The importance of CTR in e-commerce

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CTR, or click-through rate, is the ratio of the number of users who clicked on a link to the total number of users who saw it. In marketing, it is used to determine the attractiveness of an advertisement. You can calculate the CTR (click-through rate) using the formula (A/B) * 100%. A is the number of clicks on your ad, B is the number of times it was shown. The higher the CTR, the lower the cost per click on your ad.
What is the ideal CTR? There are no strict numerical criteria for this parameter, as every situation is different. Many factors influence this parameter, so there is no ideal CTR.

With the help of the experts at Oise Trade company, we have understood the nuances of calculating and analysing this indicator.
What affects CTR
The type of ad campaign. Search engines display ads in response to a user's query. In this case, the CTR will be higher because the ad will be seen by people who are looking for a solution to their problem. And your product or service can help them. Google ads have a higher CTR than other tools. Push and teaser ads have the lowest CTR.

Accuracy of ad targeting settings. Effectiveness depends on how accurately you set the target audience for the ad. This includes gender, age, geography and other indicators.

Ad design and content. The headline, image and text. They should attract the user and motivate them to take an action - a click.

Brand awareness. If the company is well-known in the market, its ad will be clicked on more often. If you are a newcomer, you can attract a customer with a more attractive ad than the market leader.

The business niche and the level of competition in it. If you sell smartphones, the CTR will be low because there is a lot of competition in this niche. At the same time, an ad selling construction cranes will get a higher click-through rate because there is less competition in the niche.

If the cost of the goods or services is low, a person is likely to click on the first ad they see and place an order. If the cost is high (e.g. an apartment or a car), the user will first look at all the offers on the market. The same ad may therefore be shown several times. The CTR will be lower than for businesses with low value goods or services.
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How to analyse CTR
CTR is an important indicator that helps to determine the effectiveness of ads and choose the best option. But the final decision should be made after a comprehensive analysis, taking into account the conversion rate (CR) of each ad.

If you only look at the CTR and ignore the end goal, you may mistakenly abandon effective ads. For example, one ad may have received 10 clicks from 100 impressions, while another may have received 50 clicks from the same number of impressions. However, from 10 visitors to the site, you got 5 sales and from 50, only 2 sales. The end result (conversion) will be more effective for the first ad.

The higher the CTR, the more people click through to the landing page. However, a high CTR does not always guarantee a high conversion rate. Why is this? Ads with beautiful images or promising copy often get a high CTR. The CTR shows how interested users are in what you have to offer. If we attract non-targeted users with our ads, they won't buy anything.
CTR and CR ratio options
  • High CTR and high CR is the ideal option that everyone strives for. In this case you will get cheap leads/applications/sales.
  • Low click through and low conversion is the worst option. Such ads should be switched off immediately. The cost of the end result will be too high.
  • With high CTR and low CR, or vice versa, the cost of the application will fluctuate. Although these options seem positive, there are pitfalls. If click-through is high and conversion is low, the cost of a lead/application/sale may be more or less acceptable. But if the CTR drops, the cost will immediately increase. Similarly, if conversion is high and click-through is low and the first indicator drops, the cost of applications will also rise.
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You should not just chase the CTR. Conversion rate should be at the top of the list. If it is low, it means that you are doing something wrong: you did not guess the target audience, you used the wrong message in your ad, it was badly designed, etc.

If you can't solve the situation and correct your mistakes yourself, it's time to call in the professionals. Oise Trade Poland specialists will evaluate your company's communication with the target audience, find promising ideas and ways to implement them.
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