Clicks and Click-Through Rates (CTR)

What is a Click? A form of interaction with an ad that causes a redirect to another web page If you click this banner ad… You are redirected to this webpage

What is a Click-Through Rate (CTR)? A CTR is the percentage of impressions that clicked the banner ad Equation: – CTR = # of clicks/# of total impressions served x 100 – Example: 200 clicks/200,000 impressions x 100 = 0.1% CTR Industry average CTRs typically range between 0.1% and 0.25%

Typical Click-Through Rates by Banner Size

Typical Click-Through Rates by Industry

What Happens After the Click… After clicking a banner ad, users can do a variety of things related to that advertiser, including – – Complete the desired action on the landing page – Click through to the main site to look for other products/services – Search for the advertisers main website the next time they want to locate info on that product/service – Redeem coupons – Visit store locations – Call the customer service line Therefore, online advertising leads to increased search activity, brand awareness, and website usage

Post-Click Conversions Many advertisers want to track not only how many people clicked their banner ad, but also how many people completed their desired action – whether that be ordering a product, signing up for an account, downloading a document, etc. – which is considered a conversion A conversion rate is the percentage of people who clicked the banner and completed the desired action defined by the advertiser Equation for Conversion Rate: – # of conversions/# of clicks x 100 = Conversion Rate Example: – 200 orders/2,000 clicks x 100 = 10% Conversion Rate

What is a Successful CTR? When analyzing CTRs, the advertiser needs to take into account not only the amount of clicks, but also the following to truly measure a websites effectiveness in generating business for their company – Media spend CPM of the buy # of conversions Cost-per-order (CPO) A website that produced a low CTR could actually have generated more conversions and a lower CPO than a website that produced a higher CTR (so, spend and conversions matter)