What is CTR & its Calculation

We are going to discuss CTR, which is click through rate. So in Google Ads click through rate, and the concepts behind click through rate are very important. So we are going to discuss something around the click through rate. And the main agenda or the topics which are there in this particular blog is what is click through rate. So we'll be starting with a basic definition of what is click through rate.

What is CTR?, what is Google CTR?  And then industry wise, average CTR

what CTR, we can say that it's a good Ctr. Right? So we'll be discussing these things. Right? So let's begin. And first of all before understanding CTR, what is CTR? And what is the importance of CTR? And what are the Ctr average industry benchmarks. First of all, we have to understand two very important things, right? Which are like impressions. The first one is impressions, and the second one is clicks. So we have to understand what is the impression and what is click, we have to understand, right

 What is your impression? 

 There is a user who is making a query on Google. Suppose I'm making a query on Google to buy online. As soon as I'm making some queries over here on Google, what I will say is, I'll say Google's search engine result page, and I'll be seeing different results over here, right? These results will be the combination of the organic results as well as the paid results, right. So I'll be seeing some ads over here, like I have seen this ad number one over here. And this ad number two over here. And then I saw ad number three over here. So these are ad one, two, and three, respectively. Then I'm seeing some ads over here also to some, some search ads over here, also, which are like four and five, to suppose I am the user over here who was searching for buy online shoes. And as soon as I'm looking to buy online shoes, as soon as I've entered this term, buy online shoes, what I'm going to say is there will be a lot of results, right? Some were paid, and some were organic. So right now, as we are talking about Google ads, we'll be ignoring the organic results, we will not be focusing on organic results. And our main focus will be towards these paid results only. So now, now when I'm seeing this ad number one, and number two, and ad number three over here, right? And if I'm going to this odd number two, and I'm clicking this add number two over here, right? So I'm clicking over here, fine. So now what happens over here is, all these odds, all these ads, the ad number 123, and four, all these ads, got impressions. But there was only one ad, which actually got clicked, right? The ad number two got clicked, but other ads got only impressions.

So what we can say over here is impressions, right? impressions, were there for ad number 12345. Right? And no clicks? Right? These are basically these ads that didn't get any clicks. We have to remove two from here because two got a click right. But only 134 and five got impressions and no clicks, right? So there were no clicks in this case, but only on number two, got one impression and clicked All right. And what about these all ads they got if we segregated them with respect to impression and clicks. So the ad number one to number 134 and 5111 impressions each 00 clicks, whereas the ad number two got one impression and one click. So this is basically the basic difference between impressions and clicks. So that is what returns over here an impression is a view when your ad loads and displays in front of a user that is one impression right? No matter whether that ad is such an ad or that ad is a display ad it actually does not matter. The only thing that matters is if your ad is there in front of the user that is basically counted as an impression right.

 what are clicks

The name justifies a click simply enough is whenever a user actually clicks on your ad, the thing which we actually imagined over here with respect to AD number two, that okay the ad number two got one impression also and then ad number two, what a click All right.

What is CTR

Now we will be talking about CTR . So first of all, let us discuss about the basic definition, the theoretical definition of CTR and then we will be moving to the mathematical equation explanation of CTR so this number is the percentage so CTR, CTR is let me explain you the click through rate it is click through rate, the full form of CTR is click through rate and what you have to make sure is whenever you see rate anywhere in any metric, it is basically a representation of percentage to whatever you are seeing as rate is basically a percentage, right? So this number is the person.

For example, if it is the Ctrr, the Ctr is 5% , which means that I'm talking about five percent. If the Ctr is 6% , which means that I'm talking about 6% percentage, if the Ctr is 2% , which means that I am talking about 2%. So this number is the percentage of the people who will see your ad, right? The number of people who will do your ad, and then actually go on to the clicking ads, right? So actually go on making the clicks, right. So this is basically the ratio supposed. Let me give you an example. Suppose there were 100 people who actually viewed our ads. So there were 100 impressions. And after those impressions, after those 100 impressions, there is very less possibility, or it is almost zero possibility that all the impressions will result in two clicks. I mean, if my ad is getting 100 impressions, there is no possibility that I'll be getting 100 clicks also, right. So for example, if there are 100 impressions, and there are only 50 clicks, that too, is very high, right? That too, is very high, which means that the Ctr over here will be 50%. Right? If there are 100 impressions on there for like 20 clicks, then, which means that there will be 20 percent of CTR, the Ctr is 20%. The click through rate is 20%. So this is the basic definition of Ctr.

