Click-Through Rate (CTR): Understanding What it is and How to Calculate it

Click-through rate, or CTR is a marketing buzzword that can be found scattered across the advertising industry. As we move further into a more immersive advertising age, it is easier than ever to drive ad engagement and improve your CTR’s. But before we get to how we can improve them, let’s first break down what a click-through rate is and how to calculate CTR.

What does Click-Through Rate (CTR) mean in Marketing?

Click-through rate can be described as the percentage of people who view and then click-through your advertisement to arrive at your landing page. If you are an advertiser, your goal is to have a high CTR. This means that your ad is successfully doing its job attracting user attention and getting them to act on your call to action.

How to Calculate CTR:

How to calculate CTR formula

A high CTR means that a greater percentage of people who see your ad end up clicking on it.

A low CTR indicates that there may be room for improvement when you create your next ad– whether it’s through new creative, a clearer call to action, or better targeting

For example: If a real estate company has a CTR of 0.56% on their display ads, they might need to consider revamping their advertisements because that number is significantly lower than the industry standard of 1.08%. (Refer to chart below for more information about industry benchmarks).  

How to calculate CTR exampleshows example is less than industry benchmark

What is CTR used to measure?

CTR’s can be used to measure the effectiveness of a variety of different online advertising campaigns. Display ads, search engine ads, and email campaigns are the most common types of ads that are measured in terms of CTR.

Industry CTR Benchmarks

This infographic depicts Google’s average display ad CTR’s which vary slightly by industry. With the exception of real estate, industry benchmarks are below a 1% CTR which shows significant room for improvement across the board.  

Google Ad benchmarks

 

How can you improve your ad CTR’s?

Incorporate 360-degree photos and videos into your banner ads.

Making your ad content more immersive and engaging is a highly effective way to improve your CTR’s. A recent study showed that 360-degree, VR ads perform 300% better than 2D ads when comparing their CTR’s.

performance metrics using VR ads

Not only do 360° VR image ads perform well, but 360° VR Video ads also lead to a much higher video completion rate than traditional video ads do.

VR video ads infographic

 

A/B Testing

A/B testing is a practice commonly found in marketing and it can be used to compare two variations of an advertisement to measure which drives higher clicks. These ads could be distinguishing between colors, fonts, or CTA’s.

This is a proven marketing strategy to determine which ad techniques drive higher CTR’s.

AB testing graphic

Transform your flat photos into 3D ad campaigns.

Facebook recently popularized a feature that allows users to upload three-dimensional photos to their personal pages. Marketers are beginning to take advantage of this new technology to utilize in advertising because there is so much potential for high engagement.

This is an example of how a 3D photo could be used in advertising. With this technology, ads will literally jump off of the screen. These ads are easy to create and they will drive CTR’s through the roof.

higher CTR--example of 3D Photo ad