What Is an Average Click Through Rate (CTR) and How to Improve It
Average click through rate can be described as the ratio of ad clicks to impressions in their Ad Words campaigns.
While basic CTR measures the rate of clicks on each ad, average click through rate calculates the number of clicks vs. impressions across their campaign, or for each individual keyword. A low ad CTR can prove to be problematic, as it can drag down the Quality Scores and affect future ad placement.
Low CTRs signal a lack of relevance for their ad viewers, who aren’t inspired to click on their ad and visit their landing page to learn more about their offer or take the desired action.
On the other hand, a high average CTR – either across their campaign or for a specific keyword – doesn’t always mean success. It is one indicator that, when combined with other KPIs (key performance indicators) can point to the success of their campaign.
However, high averages CTRs with low conversions may actually mean that they are wasting spend by attracting people less likely to convert. This may be caused by targeting that is too broad, irrelevant ad copy, or a combination of both.
Average click through rate can also affect future ad performance, as Google uses their historical data to calculate their Expected CTR, how likely they think it is their ads will get clicks when shown for specific keywords.
Better keyword targeting and negative keyword discovery can help a business organization improve their CTRs, thereby reducing wasted spend and improving their Quality Scores.
The purpose of click-through rates is to measure the ratio of clicks to impressions of an online ad or email marketing campaign. Generally the higher the CTR the more effective the marketing campaign has been at bringing people to a website.
Most commercial websites are designed to elicit some sort of action, whether it be to buy a book, read a news article, watch a music video, or search for a flight. People rarely visit websites with the intention of viewing advertisements, in the same way that few people watch television to view the commercials.
How to Calculate CTR
As stated above as well that CTR is the ratio of showing how often people who see their ad end up clicking it. Click through rate (CTR) can be used to gauge how well their keywords and ads are performing. This is how the Click through rate (CTR) is calculated:
• CTR is the number of clicks that their ad receives divided by the number of times their ad is shown: clicks ÷ impressions = CTR. For example, if a business organization had 5 clicks and 100 impressions, then their CTR would be 5%.
• Determine the number of impressions their online ad received. For example, assume organization placed an online ad that received 1,000 impressions.
• Determine the number of unique clicks their ad received. Unique clicks are the total number of individual customers who clicked on their ad, which their ad provider can identify for an organization. If one person clicks on their ad multiple times from the same computer, it is counted as one unique click. In this example, assume their online ad received 20 unique clicks.
• Divide the number of unique clicks by the number of ad impressions to calculate the CTR for their online ad. Continuing with the example, divide 20 by 1,000 to get 0.02.
• Multiply their result by 100 to calculate the CTR as a percentage. In this example, multiply 0.02 by 100 to get a CTR of 2 percent. This means that 2 percent of the potential customers who viewed their online ad clicked the ad to arrive at their website.
Each of their ads and keywords has their own CTRs that the business organizations can see listed in their account. A high CTR is a good indication that users find their ads helpful and relevant. CTR also contributes to their keyword's expected CTR, which is a component of Ad Rank.
Note that a good CTR is relative to what business organizations are advertising and on which networks. A business organization can use CTR to gauge which ads and keywords are successful for business organization and which need to be improved.
The more their keywords and ads relate to each other and to their business, the more likely a user is to click on their ad after searching on their keyword phrase.
What Is the Average Click Through Rate for a PPC Ad?
The average click through rate on AdWords paid search ads is about 2%. Accordingly, anything over 2% can be considered an above average CTR.
However, it’s important to note that average CTR, as well as other key metrics, like conversion rate, can vary widely by industry because some industries are more competitive than others.
So, the best way to know if their CTR is higher or lower than average is to look at industry-specific benchmarks.
How Does Their Average Click Through Rate Stack Up Against Competitors?
The Ad Words Performance Grader analyzes their account against 60 different factors, offering insight for improvements across major KPIs including Quality Score, account activity, wasted spend an average CTRs.
The organization will also see how their performance in these areas compares to other advertisers in their industry, for the most accurate view of their competitive edge.
In the above image, from an Ad Words Performance Grader account analysis, an organization can see that the average CTR for each of the advertiser’s top 200 keywords is indicated with a green circle.
Hovering over each one, an organization will see impressions and clicks data for that keyword. The yellow line indicates the typical curve, giving organization valuable insight into how their CTRs compare to the average CTR in their industry.
The Ad Words Performance Grader helps an organization understand how keywords are performing against others in their campaign, as well as their competitors. See which keywords are weighing down their Quality Scores with low average CTRs and learn how to bring in more leads with better ad targeting.
Improve Your ROI with AdWords Recommendations for Average Click Through Rate
Keeping an eye on Average CTR can help trim wasted spend, especially when your CTRs are acceptable or even high, but still, the conversions are on the lower side?
Here analysis and recommendations will highlight opportunities to improve targeting, raise or lower average CTRs and increase conversions using ad copy, negative keywords, or other strategies.
In addition to a simple visualization of some of the top performing keywords within Ad Words Performance Grader, this helps the organization in finding recommendations which ultimately help in optimizing their average click through rate for more effective and relevant ads, more leads and a higher Quality Score.
Understanding your Average CTRs is critical for reducing wasted spend, recognizing how PPC keywords and campaigns translate to leads and sales and optimizing your campaigns for greater conversion and overall effectiveness.
With these insights, you are good to know average clickthrough rate and how to measure your PPC performance. For the best PPC tips, engage Lander’s team of digital marketing experts.