Click Through Rate (CTR) is the number of users who clicked on an ad on a web page divided by the number of times the ad was delivered (impressions) via Google search only. The average number of Click Through per hundred ad impressions, expressed as a percentage.
Good tracking software can give you CTRs automatically, but you can calculate CTRs manually:
No. of clicks / No. of impression = Click Through Rate
Example: One person clicked on a banner ad (clicks recorded) and ad was delivered 100 times (impressions) then the resulting CTR would be 1 percent.
A well targeted keyword has a higher CTR which shows a similarly targeted ad is more than a general keyword with non-specific ad text. If more your keywords and ads relate to each other to your business, then after searching on your keyword phrase, more a user is to click on your ad.
Click Through Rate is also used to determine Quality Score of your keyword. Higher Quality Score and CTR can lead to higher ad position and lower costs.
Now let’s know how CTRs helps you to get great Quality Score
If visitors click on your ad, that means they are voting for it and they are telling Google that what they were searching for, it was relevant to that. Google note this and praise to your account.
Google takes your CTRs into account in calculating Quality Score, not just for a specified period but for the whole history of each keyword. So it is important to monitor your search terms and take action on low-performing keywords.
Following are the considerations that are made and weighted accordingly, when determining the value of click through rates:
1) A keyword’s entire history matters as CTR History is weighted, the recent CTRs are weightier. This is an extra incentive to keep improving your campaigns.
2) With ad rankings, CTRs will vary. Google is not comparing equally the CTR of an ad positioned down the right hand side, with one positioned above the natural search results.
So, we hope now you understand that CTR is simply a percentage figure of the number of clicks on your ad, compared to the number of times the ad was presented to users.