What is Click-Through Rate (CTR)?
Click-Through Rate (CTR) is the metric that measures the number of clicks advertisers receive on their advertisements, divided by the number of ad views, or impressions, that same ad receives. That is, click-through rate is the measurement of how frequently an ad compels viewers to “click through” to the specific landing page to which an ad leads.
In the app space, a click on app install ads will usually lead us to the app store page, or in the event of a re engagement campaign – to a specific page within an app (assuming deferred deep linking is supported!).
CTR is particularly important in performance marketing and direct response ads, compared to more branding-oriented ads.
It can be calculated as follows:
- Click-Through Rate = total number of clicks / total impressions
Or for email marketing:
- Click-Through Rate = percentage of people that have clicked on a button, link, or visual in an email / total number of email opens.
Why is CTR important?
Without a doubt, down-funnel metrics should always be the bottom line driving your user acquisition optimization.
That being said, CTR is still one of the stronger metrics for measuring the success of creatives and content, which should be balanced with your primary KPI(s) for the greatest overall performance.
CTR lends itself particularly well to like-for-like performance A/B testing and optimizing specific elements of a given ad or content piece.
For example, if you are running an ad that drives high-value users to your app but itself sees low traffic, or has a low CTR, you can change the ad design, language, call to action, or other ad elements in order to bring higher volumes and quality to your app.
Because CTR reflects user engagement and interest, the higher the CTR the better. High CTR then ties into an ad’s quality and relevance scores as the main factor in determining each. For Google AdWords and other search marketing platforms, higher CTRs mean greater relevance and usefulness to your users, which directly influence the prices marketers pay per ad serve.
What are the limitations of CTR?
It's important to understand that within the context of a complete assessment of campaign success, CTR is ultimately a “vanity metric” that ranks low on the hierarchy of performance-driven parameters available for measurement, and should not be given heavy weight when optimizing campaigns.
Overall, CTR is just one piece of a full-picture understanding of the user funnel. Combined with more substantial performance metrics like installs or purchases, it allows networks and marketers alike to boost user acquisition, optimize performance marketing tactics, and be more strategic with marketing budgets looking forward.
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