What is click-through rate (CTR)?
Click-through rate (CTR) refers to the number of times a user clicks on a website advertisement compared to the total number of visitors who see the ad.
Advertisers use click-through rate to measure interest in an advertisement. Depending on how the ads are being sold, the click-through rate can also be translated directly into the amounts in euros for the online publisher hosting the ad.
In order to measure consumer interest in an advertised product, the click rate is calculated. For example, let's say 100 visitors go to XYZ.com, which sells computer routers. There is a specific advertisement on the XYZ website showing a brand of router for sale. Out of those 100 website visitors, one person clicks on the advertisement. The click-through ratio is calculated from 100 visitors divided by a click on an advertisement, which corresponds to a click-through rate of 1 percent.
Pay-per-click (PPC) is an online advertising model in which advertisers only pay the publisher when visitors click on their advertisement. With such a model, the higher the CTR percentage, the more revenue the online publisher will generate.