What is Click-Through Rate (CTR)?
Click-through rate (CTR) is a metric used in online advertising to measure the ratio of clicks on an ad to the number of times the ad was shown (impressions), expressed as a percentage. It indicates how effectively an ad generates clicks and engages its audience.
Example
For example, let’s say an online advertisement for a new smartphone was displayed 1,000 times (impressions), and 50 people clicked on the ad. The click-through rate would be calculated as:
CTR = (Number of Clicks / Number of Impressions) * 100
CTR = (50 / 1000) * 100
CTR = 5%
So, the click-through rate for the ad is 5%. This means that 5% of the people who saw the ad clicked on it. A higher CTR typically indicates that the ad is relevant and compelling to the audience, while a lower CTR may suggest that the ad needs improvement or targeting adjustments.