Click-Through Rate (CTR): What Is It & How to Calculate

by The MNTN Team

4 Min Read

The beauty of digital marketing lies in the fact that you can measure just about everything about it. Among the most important marketing metrics to keep an eye on is your click-through rate (CTR), which gives you valuable insight into how well your ads are engaging your audience.

Here’s a closer look at what this particular performance marketing indicator is all about, including why it matters and how you can calculate it.

What Is a Click-Through Rate (CTR)?

Your click-through rate measures the percentage of people who click on your ad after seeing it. It represents a way to determine how compelling your ads and calls-to-action (CTAs) are to your audience.

Importance of Click-Through Rate

Click-through rates indicate how engaging ads are. A high CTR can lead to better ad placements and lower campaign costs. Platforms like Google Ads and many social media networks tend to reward high-performing ads with lower CPCs.

Your CTR can help you gauge the relevance of your ad to your audience. A higher CTR indicates that you are doing a great job of grabbing the audience’s attention and persuading them to learn more, while a low CTR suggests that you need to tweak your messaging, creativity, or both.

If very few people are clicking on your content, it could mean that your targeting is off. By monitoring and improving your CTR, you can make sure your content gets the right kind of attention.

How to Calculate Click-Through Rate

All you need to calculate your CTR is the number of times your ad was viewed (also known as the ad’s impressions) and the number of clicks it received.

CTR Formula

CTR = (Total Clicks / Total Impressions) x 100

An Example of How It’s Used

Let’s say you’re running a programmatic advertising campaign for a new product. After your ad runs, you check its metrics and see that it earned 20,000 impressions and received 800 clicks. Using the formula above, you’d calculate your CTR as follows:

CTR = (800 / 20,000) x 100 = 4%

A 4% CTR is a good indicator that your ads are resonating with your audience. However, if you want to push that number higher, you can implement strategies to boost engagement.

What Is a Good Click-Through Rate?

What qualifies as a “good” CTR will vary depending on your industry, the platform you are using, and the ad format. The average CTR for all search and display ads hovers at around 1.9%. Search ads, which appear at the top of a search engine results page (SERP), have an average CTR of just over 3%, and display ads only earn clicks about 0.46% of the time.

Your goal should be to match or beat the average rates for your industry.

Strategies to Improve Click-Through Rate

Here are some tips to boost your click-through rate:

Craft Compelling Headlines: Make your headlines eye-catching to entice users to click
Use Strong CTAs: Use phrases like “Learn More” to prompt users to take action
Create High-Quality Visuals: Use high-quality visuals that are relevant and engaging
Refine Your Targeting: Ensure your ads are being shown to the right audience
Test Different Formats: Experiment with different formats and creatives to find out what resonates with your audience
Increase Brand Awareness: Use a CTV platform that can help you boost brand awareness and drive consumer engagement across all channels

On that last point, it’s vital to make your brand instantly recognizable. If users are already accustomed to your logo and brand name, they may view your display and search ads as more trustworthy and legitimate.

That’s where MNTN Performance TV can help. Our platform includes robust targeting capabilities, allowing you to serve up personalized content that raises brand awareness and makes you more recognizable to consumers.

Click-Through Rate (CTR): Final Thoughts

Click-through rates play a key role in measuring the success of digital ads. By tracking and optimizing your CTR, you can better understand how well your ads are connecting with your audience and work to drive more clicks in the process.

Learn more about CTV advertising and OTT advertising to see how MNTN can help you achieve your business goals.