Click-through rates are some essential performance metrics for online marketing and lead generation. When you write an ad copy or a sales email, you use click-through rates, or CTR, to measure their effectiveness. 

Learning more about CTR will help any business improve everything from outreach to customer retention. It’s a fantastic way to examine how you’re spending money on marketing or fulfillment, and you can use testing to continually refine how you present your brand, products, or other communications.

Here’s what you need to know about CTR in 2023 and ways you can start using it to build better products and services for your customers.

The CTR Basics

There’s an art to marketing and sales, but tracking metrics and analyzing data will support your efforts more than you know.

Companies and marketers use CTR to gauge how well everything works, from social media ads to search results. For example, a major component of organic SEO is knowing how often people see your page on the first page of their search results (SERP) and click through.

Generally, pages ranked higher on Google, and other popular search engines have higher CTR rates, underscoring the importance of SEO and digital marketing efforts.

Marketers use pay-per-click (PPC) ads to measure how many clicks ads receive per number of impressions. The higher your CTR, the more effective your PPC campaigns will be because you’ll spend less on ads and increase conversions.

CTR is also very valuable when talking about email campaigns. Email is still a very powerful tool business and other organizations use to tell people about new products, promotions, and other services.

But how do you know how your email is received? Are people not opening the email? Or are they opening it and still not buying because of the wording or strength of your offer?

CTR opens the door for businesses to take a deeper look at how they communicate with clients.

With CTR, you can examine the following:

  • How many links you have (link count)
  • Where the links are (link location)
  • Subject lines
  • Frequency of engagement
  • The length of copy (emails, ads, etc.)
  • The tone of the copy (professional vs. playful etc.)
  • Media content (whether to include pics, videos, or banners)

When you send an email or run PPC ads, looking at the CTR after the fact lets you know how many people opened the mail or clicked on the ad. Then, you can adjust to find your marketing sweet spot based on your clientele and products or services.

Calculating CTR

Using a basic formula, you can understand how many people are opening your emails or clicking your links. Here’s how to calculate CTR.

You must divide the number of clicks by the total number of impressions. So, for instance, if you send 100 emails and ten people open them, you have a 10 percent CTR. If you post an Instagram ad that gets 5,000 views and 100 people click the ad, then your CTR is 5 percent.

CTR = Clicks/Impressions x 100

What Is a Good Click-Through Rate?

What’s a good CTR? Good rates depend on the type of interaction and your industry. For example, your existing customers are much more likely to click on a link or an email from you compared to a new lead. Likewise, fans of your Facebook page are likelier to click on a link you post than people who’ve never been to your page.

In addition, certain industries have higher CTRs. People in finance receive many more cold emails from banks, brokerages, lenders, etc., so they’re more likely to delete the email or messages unless the writing and offer are on point.

Other businesses, like food or entertainment services, typically get higher CTRs because they target customers with stated interests. Whether it’s a membership in a social media group or liking competitor posts, companies can focus on specific audiences to increase CTR.

CTR is essential because platforms like Google, Facebook, and Instagram measure the quality of ads based on how often people click through. These companies want suitable ads that people enjoy and respond positively to. They use CTR as part of their quality scores, which impacts the position of ads on a page.

Here are some things that will improve your CTR on PPC campaigns:

  • Using strong keywords
  • Mirroring language on ads and landing pages
  • Targeting specific audiences
  • Managing PPC costs effectively

How to Track CTR

Email services like Gmail allow you to use read receipts. This lets you know when someone clicks on your email and reads it for however long.

When you send an email, and it’s not read, that is called a “bounce,” i.e., it bounced out of their inbox either into their spam folder or the trash. Bounce rate is the rate at which your emails aren’t read. It’s essentially the opposite of your CTR.

Adding read receipts to your email gives you access to data that tells you what percentage of emails your customers or prospective clients are opening.

Once you start tracking with read receipts and get comfortable with the analytics, you can add tracked links to your content.

These links tell you whether someone who opens the email clicks on the link and goes to your site or landing page.

Once you have the data, it’s time to refine the emails you send for a better return on investment for marketing and sales.

Aside from email, most PPC platforms offer analytics that includes CTR and other metrics that help marketers and businesses know how effective their campaigns are. Customers can use the CTR data to understand how to place ads effectively and how much they typically must pay to get someone to click through.

Using A/B Testing with CTR

As with most things, it’s not about the data but how you use it. With A/B testing, you can build better email campaigns, promotional offers, social media ads, and other tools to promote your brand.

A/B testing is a rather simple tool marketers use to refine their campaigns. You start with two offers or email scripts, then see which one gives you a better CTR. Then, you stick with the one that works and use another one to refine your efforts continuously.

For example, if you send out two emails to your customers, and one of them has a six percent CTR while four percent of recipients open the other, then you’ll likely want to stick with the tone, format, and wording of the first email.

The same goes for PPC ads. Marketing teams often post two ads with different copy promoting the same product or service and track which one your customers respond to more positively. Then, they reiterate over and over again to improve CTR continually.

Ideally, you’ll make the first iterations of A/B testing for email, sales scripts, and other social media marketing campaigns fairly stark so that the results will lead you in the right direction.

CTR versus Conversion Rates

Most businesses focus a lot of energy on conversion rates. This is because they know in detail how many times they must send out an offer to generate X amount of sales or customer inquiries. Converting customers make businesses money, so it’s understandable why it’s such an important figure for most companies.

Understanding how CTR improves conversion rates will save you money and time. Essentially, you’re moving higher up the sales chain to make the initial offer more compelling. That means fewer interactions until sales and less money spent on social media ads.

Why CTR Matters

Measuring and, more importantly, refining CTR will result in higher conversion rates. You’ll attract higher-quality leads and engage with your customers on a deeper level. Working on CTR is a fantastic way to create good content that people love, which makes them more likely to click links, respond to offers, and buy your products.