formula:

CTR = (Total clicks / total impressions) x 100 

Once you find your CTR percentage, you will be able to use it to assess how well your company is doing or the areas you need to improve.

CTR is one of the most useful things you can do for your online marketing strategy, so it is important you know how to calculate it. 

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