Multicultural Blog

Online Advertising Terms: What Is A Good CTR?

Although CTR (Click Through Rate) is one of the most common standards for evaluating the performance of online advertising campaigns, many people still don't have clear understanding of what a good CTR is. Indeed, there is no simple answer for that, and the valuation of a good CTR varies on different targets, channels, ad formats, and other involved factors. Besides, CTR is just one criteria to evaluate the campaign performance, there are other important indicators to look through in order to see the whole picture of the online advertising campaigns.

What is CTR?

To go deeper on this topic, first of all you need to understand what CTR actually is. In general, CTR is the percentage of clicks that generated from a number of impressions, serving as an indicator of how relevant an Ad is to targeted audiences or searchers. For instance, if the ad (no matter if it is search ad, display ad, or video ad) are viewed by 1000 times, while 20 people clicked on the ad, then the CTR would be 2%. Some people might simply think the higher CTR you get, the better the campaign performs. This can be correct in most occasions, since it reflects that more people get attracted by the product or service on the Ad and have interests to know more about them. However, the performance of campaign shouldn't be judged only by the appearance of CTR since many factors influence the click behavior of target audiences. Click-Through-rate

What are the major factors that influence the CTR?

To dig this issue even deeper and get a clear and objective understanding towards CTRs, it is important to analyze the major factors that may influence the result. factors-influence-click-through-rate

First, differences media channels would lead to different results in terms of CTRs.

We know that there are a few popular and emerging media channels on the advertising market, including Display, Search, Mobile, Video, Social media and other channels. Generally, search channels usually have higher CTRs than display channels. It is not difficult to understand since these audiences that using search engines looking for certain information, understand their interests and needs, and have higher possibility to click the search results. When it comes to Search campaign itself, there are several factors that affecting the CTR percentage, such as keyword selection, brand, keyword matching, etc. In short, usually branding search campaign would achieve better CTRs than non-branding ones; launching search campaigns on long tail keywords usually has higher CTRs than generic keywords, even though it would limit the scale of reach. Display ads, on the other hand, focus more on reaching new audiences and better branding, while the audiences receive the display ads passively, therefore in most cases, impressions should be a more important metric instead of CTRs for Display campaign. Usually advertisers should see a CTR of 0.05% or above for a site targeting display campaign, while the actual CTR numbers varies in different countries and different seasons as well. For social media, Facebook, Tweeter and Linkedin are the leading players in this market, especially in terms of online advertising. Although these social media sites have decent volume in traffic and enable to target audiences with different categories and terms, CTRs on these social media sites are relatively low compared with other media channels, around 0.02%- 0.04% on average for Facebook and 0.025% on Linkedin for example. Therefore, it is important for marketers to realize their goals first before choosing certain media channels to distribute their Ads. Aiming for reaching more audiences? Or primary goal is measured in clicks or conversions? If advertisers can think this through before choose any media channel to distribute their ads, they would know what indicator they should use to measure the campaign performance instead of counting on CTR in all occasions.

Second, the quality of Ad creative is another key factor to determinate the CTR level.

It is straightforward to understand that audiences do have higher possibility to click when the ads look nice. Although everyone judges the ads subjectively, the design, shape, background color, size, font, and message of Ad creative do influence audiences' decision to click on a banner or not. In brief, if the ad creative is valid and draw attention of its targeted audiences, then the CTR would tend to be relatively higher. The creative type also has an impact on the CTR. Usually flash, animated and rich media ads have better CTRs than standard ad banners. To be mentioned here, not all the online ads are designed to generate high CTR, for example branding-oriented ads aim to raise more brand awareness, which doesn't mean necessarily to be clicked. Moreover, in order to gain a high CTR for online advertising campaigns, it is important to make sure the ads are well written and appealing to targeted audiences. In addition, advertisers should make sure the content of ad creative matching with site contents and audiences' interests. If the content of display ads can be triggered by audiences' browsing history (ex. retargeting ads), then the CTR would usually be higher since the ads are more relevant to each audience. Furthermore, Ad unit sizes also affect audiences' behavior of clicks. The general rule is that the bigger ad unit size, the better CTR it could achieve, since the larger ad unit are more visible and contain more useful information than the small ads. However, if the ads are so large that could disturb the audiences and make them feel annoyed, then it is not worth to try. The popular Ad unit sizes include 300*250, 728*90, 160*600, etc.

Third, Ad placement can be a tricky factor to influence the CTR as well.

Another important factor to determine the click through rates is ad placement. The position of an Ad unit makes a great difference in whether audiences can easily see the ads. Usually Ad placements "above the fold" have higher chances to generate a high CTR since it is more visible and enables audiences see the ads without scrolling down the webpages. However, recent research also show that most advertisers might underestimate the performance of "below the fold" ad placements. Therefore, the best way is to test them yourself and see which ones work better.

Last, the CTRs can be different due to the variance of target audiences.

Different target audiences might have different preference and attitude towards online ads, which affect the CTRs initially, regardless of other factors. From the following online Ad CTRs by countries (DoubleClick for Advertisers, 2010), we can see the variance of different countries. For example, Asian people click much more than Finish people in nature. global-CTR

Top tips to achieve better CTRs on online advertising campaigns

After discussing about the factors that influences the CTRs, now we would like to give you some top tips to improve the CTRs of online advertising campaigns. When designing the creative, instead of using full of graphics and colors, it could be an advantage to use more texts in the banners, explaining the value proposition to improve the click through rate. To be mentioned, it might be not a good idea to add the price information on the banners since it might reduce the click-through. Moreover, when launching online advertising campaigns, free services or discounts would normally generate higher click-through-rates. Last, compared with CTRs, maybe conversion rate deserves more attention from the advertisers, since sales have direct relation with conversions but not necessarily with clicks. Therefore, advertisers should be aware of their primary goal for their online advertising campaigns. If increasing awareness is the major purpose, then it is ok that results in a lower than expected CTR. As long as the campaign meets their goals in conversions, branding or traffic volume (impressions), CTR becomes less important since it is only one indicator in evaluating the effectiveness of online advertising campaigns.

Xi LiAbout the Author:

Xi Li is the Marketing & Ad Ops Specialist at Joinville, a global and multicultural ad trading desk helping companies reach global audiences online

Written by Magic Man

Joinville is an advertising technology platform for multicultural advertising bought and sold in real-time between buyers and sellers.