Your Comprehensive Guide to Click-Through Rates

As a small business owner or in-house marketer, your goal is to ensure that any time you invest in a new marketing campaign, you are making the most of every penny spent. This is why it is imperative that you continually measure how successful each marketing strategy is, attributing actual revenue to your marketing tactics.

Too often, small businesses set a marketing campaign into motion and walk away without taking the time to measure the campaign’s performance. This can lead to a high amount of wasted spend. The good news is that most marketing platforms now include the ability to dig into key performance metrics.

While numerous metrics can help indicate how well a campaign is performing, one basic but important measurement is an initiative’s click-through rate. In this guide, we’ll cover everything you need to know about click-through rates, from understanding how this metric is measured to providing actionable insights into improving click-through rates across marketing campaigns.

What Is a Click-Through Rate (CTR)?

A click-through rate (CTR) is a ratio that indicates the number of times someone clicked on a specific link relative to the number of times someone saw that link.

For example, if you are running a Google Ad campaign, every time your ad is surfaced to a searcher, it will be counted as an impression. From here, you could see how many searchers clicked on your ad’s call to action (CTA) relative to the total number of impressions. The ratio is expressed as a percentage, calculated by taking the total number of click-throughs, dividing it by the total number of impressions, and multiplying this by 100.

  • CTR Formula = (Click-throughs ÷ Impressions) x 100

In the example above, let’s say that your Google Ad was shown to 100 people and two people clicked on the ad’s CTA. The CTR for that ad would be 2%.

CTR can be measured on Google Ads, social media, email marketing, and SMS marketing campaigns. You can also use CTR to determine the success of CTAs on your own website. The overarching goal of this metric is to help you understand what ads, landing pages, and other content forms are leading customers to take an intended action.

What Is a Good CTR?

Now that you understand how to calculate CTR, your next step is to determine whether a campaign’s CTR is up to par. What is a good CTR? The answer depends on your specific initiative.

For starters, the ideal CTR changes based on your industry. In certain highly competitive markets, a lower CTR is more acceptable than in a niche market, where it would be expected to run campaigns with a high CTR. Logically, if you are competing against hundreds of similar businesses in your market, you won’t have the same rate of success as you would when you are one of a handful of businesses in the area offering your services.

Secondly, it depends on the keywords you are using to run your ad campaign. For example, if you are running an ad campaign on Google using a combination of keywords that includes your own business name, you should expect a much higher CTR. In this case, it is likely that your CTR will be in the double digits. In this case, if someone is already searching for your business by name, it is expected that they will click on your ad. Conversely, if they are searching broadly for a service or product, it is harder to capture those clicks.

Finally, the platform and style of the ad also matter. For Google Ad campaigns, the average CTR across all industries is 3.17% for search and 0.46% for display. On Facebook, the average CTR for ads is 1.32%. Email marketing has a higher CTR than search and social media with an average CTR of 10.29%.

Realistically, there is not a specific number you should be looking to reach. Rather, it is important to benchmark your progress to ensure you are receiving value relative to the amount you spend on your marketing campaigns.

Why It Is Important to Measure Your CTR

While the ideal CTR might not be concrete, it is still imperative to measure your CTR. Measuring your CTR will help you in a few ways. For starters, as you begin to measure your CTR across numerous campaigns, you will build a benchmark. You can use this to measure whether your ads are improving over time, or if their performance is decreasing.

Ultimately, your CTR indicates how well your ads are connecting to their intended audience. If you have a high CTR, it showcases that searchers find your ad to be relevant to their needs. Conversely, a low CTR often indicates that searchers do not find your ad compelling, or they don’t believe it matches their search intention.

There are, however, a few caveats to this logic. Before you simply hit pause on a campaign due to a low CTR, consider the following:

  • Are your ads performing well based on actual lead generation? It is important to remember that click-throughs are not the same thing as conversions. Even if you have a low CTR, if those who are clicking on your ad are converting into actual paying customers, you could still be reaching your lead generation goals. On the flip side, even if you have a high CTR, if those customers are not converting into actual leads, you could be wasting money. A good way to measure this is to contrast your CTR with your conversion rate. This will let you know whether you have a high cost per conversion or a low cost per conversion.
  • Are you using a broad keyword search strategy? In some cases, a low CTR is to be expected. If you are looking to generate new leads through a broad keyword search strategy, it is normal to have a low CTR. For example, if you are running a campaign targeting the keywords “home services,” but you are offering a special specific to HVAC services, you might have a lower CTR, as not everyone looking for home services is looking for HVAC services. However, this could still be an intelligent strategy if you are earning leads at a much lower cost due to the use of a broad search term.
  • Does your ad simply need tweaking? Before giving up on an ad campaign, make sure you have taken the time to consider whether it is simply your ad copy or ad design that needs improvement. Something as simple as improving your headline or imagery could make a big difference in your CTR.

Practical Tips for Improving Your CTR

While there are situations where a low CTR is not cause for concern, it is always worth increasing your CTR to the highest number possible by optimizing your ads and website. To improve your CTR, use the following checklist.

Make Sure Keywords Stand Out

When someone types a search into Google or lands on your website, they have a specific intent in mind. For example, if they are looking for an oil change for their car, they will be more likely to click on an ad or follow a website link that clearly indicates the service offered is an oil change.

Make sure your ad copy contains focused keywords in both the headline and in the copy. For your website, make sure you clearly indicate through headings and banners what service is being offered.

Create Compelling Copy

People are persuaded by quality copy. Rather than simply stating a service, make sure your copy tells a story. Start by considering what problem your customer is facing and how you can help solve that problem. Write copy that answers these questions in a compelling manner.

Indicate a Clear Call to Action

One of the number one culprits of a poor CTR is simply a lack of direction. If you don’t tell a customer where to click or what action to take, it is going to be difficult for them to take action.

Every single ad and every page on your website should have a clear, concise call to action that is easy to follow.

Include Imagery When Possible

People are drawn to images over plain text. If the ad platform allows for it, include high-quality imagery with your ads. This can help your ad stand out from the rest. Make sure the imagery matches the ad and contributes to a cohesive brand image.

Focus on Your Ideal Customers

If you continue to battle low CTRs, you might also need to consider whether you are targeting the right customer segment. If you are paying for a high number of impressions, but these viewers are rarely clicking on your ad, you might be paying to surface your ad to the wrong group. This is where it is important to understand who your target audience is and the best way to reach them.

In some cases, you could be using the wrong channels. Test out the same ad across different platforms and see if this provides a lift in click-throughs. Remember, the end goal is not simply to increase clicks, but to see an uptick in total conversions. This will only happen when you are targeting the right audience segment.

Optimize Your Marketing Campaigns With J&L

Running ad campaigns requires careful consideration of numerous metrics. Rather than simply setting an ad campaign into motion and walking away, you should be continually optimizing your ad campaign, as well as your website, to increase the number of leads these marketing strategies earn you. However, for most small business owners, there are simply not enough hours in the day to stay on top of all these measures.

At J&L Marketing, we are here to help. We work with our clients one-on-one to create optimized marketing strategies. We will begin with a deep dive into your market, ensuring we have clear benchmarks before starting. We will also take the time to understand your competition, allowing us to glean critical insights about your specific playing field. From here, we will work with you to create optimized campaigns that deliver real results. We continually measure the success of any strategy put into place and adjust as needed. If you’re interested in getting started, reach out for a consultation today. We can’t wait to help you increase your lead generation through intelligent marketing strategies.

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