Calculating CTR: how to calculate it and why it's important

By Indeed Editorial Team

Published 13 July 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Click-through rate (CTR) is a digital marketing term that various professionals use, from individual bloggers to big businesses, to understand the impact of their digital marketing content. Every link, website and piece of advertising content has an associated CTR that authors of the material can use to see how successful their published content is. Understanding CTR and its uses can help you be more effective in your marketing efforts and generate greater levels of engagement. In this article, we define CTR, discuss its benchmarks, explain its importance and provide a formula for calculating CTR.

Formula for calculating CTR

The formula for calculating CTR is:

CTR = (total measured clicks / total measured impressions) x 100

Where:

• You convert the click-through rate as a percentage.

• The total measured clicks include the number of users who clicked on the link and followed it to its webpage.

• The total measured impressions are the number of users who viewed the webpage with the link or advertisement.

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What is CTR?

CTR describes the number of times a user clicks on a business's published online material, typically an advertisement or link, and the link takes the user to a new web page. CTR can tell marketers how many people go from one webpage to another via a link in an advertisement. This can provide publishers with information about the effectiveness of adverts and their placements, which allows them to make sensible changes to improve efficiency and generate more interest from their audiences.

Marketers primarily use CTR to analyse user engagement levels. It usually comes as a percentage that shows the number of people who clicked through compared to those who viewed the page and left. This is a highly valuable metric for business owners and marketing professionals, as it reveals whether the marketing campaigns work or require changes to effectively promote action. A high CTR is good, as it shows an ad is generating interest and encouraging desirable action. If it's low, this suggests the ad may require adjustments to raise the rate.

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CTR benchmarks

Different businesses consider different CTRs to be positive because each industry has its own benchmark for this indicator. Depending on your industry and the kind of media you use, such as websites, emails and ads, there may be a specific CTR that it's beneficial to aim for. You can learn more about the benchmark that applies to your position by doing online research. Once you understand your benchmark, compare it with the CTR of your content to see how effective it is.

Because so many businesses advertise through websites and search engines, they can over-saturate the space and cause people to ignore ads, resulting in a low CTR, such as two users per 1,000 views, or 0.2%. This is why it's important for businesses to not only understand CTR but to learn how to improve it to impact more users in positive ways. Understanding what causes people to follow links helps businesses focus on the most successful advertising techniques.

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Ways to improve CTR

Understanding the CTR of marketing materials can offer powerful insight into what customers like to see and what generates engagement from them, though it isn't the only metric for measuring success. Once online marketers understand their CTRs, they can implement changes to improve them, such as:

• Including a strong call to action: Having a strong call to action can increase the likelihood of a customer clicking through to another page. Consider using terms like sign up today, click here and buy now to encourage customers to take action.

• Changing design features: Altering page designs can also generate more interest from visitors, and designers can implement tactics from fields like colour psychology. You can try using a red action button, for example, as users are more likely to notice the colour red.

• Testing the content: It's important to conduct tests, such as A/B testing, to understand exactly what causes the success or failure of the content. You can do this by making changes to ad copy, word counts, font design and the placement of the links and ads.

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Benefits of tracking CTR

Understanding this key performance indicator enables online advertisers to determine the effectiveness of their marketing campaigns, which in turn allows them to make improvements. Businesses often run various kinds of campaigns simultaneously, using emails, display ads, paid searches and webpages, so it's important for them to track and understand the performance of each. Once they collect this data, they can see which campaigns are most effective and which they can dispense with or edit to improve them.

Another benefit of tracking CTR is to gauge the performance of:

• brand interest

• media type

• email content

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How to calculate CTR

The first step in calculating CTR is collecting tracking data through your website or an analytics platform. It's possible to calculate the CTR yourself, or you can use a CTR calculator tool, which you can find online. To calculate it manually, follow these steps:

1. Put your data into the CTR formula

Imagine you have a link on a webpage that has generated 500 clicks in total, and you measured 100,000 views in total. You can make a mathematical equation by putting this information into the CTR formula. For example:

CTR = (total measured clicks / total measured impressions) x 100

CTR = (500 / 100,000) x 100

2. Divide the measured clicks by the measured impressions

Once the formula reflects your data, you can look to the parentheses to start solving it. First, divide 500 by 100,000. This gives a total of 0.005, as demonstrated below:

CTR = (500 / 100,000) x 100

CTR = (0.005) x 100

3. Multiply the decimal by 100

Following this, take the number within the parentheses and multiply it by 100. This enables you to represent the decimal as a percentage:

CTR = (0.005) x 100

CTR = 0.5%

4. Analyse the percentage

You can now see that the website's banner ad has a CTR of 0.5%. This means that for every 1,000 website visitors, 5 of them click the banner ad and go to the new page. To understand whether this is a good or poor CTR, compare it to the standard CTR for similar content within your industry.

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CTR example

Here's an example of how to calculate CTR:

A realtor runs an email marketing campaign and sends a number of messages, which some are likely to return as undeliverable. They send 55,000 emails to their client base. The number of undeliverable messages is 5,000, while 1,500 clients click the link in the email. This then takes the clients to the realtor's website, where they can see local homes that are for sale. Here's how the realtor calculates their CTR:

Use the formula

First, the realtor calculates the total number of measured impressions, as they already know the total number of clicks equals 150. They know that the number of undelivered messages was 5,000, so to find the total number of measured email impressions, they subtract 5,000 from 55,000, leaving 50,000. Here's how the number fits into the formula:

Divide

Next, the realtor divides 150 by 50,000 to get 0.003:

CTR = (150 / 50,000) x 100

CTR = (0.003) x 100

Multiply

Then, the realtor converts the decimal answer into a percentage by multiplying it by 100:

CTR = (0.003) x 100

CTR = 0.3%

Analyse

Finally, the realtor calculates the email campaign's CTR as 0.3%, meaning that three out of every 1,000 users clicked the link in the email. By comparing this to the average CTR for similar email campaigns in the real estate industry, the realtor can decide whether they think it's performing well or underperforming.