Definitions

Click-through_rate

Click-through rate

Click-through rate or CTR is a way of measuring the success of an online advertising campaign. A CTR is obtained by dividing the number of users who clicked on an ad on a web page by the number of times the ad was delivered (impressions). For example, if a banner ad was delivered 100 times (impressions delivered) and one person clicked on it (clicks recorded), then the resulting CTR would be 1 percent.

Banner ad click-through rates have fallen over time, often measuring significantly less than 1 percent. By selecting an appropriate advertising site with high affinity (e.g. a movie magazine for a movie advertisement), the same banner can achieve a substantially higher click-through rate. Personalized ads, unusual formats, and more obtrusive ads typically have higher click-through rates than standard banner ads.

CTR is most commonly defined as number of clicks divided by number of impressions and generally not in terms of number of persons who clicked. This is an important difference because if one person clicks 10 times on the same advertisement instead of once then the CTR would increase in the latter definition but would stay the same in term of earlier definition.

References:

Sherman, Lee and John Deighton, (2001), "Banner advertising: Measuring effectiveness and optimizing placement," Journal of Interactive Marketing, Spring, Vol. 15, Iss. 2.

Ward A. Hanson and Kirthi Kalyanam(2007), Internet Marketing and eCommerce, Chapter8, Traffic Building, Thomson College Pub, Mason, Ohio.

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