For a long time, Click-Through Rating (CTR) has been one of the most valued metrics when evaluating web marketing campaigns. But what does CTR really tell you about the capacity of your ads to boost your sales?
In other words, does it matter to have a good CTR when you’re working with Google Ads or Facebook Ads?
The answer can be confusing: Yes, but.
While it is still an important piece of data to keep in mind, it’s a mistake if you measure the success of your campaign based on this parameter.
Because a good CTR doesn’t necessarily mean you’re achieving your goals. It just means you’re having licks, but not necessarily sales. Paying too much attention to the CTR can cause a large waste of money on people who are not really interested in your product or service.
What is a Click-Through Rate?
This metric is calculated by the number of times your ad is clicked divided by the number of times your ad is seen.
CTR tells you how many people that saw your ad (an impression) actually clicked on them to discover more about what you’re promoting. To put it an equation, it’s something like this: CTR = clicksImpressionsx 100
The problem is that the thing that should be concerning you the most is not how many people click on your ad, but what people are doing after they click. What you are looking for is a conversion – someone buying your product, downloading the feature you are promoting, subscribing a newsletter or just following whatever action you intended them to do.
So, more than just the CTR, your business will have much more to gain if you improve your conversions.
Bear in mind that if you are running a pay-per-click campaign, you will be charged whether your target takes the action you want or if the user just spends two seconds on the landing page after the initial click. So your goal is to make each click count.
Your CTR must be attracting the right people – those who are willing to go the extra mile and perform the action that will lead you to fulfill your objectives. So, before you start looking at the metrics, you should optimize your target, making sure you are reaching the right people.
There is another common misconception on the importance given by platforms like Google or Facebook about CTR. No, more and more, the price of your ads and the exposure they get is not connected with the clicks.
The sophisticated algorithms used by Google Ads and Facebook Ads pay much more attention to things like quality and conversion. Generating clicks is not what makes the clock tick – what matters is what people do after they’ve clicked.
What should you use CTR for when optimizing ads?
Like stated before, CTR should not be the measure by which you evaluate the success of your campaign, but it’s still a valuable tool to increase the level of response to your ads. Let’s see how CTR makes a difference.
- Judging the performance of your ads
It’s very important that users that get in contact with your ad feel curious enough to click on them. When you have a campaign with multiple ads (which is always the best practice), you can use CTR metrics to compare them. Those with higher CTR are communicating better with the people you want to engage.
- High CTR means that your audience & ad copy/imagery align. Low CTR means that they do not
The right text combined with the right imagery make people want to know more about what you are offering. High CTR means you are reaching the target intended and generating interest on what you are offering.
On the opposite, a low CTR means that your message is not passing. People are not feeling interested and something needs to be corrected.
Is your text compelling and accurate? Did you choose the right image colors and composition. Did you include a Call to Action that is appealing enough to make users click on your ad?
CTR can be the best tool to tell which of your ads are working and which ones fail to deliver.
What affects CTR?
- Headlines & imagery mainly
What is it about your ad that makes people want to click on it? Well, the answer takes us back to the principles of advertising: good text, and even most important, an appealing image and visual content [INSERT LINK OF THE POST ABOUT IMAGERY IN ADVERTISING].
People notice your ad if they are attracted to what they see, even more if what they read matches their expectations. If the image stops the scroll, then the headlines collect interest in the user, generating an impulsive click to learn more.
Including a powerful Call to Action like, “get free trial”, or “try it with no compromise” can be helpful in persuading the user to click, but beware of click bait tactics. More and more people don’t tolerate being deceived and you end up with the problem explained before: having someone on your landing page for five seconds will cost you money, with zero effect on your sales.
What should you use CTR for?
Use this metric to make sure people are clicking on your ads. Test, compare and identify which of your ads are on point, exclude those who fail to get traction.
It goes without saying, if you are paying $100 no matter what, it would be better to get 5% of that audience to click over to your landing page than only 2%. But remember, this will only works if you’re reaching the right target. Make sure those who are watching your ads are the ones most likely to find them useful.
So…does CTR matter?
Back to the beginning:
Yes, it matters if you want to be sure that your ads are being perceived as relevant, making users follow the message and reaching the landing page.
No, it doesn’t matter that much if you are evaluating the overall success of your campaign.
Take into consideration two other metrics that give you a much more direct feedback on the impact of your advertising:
- ROAS (Return on Ad Spend)
A very simple metric that is the result of basic arithmetics: ROAS= Revenue/Cost.
In a glance, this metric tells you what you need to know about your money: which ads are bringing back much more than what you’ve invested and which ones seem to be a waste of your precious dollars. Learn more about ROAS here [INSERT LINK OF ROAS POST]
- CPA (Cost Per Acquisition)
Cost Per Acquisition measures the aggregate cost to acquire one paying customer on a campaign or channel level. CPA is a vital measurement of marketing success. So if you are having a great CTR but few of those clicks generate sales, that means you pay a lot more for each completed transaction.
On the contrary, if fewer clicks give you more return in terms of sales completed, it means your CPA is higher because you’ve spent less on advertisements to achieve this result. This metric underlines how you can be deceived if you only evaluate your campaign by the CTR.