Why the Click-Through-Rate Counts

Gathering click-through-rate data is an often-debated metric of importance. While some analysts believe in the relevancy of the data, others may deem it as unreliable. This is supported by an article that evaluates the importance of the click-through rate as its author claims, “Click-Through-Rate (CTR) is one of the metrics which some advertisers swear by, while others discredit,” (Hadden, n.d.)

The click-through-rate is simply the number of click-throughs for that specific link calculated through a division of the number of times that link was actually viewed. Marketers often use this metric for tracking email marketing campaigns where the rate is typically presented as a percentage of the total number of customers that opened the campaign email. For example, “a 40% email click-through rate would mean that for every 10 people that opened your campaign, 4 people went on to click a link in that campaign,” (“Reporting on your email marketing campaigns,” n.d.) A graphic example of the click-through-rate from an email marketing campaign is presented below.

Click-through-rate data gathered from email marketing campaigns can also be described as a key metric. Key metrics are, “…the high-level data points that show the overall success of your email marketing campaigns. These include open rate, click-through rate and unsubscribe rate among others.” (“Reporting on your email marketing campaigns,” n.d.) This key metric data can help businesses to understand their ROI efforts, as well as show marketers what content is engaging to the customers and what can be improved upon in future marketing campaigns.

The click-through-rate metric is also important for internet marketing and advertising campaigns, in which the metric can show advertisers the number of clicks they have received on their ads per number of impressions. A pay per click or PPC click-through-rate is a form of internet marketing where advertisers pay a fee when one of their advertisements is clicked on. In most cases, a high click-through-rate is a great insight for advertisers to see as it shows that a high percentage of potential customers who see the advertisement are intrigued enough to click it.

However, it is important to note that this metric can vary by industry and there is no magic number that can determine what a good click-through-rate is. According to a definition by Yahoo found within the following article by author Larry Kim, “Click-through rates are naturally going to vary from campaign to campaign, and even from keyword to keyword. Everything involved in the way your ad is displayed plays a part, from your ad copy to the ad’s ranking on the results page.” (Kim, n.d.) A distinction Kim also makes is that a high click-through-rate is not always a good metric for businesses in the case of having irrelevant keywords. Therefore it is important to have a good “high” click-through-rate on keywords in advertisements that are relevant and also affordable, “cost-effective clicks,” (Kim, n.d.)

A graphic example also found within author Larry Kim’s article on PPC and CTR shows below an insightful benchmark of click-through-rates in AdWords across 20 different industries.