Mathematical equation of CTR

Mathematical equation of CTR:

CTR=Total click on Ads / Total impressions x 100

Now if we come to the mathematical representation of CTR, how it actually looks like a formula, right? So if we want to calculate, how can we actually calculate? So CTR is basically the percentage. So I'll be putting a percentage over here. And this 100 when I'm multiplying anything by 100, which means that I'm converting it into a percentage. Now suppose if we if we convert it into numbers, if we put some numbers over here, like total clicks on ad, and total impressions, so suppose this one was my ad, this one was my ad, the ad number two, that we we made in the last PPT now I'm creating it once again, over here, there is ad number one, there is ad number two, there is ad number three, and then there are two ads at the bottom of the page. And then there are three ads at the top of the page.

So suppose if my ad is this ad number two, and on different keywords like keyword one, keyword two, and keyword three, right? My ad is getting impressions, right? This ad number two is getting impressions. And I got somewhere around, let's say 100 impressions, I got 100 impressions. And out of those 100 impressions, I got a click, let's say I got 10 clicks, fine, I got 10 clicks. Now I'll put these numbers, these imaginary This is just there to suppose right? These numbers are not real, the 100 impressions and the 10 clicks. This is just to explain, you know, the total clicks, which are made on my ad are 10, or the total impressions, which were 100. And this is basically the click through rate. And when I say rate, which means that I'm calculating the percentage, so I have to multiply it with 100. And I have to put my percentage mark over here, right? So we do not have to go into the mathematical calculations. I'm just trying to explain the concept behind Ctr. So that is why I'm giving you some basic calculations overhead, it's not mathematical on the platform, you aren't going to see it there by default, you do not have to do it. Mathematically, this metric is there in your Google Ads platform, and you just have to find it out. And you have to see that Okay, now my ad is getting this much of CTR, or my campaign is getting this much of average Ctr. That is the only thing that you have to see over there. And you do not have to measure or do not have to calculate the way I'm doing it right. So the example that I've taken is like 10 clicks and 100 impressions and for the percentage, we are going to multiply it with 100. So this time it will become 10%. So the Ctr is 10 percent, which means that for every 100 impressions that my ad is making, I'm getting 10 clicks, for every 10 impressions my ad is making, I'm getting one click. So this is basically the Ctr the click through rate. 

What is a good CTR or click through rate?

So now the click through rate should be positive, or should be negative. I mean to say that if your click through rate is increasing, is it a good signal for you? Or if your click through rate is decreasing? Is it a good signal for you? Definitely, if our click through rate is increasing, it's a good signal for me, which means that our click through rate is a positive metric and we should work on increasing our click through rate right? We want that if this particular ad, the ad number two got 100 impressions, we do not want only 10 clicks, we want to increase these clicks. Why? Because see if this 100 impressions remains constant over here, and I got 10 clicks and let's compare it with another thing. I got 20 clicks.

