The Click-Through Rate (also known as CTR) is way too often seen as a key indicator for measuring the effectiveness of digital advertising campaigns.
This click-through rate, which seems to be a simple and straightforward way of measuring engagement, can also lead to poor analysis and erroneous decisions. In this article, we'll look at how to use the CTR correctly when analyzing campaigns.
What is the CTR?
The CTR is calculated as the ratio of the number of clicks generated to the number of impressions of an ad. It is expressed as a percentage.
A high CTR is generally taken as a sign of an engaging ad that attracts users' attention.
The limits of the CTR
A good CTR is not everything!
For a start, CTR measures initial engagement but does not guarantee that clicks will translate into concrete actions such as purchases, registrations or requests for quotes. A good CTR does not necessarily mean a good ROI (Return on Investment). In fact, there is often little correlation between CTR and conversion rate.
A high CTR can also be misleading. For example, catchy ads can attract a lot of clicks, but if the message doesn't match the user experience or the end product, it can lead to a low conversion rate. Also, some display placements generate ‘misclicks’, showing high CTRs but very low traffic quality. A classic scenario!
Finally, you mustn't choose the wrong main KPI. If you want to generate traffic with a given advertising budget, it's the CPC (Cost per Click) and not the CTR that you should be looking at first. To see this for yourself, just look at the 2 examples below:
- Campaign A: for a CPM of CHF 10 and a CTR of 0.50%, the CPC will be CHF 5.
- Campaign B: for a CPM of CHF 5 and a CTR of 0.20%, the CPC will be CHF 2.5.
So, by focusing on the CTR, the risk would be to think that campaign A performs better than campaign B; when in fact it's campaign B that will get the most clicks for the same budget. So beware of the CTR, which can act as a decoy!
Should you still look at the CTR?
Yes, and it's even essential to analyze the CTR!
For platforms such as Google Ads or Meta, the CTR has an influence on the price you pay (whether CPC or CPM). In fact, these platforms are keen to offer ads that are always relevant to their users. They will therefore try to favor advertisers who offer relevant content, and CTR is one of the parameters that enables them to judge the relevance of ads. And for us media buyers, paying attention to the CTR helps us to obtain more competitive prices on these platforms.
The CTR is also a good indicator for analysing an A/B test of ads. For the comparison between 2 ads to be relevant, the A/B test must of course be carried out under identical distribution conditions (same platform, same targeting, same context). If we consider that the delivery conditions are identical, then the CTR can be used to distinguish between 2 ads. If we're looking to generate conversions, we'll also look at conversion rates to separate the 2 ads.
Finally, the CTR is one of the indicators that should be looked at to understand the weak points of a campaign.
We don't look at the CTR in absolute terms, but rather in relation to a benchmark (platform, format, advertiser, industry, etc....).
A high CTR generating a low conversion rate suggests that the user on the advertiser's site is disappointed. It is therefore necessary to review the match between the message and the product, or the user path,
An abnormally high CTR, with a very low clicks/visits ratio, will highlight a problem with inventory and placements generating ‘misclicks’. It could also be a problem of redirects taking too long to load.
A marked drop in CTR throughout the campaign, with constant delivery parameters, may be a sign of advertising fatigue and too much repetition of the message.
And so on... there are many scenarios in which the CTR says something about the campaign!
In conclusion
In conclusion, the CTR in absolute terms is not very meaningful. And it should not be taken as the main objective of a campaign.
On the other hand, CTR, expressed as a relative value, is an important indicator for understanding and optimising a campaign, without losing sight of the main objective (CPC, CPL, ROI, etc.).
Finally, trying to improve CTR through the quality of your ads is still a good practice that should be applied on many platforms to optimize your purchase price.
