What is a Click-Through Rate?
A click-through rate is a metric used in marketing to gauge the number of people who actually clicked on your website, image, link, or otherwise through to your content versus how many people saw or were presented with your brand (otherwise known as “impressions”) in an online setting.
For example, let’s say you posted a video to your Instagram Story with a link to your website embedded in the story. After several hours, you checked your stats to learn that 500 people “saw” your story.
Of those 500 views however, only 100 people took action to actually do something, in this case, clicking the link you had embedded in the story, directing people to your website.
This would be known as a 20% “click-through rate”, which by the way, would be phenomenal! Most click-through rates hover somewhere between 1.5% to 5%, unless you’re just in the zone, riding the waves!
Why do you use percentages to talk about metrics like these?
Marketers and business owners typically talk about these types of metrics in percentages which is why we point it out. Why? Generally speaking, when you’re looking at metrics, you’re reviewing many different metrics at the same time and comparing notes on one metric vs another metric.
This type of activity helps you glean insights into why the click-through rate, for example is what it is. If you only look at any one given metric singularly like “click-through rates” or “impressions (views)”, you may miss the bigger picture for how to recreate success or pivot away from a failing effort.
You may see the phrase “click-through rate” shown as an acronym on some reporting dashboards as such: “CTR”. Acronyms are one of those things you either love or you hate. Either way, you will find them to be common behind any advertising or organic reporting dashboard you review due to the sheer volume of metrics you’re reviewing at the same time.
Using percentages to talk about your click-through rate can help you gauge scalability.
For example:
If you were reviewing your reports dashboard to find that when you post links of any kind, you’re garnering an average 20% CTR (remember that’s short for “click-through rate”), and everyone bought your $10 offer from your website once they clicked on the website from the Instagram Story, you could assess that for every 500 views on IG Stories, you could expect to generate $1,000 in gross revenue.
You might then say, “Well I want to generate $5,000 in gross revenue. Then sure, assuming you are continuing to get an average 20% CTR, and everyone who clicks, buys (which is hardly ever the case though for the sake of this exercise, we will assume that is what happens), then it would be true that you would need to get 2,500 views with a CTR of 20% to reach $5,000. To reach this math, we turned the “20% into a decimal which would be .20).
Then you multiply 2,500 X .20 = 500. This 500 represents the number of actual people who theoretically clicked.
Then you multiply 500 X $10 = $5,000.
This type of modeling is how you can back into your goals.
Had you not been monitoring your CTR or click-through rate, you may never have known how many people need to see your post to know how many people might click from those that viewed to then purchase so you could plan for revenue.
While this can be a lot to take in, it isn’t a sprint. Just allow yourself the space to read and reread the example so that it makes fundamental sense.