With respect to 100 impressions, let's convert it into percentage, so this will become 20 percent, it will cancel out right and other things it will cancel out will become 10 percent. Right. So, is this a good option for us? Is this a good result for us? Or is this a good result for us? This one is a good result for us. So an increase in CTR is a good signal for us or decrease in a CTR is a good signal for us. We should put things together in such a way that they basically increase our city or we should put our efforts in such a way that they basically increase our CTR or we should put our efforts in a way that it should decrease our Ctr. So guys, we must put some effort into increasing our CTR as it is a positive metric. So this is the mathematical calculation behind Ctr. So there might be different cases, right? Every time. It's not like that you will be getting 10% of CTR, you will be getting 5% of CTR, you will be getting 7% of CTR right? So what is the perfect CTR? What should we aim for? What is the benchmark over there? What should we try for? Right? Is there any benchmark? Is there any benchmark which is defined with respect to CTR that okay, this is a good CTR, when we say suppose if we are talking about class 10 students, right? And if there are two students and one student got like 75%, the other one got 80%. Right. So we have some benchmarks over there. Like if anyone is getting more than 60%, which means that he or she is average at reading or writing. If anyone is getting more than 90% more than 90%, which means that he is a good student, he is a good spread, which means that the benchmarks are there. Now when we talk about the Ctr, when we say the click through rate, there might be the case that we will be getting 5% of CTR, we'll be getting six percent of CTR, we'll be getting two percent of CTR 1% of Ctr. So which one is a good CTR? What should we aim for? And what is the appropriate CTR where we should take yourself right? So now this CTR basically depends on the different industries that you are working for the different niches that you are working for. It does not remain scottville I mean, no one can say that. Okay, 2% if you are getting 2% of CTR, it's a good thing. If you are getting 5% of CTR is a good thing. It actually depends on the type of the ad also like if you are running search ad, there is some different kind of benchmark the average benchmark with respect to the industries like in automotive mobile industry, the Ctr can be somewhere around 3% or 4%. It is considered as a good CTR if you are in money making industry if you are in digital marketing industry and you are running some ad and if you are getting 5% of CTR or 8% of CTR, then it is considered as a good Ctr. So there are basically there are standards, there are standards, but they are industry wise. Right. So and also there are standard, according to that type, right? So the standard of search ad or the back benchmark of the search ad will be totally different from the benchmark of display ad, right. But my point so now a good Google Ads click through rate is four to 5%. day now this is one is for search. That is what return we're here. A good Google Ads click through rate is somewhere around 5%. So if you are getting 5% of CTR it's good thing, right? It's overall it's a good thing on the Search Network. But on display net worth it is basically somewhere around 1%. So if you are getting 1% 1% on display network, you are running display ads, that is what we discussed in the first video, that there are search ads also. And then there are display ads also. So if you are running display ads, and you are aiming for four to 5% of CTR that is almost not possible, right? Because on the display network, we have seen that because you are basically forcing people to see your ad. So the Ctr is generally quite low when you compare it with the Search Network, right? In such networks, the concept is like inbound marketing and in Display Network. It's like outbound marketing where you are reaching to your prospects or reaching to your customers and you're targeting them right they are not coming to you, you are going to them. So when you are going to them there are less chances that they will click on your ad. But when they are coming to you and they are looking for the services or the products that you provide, there are high chances that they are going to click on your ad right so this is the difference between the Ctr on Search Network, and the Ctr on display network. So definitely CTR on Search Network will be higher with respect to our when we Compare it with CTR of Display Network, right? Because of the intent, right? The intent of searchers on the Search Network is, I mean, it's more inclined towards your product or services, or they are coming after your product or services they are actually looking for there is high intent, which basically makes the Ctr the average Ctr. Higher overhead. Right? So this is the concept behind what is a good Ctr. 

Understanding average CTR - Search ctr or Display ctr

Now, if we talk about the average CTR industry, you can see the average CTR industry wise is given over here on both the network which is Search Network, and other one is display network. So we can see we can figure out something over here like education right? In the education industry, the average search CTR is somewhere around four percent, let's make it a round figure somewhere around 4% percentage. And it is somewhere around the 6% percentage that Display Network CTR, right? So if we average it out, right, if we average it out this thing, the average CTR, if we if we are going to average this out, this will be coming to somewhere around four to five percent, which is that average CTR of the Search Network. And this one is the average of all the industries, right? But my point, so the Ctr varies from industry to industry. And let's pick up the lowest CTR, which is like 2.4 over here. 2.4 over here. Let's pick up the average sit lower CTR over here, which is 2.09 right this one the technology, the technology industry is having low CTR in such network with respect to such network. So if you are running ads, with technology from the technology industry, you might not get those kinds of results right. Or you might not get crazy CTR, you might not get good CTR because average every CTR of the technology industry on Search Network is not that not pretty good. Right? It is less than the average, right? So average CTR if we talk about the average CTR of Search Network, overall Search Network of all the industries is four to five percent and you are only getting 2% aging technology technology stream or technology industry which makes it as like half of that half just half of what your average CTR is right. Similarly, over here also it is like point three, nine right and let's see if there is any other lower value No it is not there, right. So you on both the networks on social network, also an on display network also, the ads that you are running in technology category are not getting that much of attention, right. And when I say they are not getting that much attention, which means that the Ctr, the Ctr is not very good over there. Right? So now that's it for this topic. Ctr. Right? What is CTR and what is the average CTR, how do we calculate CTR? And why why CTR is important and do we do we need to really care about CTR Yes, we need to really care about Syria because increasing the Ctr indicates that yes, people are loving our ads or people are basically clicking on our ads which means that which which indicates that Okay, our ad or whatever the campaigns we are setting are relevant to the searchers query right if they are relevant to the searches per query, then only we will be getting desired fit Yeah, so that's it for this particular blog. See in the next blog till then, goodbye.