Click-Through Rate (CTR) is a fundamental metric in digital marketing that is used to measure the effectiveness of an ad, link or online content. It is expressed as a percentage and represents the proportion of clicks a link or ad receives in relation to the total number of impressions or views it has had.
The basic formula for calculating CTR is simple: divide the number of clicks by the number of impressions and then multiply the result by 100 to get the percentage. For example, if an ad is shown 1000 times and receives 50 clicks, the CTR would be 5% (50 clicks / 1000 impressions x 100).
CTR is a critical metric because it reflects the level of interest and relevance an ad or link has for the audience. A high CTR indicates that the content is engaging and is generating a good number of clicks compared to its exposure. On the other hand, a low CTR may suggest that the content is not relevant or engaging enough for the audience.
In the context of online advertising, a high CTR can be indicative that the ad is relevant to the specific keywords or interests of the target audience. This can result in higher quality traffic and, in some cases, a lower cost per click (CPC), as the algorithms of advertising platforms such as Google Ads often reward relevant ads with better placement and lower costs.
Digital marketers use CTR to evaluate the performance of their campaigns, adjust strategies and optimize content and ad design. Simply put, Click-Through Rate is an essential metric for measuring the success of digital marketing initiatives and ensuring that content reaches the right audience.
The Sales Glossary is a compendium of all the most commonly used terminology in sales strategy. Many of the concepts listed here are used when implementing a CRM system or a digital sales funnel, no matter if they are legacy systems or an online CRM. See also our blog that deals with sales techniques, marketing and sales culture.