We have moved into our brand new downtown office at the corner of Broadway and Bellview

The Difference between CTR and Conversion Rate Explained

The Difference between CTR and Conversion Rate Explained
Tim Parkin

Internet marketers stand the risk of losing their advertisement funds if they do not test and keep track of their marketing campaigns. When marketing a product on the internet, one must come up with the right statistics for click-through rates (CTR) and conversion rates. Both of them are a core factor determining the failure and success of an online marketing campaign. Marketers who succeed in optimizing their conversion rates and CTR lower the risks while making money.

But what is the difference between CTR and conversion rate? Read on to find out more!

Which should you measure between Click through rate and conversion rate?

Digital marketers use both click-through rate and conversion rate to determine the success level of their marketing drive. But conversion rate and click-through rates affect two distinct stages of the sales/marketing funnel.

The click-through rate will measure the number of people that act before they hit your website. At the base of the marketing and sales funnel are the conversion rates which help to measure the actions people take on your website when they are already there. Some of these actions include signing up for a newsletter, submitting a form, making a purchase, and downloading an infographic.

For instance, if you want to know the number of people who checked out your website upon seeing the Instagram ad, you will be looking for the click-through rate. If the Instagram ad generated 90,000 impressions and 3,000 of the people clicked on the ad to visit the site, the click-through rate will be 3.3%.

But if you want to go further to know how many subscribed to be part of the newsletter subscribers from the leads from the Instagram ad, you will have to measure the conversion rate.

In this scenario, of the 3,000 persons that clicked on the Instagram ad and went to the page, only 35 subscribed to the newsletter. This gives a conversion rate of 1.17%.

Basics of click-through rate (CTR)

The CTR talks about the number or percentage of visitors who click on the online advert. To get this number, you have to divide the total number of advert impressions by the number of clicks by visitors. For instance, if you show an ad 200 times and get 4 clicks, you will get a CTR of 2 percent. A good number when purchasing ads via AdWords from Google is one percent.

Basics of conversion rates

Conversion rates are the number or percentage of people who complete the entire process you desire on the page. For instance, if you have a page where you sell something, the conversion rate will be equal to the total number of sales gotten from each visitor. Some other related actions include the visitor calling a number or subscribing to a newsletter.

To get the conversion rate, you will have to divide the total number of visitors by the total sales before you get the conversion rate. For instance, if you make only one sale for hundred visitors on your site, your conversion rate will be one percent. Conversion rates vary depending on what the goals of the page may be

Your CTR rates will get provided by the company you buy advertising from. Always ensure that the seller makes available this feature. If the web hosts do not give you the visitor statistics, you can use certain software programs to track the rates.

How to improve your CTR rates

The aim to improve conversion rates and CTR are not different. The CTR rate is vital, but the ads have to direct the visitors to the point of purchase. The goal here is to get a significant percentage of your buyers instead of getting clicks. 

You should create an ad copy that is very relevant to the keyword getting used. For instance, if you are targeting ads that surface when people search for "apple juice" in a search engine, you should use the term "apple juice" in the ad title instead of using "fruits."

You can optimize your web page to boost conversions. To do this, you may change certain elements such as the page headline or the product price. Certain businesses may add certain features such as bonuses to boost conversion rates. 

One other way to boost your conversion rates is to highlight the benefits associated with your products. Other ways include using testimonials from customers and adding images. Whenever you make changes to an aspect of the page, ensure to analyze the conversion and compare the data during the changes.

Advantages of a good CTR

CTR represents one of the most trusted tools to measure the performance of your ad campaigns. Having a good CTR will be able to tell you some things about your ad while adding value to your brand.

  • It shows you are doing something the right way

Having a good CTR indicates that there is harmony between the components of your ad such as the images, keywords, positioning, and ad copy. It also tells you which ads are engaging and relevant and which should get filtered out.

With an improvement in your CTR, the CTR value will improve and this will influence your Ad Rank. The expected clickthrough rate is a keyword status that helps to measure the chances of your ads getting clicked on when it shows the keyword. This is regardless of your ad's extensions, position, and other ad formats which may affect the visibility and prominence of your ads.

  • It improves the conversion rate

A higher number of clicks translates to higher conversions. You may be fortunate for your viewers to go all the way making them take the necessary action. Whether it's for a purchase or sign-up, having a better CTR can influence your conversion rates.

  • Improved Ad impression share

Having higher CTR in Google properties such as Google Display Network and Gmail Ads can save you money. With an increase in CTR, you will get qualified for less CPC (cost per click). Even though these figures may not seem much in the beginning, they begin to have value as they accumulate.

Also, a good CTR will create an instant impact on your impression share. What this means is that your ads will become more visible.

  • Gives you a better quality score

The advantages of a good CTR don't end there. When you have a good CTR, the ad will rank higher even with a lower CPC. This will ensure that you don’t spend money while increasing the returns on investment.

What happens when the CTR is not performing?

One clear thing is that the click-through rate metric is very influential on the performance of the ad and the budgeted amount for the ads. Having a low CTR shows you that you need to investigate your campaign to know what the problem is. It may show you that you are using non-performing keywords. It could also be that your ad copy is not inspiring enough for the audience.

Whatever the case may be, you need to take the right steps before you invest more funds in a non-performing ad. 

What are the advantages of a good Conversion rate?

Having high conversion rates also shows a few things.

  • You are on course

Regardless of the business, you find yourself, if you have an impressive conversion rate, that is good stuff! It means you are gaining more people to subscribe to your message and brand. The leads generated are being converted into real customers. The more you keep at it, the higher the traffic you will get from Google. This is because Google will realize that you are delivering what the users need.

  • More return on investment

Every business looks to increase sales. With an increase in conversion rates, a business will begin making increased sales and this results in real growth. With time, this will help you achieve your business goals while generating a good return on your principal.

  • Optimization of conversion rates

The moment you first get into Pay-Per-Click ads, it may take some time before you get your landing pages, ads, and websites right, but it's worth it. With time, you will learn to improve upon the conversion rate optimization of the buyer's journey. With this, it becomes easy to get paying customers from leads. 

Also, you will be able to get repeat customers which means getting more from each client. With this, there will be fewer customer acquisition costs.

Final thoughts

Knowing the difference between CTR and Conversion rate is vital to getting the most of your digital marketing campaign. There is a connection between conversion rate and click-through rate. Marketers ought to find a way to optimize their sales funnel to make things easier for the customer. This means from the Ads to the call to action. 

When the viewers find your process engaging and relevant, your conversions and clicks will begin to rise.  This will help you attract greater traffic while causing them to respond to your CTA. 

Recent Articles

Need expert marketing advice?

Schedule your free consultation with Tim Parkin.
Schedule Consultation