It is becoming more frequent that marketers are looking directly at CTR’s when determining the Measure of Success. This seems like a reasonable metric to take into account because it is a percentage of visitors that clicked thru to the site. However, CTR’s do not tell the whole story, and even the wrong story when looked at alone.
The Industry average CTR ranges from a .06-.08%. In the Auto-industry the CTR is even higher, with a recent client requesting a 2.1% CTR for a 6 month campaign. So why is click-through-rate a flawed metric? 85% of clicks come from only 8% of the people. Another big obstacle is Ad Networks. Ad Networks have low CPM’s rates for a significantly large amount of impressions. They bring great branding and even high levels of clicks, but the click-thru rates are low. This gives a false perception in that the placements flopped, even though they had great success in terms of impressions and actual clicks.
Lastly, click-through-rates do not mean ads are not working – quite the contrary. Customers are responding to the ads, often with purchases not long after seeing the ad, and often without clicking. It is important to take all metrics into account, and not CTR alone. How do you work with your clients to help them understand that CTR is not the end all be all?