What Is A Good Click Through Rate

advertising metrics click through rate
click through rate

Ever wondered what you’re supposed to do with a click-through rate? 


You’ve created your campaign, monitored the stats, reported on the statistics. Now it’s time to understand what those numbers mean, starting with the click-through rate. There are many reasons why marketers want to optimize this number, especially in pay-per-click advertising. In order to know how to do that, you need to know the purpose of a click-through rate, how to calculate it, and what’s a good rate for your campaign. 


What is the purpose of click-through rate?


Click-through rates tell you how many of the people that
see your ad, click on it. It’s measured in percentages. This means that the number you see in your campaign’s report is the percentage of people clicking out of everyone who’s seen your ad.

This makes it very important to advertisers.

There are three reasons why knowing your CTR can make or break your campaign. 

  • First, it gives you an idea of how your campaign is doing. 
  • Second, a higher click-through rate garners you a better rank with search engines, and thus a lower cost per click. 
  • Third, adjusting your ad to get a better click-through rate will improve your ROI.  

Let’s break each one of these down.


Overall success

Whether it’s your campaign or one you’ve set up for a client, once it’s sent out, it can feel like there’s no way if it’s doing well until it’s run its course. 

Enter the click-through rate.

Checking this little number can tell you a lot. A high click-through rate means you’re driving a lot of people to your offering. Your ad has caught the audience eye and inspired them to click. 

Congrats, your ad is a hit! 

A low click-through rate means your ad isn’t effective. There’s something missing from the copy or the imagery in order to have the pull you want. You’ll likely need to adjust at this point – tweak a headline, revise some copy, change out an image or video. 

You may even need to change your target audience… but we’ll get to that in a moment.

An average click-through rate means your ad is doing okay. It’s chugging along as expected, attracting the right amount of attention, and people are clicking through enough that you don’t need to adjust anything if you don’t want to.

Of course, there is one caveat here.

Click-through rates may give you a sense of your overall success, but they don’t tell you the whole story. That one number has none of the specific information you may need when you want to adjust. 

If you do have a low click-through rate, you’ll likely want to dive into the specifics. Look at things like your individual keyword rankings and target audience reach, so you can identify what needs improvement.

 

Improved ranking & cost per click

Search engine ad networks, like Google Ads and Bing Ads, use quality scores to determine which campaigns should have higher rankings and lower costs per click. These scores are based on how well pay-per-click ads perform historically and across their networks.

And guess what? The click-through rate is one of the things they use to determine your quality score. 

High click-through rates lead to higher quality scores. Because, the more people click on your ad, the more the search engine benefits. 

Ad networks want your ad to get as many (paid) clicks as possible, so when they see an ad doing well, they bump it up into the prime spots. This means higher page rankings and more visibility across the ad network.

They also want to reward you for a job well done (and make sure you keep your ad running). So, they lower the cost per click, allowing you to run the campaign longer and still stay on budget. 

Naturally, there’s so much more to the Quality Score than that.

Let’s look at Google Ads, specifically. They have the most robust Quality Score system of all the ad networks.

The Google Ads algorithm offers pricing discounts for ads that appeal to the audience – ones that make searchers happy. Once the algorithm sees that your ad meets the brief, it offers you the lower click price, and places your ad in a better place (aka higher rank) so more people will see it (and thus click on it). 

Of course, the click-through rate isn’t the only data point the algorithm looks at. It also looks at:

  • Keyword relevance (within the ad group)
  • Landing page quality and relevance (to the ad/topic)
  • Ad text appeal (and relevance, again)
  • Account history and your past performance on the Google Ads network.


    Source

 

Better returns on your investment

We all know that a successful ad campaign isn’t about lots of views or tons of clicks. You also want a high ROI. Click-through rates play a key role in this. 

How, you ask? 

We’ll start with the pay-per-click end of things, which we’ve touched on with the Quality Score. Monitoring your click-through rate and positioning your ad for a higher Quality Score means your ad is in front of qualified customers at a cheaper rate. That equals more leads and (in a perfect world) higher profits. 

Now comes the flip side. When you see a high click-through rate with zero corresponding profits, leads, quote requests, or follow through on your call to action, you know something needs to change with your ad. 

Let’s face it. Everyone in the world could click your ad and it wouldn’t do any good if no one’s actually buying.

If this happens, you’ll likely want to change the offer; it could be misleading people. They click your ad and then don’t find what they think they’re going to find on your website or landing page. Or maybe it’s too appealing; people are clicking out of curiosity without any actual intention of following through.

The point is, your click-through rate can help you figure out there’s something wrong and fix it right away. This ensures you can get a truly good ROI. 

Now that you know why the click-through rate is important, it’s time to learn how to calculate it. 


How do you calculate click-through rate? 


A little reminder here: a click-through rate is the percentage of people who’ve seen your ad that clicked on it. Naturally, the formula to calculate your click-through rate is, as you might have guessed, a percentage formula: 

(Total Clicks on Ad) / (Total Impressions) = Click Through Rate

Luckily, most ad platforms do all the math for you. 

Jump on over to the dashboard and look for the metric “Click-through rate” or “CTR” for your ad campaign. Google Ads Performance Grader is another tool you could use to measure your click-through rate performance. It’ll also compare your ad’s click-through rate and other KPI’s to your competitors.

Before you do any math or jump around dashboards, it’s usually best to let an ad run for two or more weeks before you judge it. That’s roughly how long it takes for any good automated ad algorithm to find the right placement, ranking and location for your ad. 

Of course, it’s a lot easier to judge something when you know what’s good and what’s not. 

One way to do this is to set a click-through rate “goal” before you launch your ad. But what might that number be? This brings us to the next question: how to know if your click-through rate is good. 


How do I know if my click-through rate is good? 


There’s no easy answer to this one. What qualifies as “good” depends on a variety of factors, namely your:

  • Industry
  • Channel/platform
  • Ad placement

Google Ads average click-through rate – across all industries, platforms, purposes and placements – is 1.91% for their search network and 0.35% on their display network. As a general rule, a good Google Ads click-through rate is 4-5%+ on the search network, or 0.5-1%+on the display network. 

But that’s just an average. It doesn’t give you a solid number to aim for. To get an accurate idea of what’s a good click-through rate, let’s look at those three factors.

Industry

Each industry has their own average click-through rate. In fact, they have two: one for the search network and one for the display network. 

 

Here’s a quick and easy chart to see the click-through rate averages across 20 different industries: 

The easiest way to set a click-through rate goal is to find your industry on the chart, use that number as your benchmark … and then aim higher.

Already have a click-through rate and want to check how it compares to others in your industry? Or maybe your industry isn’t listed in the chart? 

Word Stream’s benchmarking tools can help you out there. They take your metrics and compare them against other companies in your industry to give you an accurate idea of how you’re doing. 

 

Channel/Platform

As we’ve seen with the Google search network versus the Google display network, different channels and platforms will give you different click-through rates. 

That has less to do with the quality of your ad and everything to do with the audience’s intention. 

Take the search versus display networks, for example.

The search network’s click-through rate average is higher because the search network audience is actively searching for content related to specific keywords, whereas the display network audience skim ads passively, usually with no intent to click.

Likewise with Twitter ads versus LinkedIn ads. In fact, Twitter has the highest click-through rate (2%) of all the social media platforms, and LinkedIn has the lowest (0.06%). Intention is one very large reason for this; people use LinkedIn for networking, not finding new products or services. 

Not only is the audience intention different from platform to platform, so are the ad formats and demographics. 

The number of ad types a platform offers will also affect your click-through rate. Facebook, for example, offers several different ad types. Each of its ad types has a different average click-through rate from link ads at 0.72% to video ads at over 2%.

Each channel and platform speaks to a different group of people. Tailoring your ad to that group will increase your chances of a higher click-through rate.

Ad placement

This probably won’t come as a surprise, but where your ad appears on the page affects your click-through rate (shocking, I know). 

Let’s pop back to Google’s Quality Score. The score itself is a ranking from 1-10. According to AccuraCast, ads that rank first, have an average click-through rate of 7.11%. Second has 3.01%, third has 2.19%, and fourth has 2.15%. Compare that to ninth’s 0.55% and you can see that placement can make or break your click-through rate.

These numbers from Google’s Quality Score ranking reflect the numbers we see outside of ads. When people use a search engine, they’re most likely to click on the first three results. And they, at most, look at the first three pages of search results. Anything further and you’re less likely to be seen. 

All this means that when you set your click-through rate goal, or when you’re trying to determine if you have a good click-through rate, take a look at your ranking and placement. 

If your click-through rate is low and your ad sits near the top of the page, you may want to adjust your ad. But if you’re low on the page, it’s likely your ad is doing just fine.

Use your click-through rate wisely

Click-through rates are important when it comes to the metrics we use every day. They help you see the overall success of your ad campaigns, boost your current (and future) ads through the search engine ranking systems, and generate a higher ROI. 

Now that you know how to calculate your click-through rate, you can compare it to the industry benchmarks to get a more accurate sense of how you’re doing. 

Remember, higher isn’t always better, and lower doesn’t mean your campaign failed. When it comes to click-through rates, every factor plays its part. And now you understand why. 

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