Click-through rate (CTR) is a metric that measures the number of clicks advertisers receive on their ads per their number of impressions. In this tutorial you'll learn:
- Exactly how click-through rate is calculated. A click through rate formula.
- Why click-through rate is important to your pay-per-click  marketing account.
- Learn what constitutes a good click-through rate  for PPC , and how you can get one.
As mentioned above, PPC click-through rate  is the rate at which your PPC ads are clicked. This number is the percentage of people who view your ad (impressions) and then actually go on to click the ad (clicks). In formulaic form, it looks like this:
(Total Clicks on Ad) / (Total Impressions) = Click Through Rate
Generally, you can view your click thru rate within the dashboard of your PPC account:
Why Do Click-Through Rates Matter?
Click-through rate is important to your account because it directly effects your Quality Score .
Google AdWords  and other search marketing platforms  offer pricing discounts for ads that offer high relevance (read: make searchers happy with their search engine results ). One means for doing this is to offer higher Quality Scores to ads with high AdWords click through rates :
- High click-through rates lead to high Quality Scores.
- High Quality Scores allow you to improve or maintain ad position  for lower costs.
Additionally, if you are advertising on relevant queries, achieving a high click-through rate means that you are driving the highest possible number of people to your offering.
What's A "Good" Click-Through Rate?
This is a hotly debated topic: what constitutes a good click-through rate?
From a purely statistical standpoint, it depends.
Take a look at Yahoo's answer to the "what's a good click-through rate" question:
The honest answer to the question is, “It depends.” Click-through rates are naturally going to vary from campaign to campaign, and even from keyword to keyword. Everything involved in the way your ad is displayed plays a part, from your ad copy to the ad’s ranking on the results page.
So while you want to have a "high" click-through rate, there's really no magic number. Generally speaking, as we mentioned above, you want as high a click-through rate as possible.
Except when you don't.
When Higher Click Through Rates Are Actually Bad For Business
If a keyword isn't pertinent to your business or isn't going to generate sales, leads, branding gains, etc. then a high click-through rate for that term is actually bad for business. The reasoning for this is fairly clear:
- You're paying for every click.
- A lot of clicks generate a lot of ad spend.
- Some times you're generating clicks on keywords that are priced too high, and won't turn a profit even if they convert.
- Irrelevant terms and clicks are just spending money without bringing in additional business.
So you don't always want higher click-through rates: what you want are high CTRs on keywords that are:
- Relevant - Have to do with your ad text, your landing page, and your offering.
- Affordable - Keywords that aren't going to be profit-prohibitive.
So, in a nut shell, a good click through rate means first targeting the right words, then getting as many people as you can to click on those ads.
Achieving Strong Click-Through Rates For Your Ads
A pay-per-click solution for click-through rate, then, should provide you with:
- Targeted keywords to bid on.
- A means of discovering cheaper, cost-efficient clicks.
- Tools and methodology for closely integrating keywords with ad text and landing pages.
- The ability to quickly and efficiently segment keyword groups  to generate closer targeting.
WordStream answers each of these challenges with the software's search engine marketing platform and solutions :
- Targeted Keywords - The software offers keyword research , keyword suggestion , and Web analytics tools  that generate extensive, highly relevant clicks.
- Cost-effective Clicks - WordStream offers best-in-class Quality Score  management tools and a unique means for identifying long tail keywords , ensuring that you are discovering the cheapest and most relevant clicks possible.
- Additional Tools - Finally, you need to actually create compelling ad text  (text that relates to what the person was searching for in the first place), have them relate to your keywords, and have them synced with your landing pages .
- Keyword Grouping - WordStream offers sophisticated keyword grouping as illustrated below and PPC management tools  which allow you to create tightly related segmentations.
Generating A Truly Optimized Click-Through Rate
If you're interested in generating the best click-through rate possible for your offering, learn more about WordStream's tool set and how it can be leveraged to generate better CTRs by reading about our:
- Web Analytics Tools 
- Keyword Research Tools 
- Keyword Grouping Tools 
- Ad Text Creation Tools 
- Landing Page Tools 
- Quality Score Solutions 
- Adwords Performance Grader 
And, of course, learn more about WordStream's tool set and how it affects click-through rate by: