The Motive Web Design Glossary

click-through rate (CTR)

Measured as a percentage, ‘click-through rate’ (CTR), provides an indication of the relative success of an online advertising campaign.

The more successful the campaign, the higher the CTR. The highest possible click-through rate is 100%, in other words, a campaign where every person who sees the advertisement clicks through to the advertiser’s website.

The click-through rate is calculated by comparing the number of users who have clicked on a banner, against the number of times the advertisement has been displayed.

Calculating click-through rate

To calculate the click-through rate of a campaign you’ll need to know:

• the number of impressions, and
• the number of times people have clicked on the advertisement (also referred to as the number of clicks).

CTR = (clicks / impressions) × 100

For example, the CTR on a 120-impression campaign, where 12 people have clicked through to your website, is 10%:

(12 / 120 = 0.1) × 100 = 10%

Why a percentage?

Calculating the click-through rate as a percentage can be more useful than the ‘raw’ number of clicks when you’re monitoring the success of a campaign over time.

Assuming that a banner is shown on a blog, the number of people reading the blog generally increases from month-to-month.

Let’s say you’re experimenting with the position or design of your banner. Comparing the number of clicks for each month won’t help you decide whether your experiments have made the banner more effective. For that, you’ll need a percentage value.

Monitoring the impact of banner variation on CTR

Month	Banner changes	Impressions	Clicks	CTR
March	Original	100	6	6%
April	Added black border	250	20	8%
May	Moved to bottom right of the page	400	50	12.5%
June	Moved to top left of the page	720	60	8.3%
July	Moved (back) to bottom right of the page	1020	130	12.7%

• In the (hypothetical) table above, the number of impressions, and the number of clicks increases month-by-month – as the blog gains popularity.
• Between May and June, the number of clicks has increased: from 50 to 60. However, the click-through rate has decreased: from 12.5% to 8.3%, suggesting that the changes to positioning have reduced the effectiveness of the banner.
• The sample data suggests that positioning the banner in the bottom-right of the page (May, June) is the better variation.

A-B testing

More sophisticated campaign management systems provide tools that allow you to experiment with banner ad placement, size, design, copy, etc. without having to ‘wait-and-see’ what impact the changes have made.

In ‘A-B testing’, multiple versions of the same webpage are displayed simultaneously. Each visitor to a website is shown a different variation of the page: the first visitor is shown variation [A], the second variation [B], the third variation [C] and so on, with the cycle looping for the n variations.

This form of testing can also be carried out in usability studies, to help fine tune an online product or service.

Related terms: banner ad, CPC, CPM, impressions, interstitial, search engine marketing.

Motive Web Design Glossary Trivia