CTR Vs. Conversion Rates

By Jimmy Boyd

Internet marketers risk losing their advertising money if they fail to track and test marketing campaigns. When selling products online, you must develop statistics for CTR (clickthrough rates) and conversion rates. Ultimately, both form an important aspect that mean the difference between success and failure in online marketing. Marketers who succeed in optimizing their CTR and conversion rates reduce advertising risk while making more money.

CTR Basics

CTR refers to the percentage of visitors clicking on an online ad. You divide the number of ad impressions by the number of clicks to get the CTR. For example, if you show an ad 100 times and get two clicks, you have a CTR of 2 percent. According to Google, a reasonable starting goal when buying ads through Google AdWords is 1 percent.

Conversion Rate Basics

A conversion rate refers to the percentage of website visitors who complete the visitor action you desire for that page. For example, if a page is selling a product, then the conversion rate is the number of sales per visitor. Other possible actions include subscribing to a newsletter or calling a phone number.Divide the number of visitors by the number of sales to get the conversion rate. For example, if you make one sale for every 100 visitors to your website, you have a conversion rate of 1 percent. Although a Forrester Research study found that average conversion rates were 2.9 percent, your own conversion rate will vary based on the specific goal of the Web page, your marketing message and other factors.

Tracking CTR and Conversion Rates

The company you buy advertising from provides your CTR rates. Always make sure the advertising seller provides this feature. To track your conversion rates, divide the number of visitors by the sales or other desired visitor action. Web hosts typically provide visitor statistics if you want to manually figure the conversion rate. Otherwise, you can use various software programs to track conversion rates. Examples include PipelineDeals, Traffic Analyzer and LeadMaster.

Improving CTR Rates

The goals of improving CTR and conversion rates are not totally independent. Your CTR rate is important, but your ads must ultimately send visitors that will actually buy your products. Your goal is to send as many potential buyers as possible instead of getting the most clicks. Google recommends making your ad copy as relevant as possible to the keywords that you are targeting. For example, if you are buying ads that appear when people enter the term "orange juice" into a search engine, then using the phrase "orange juice" in your ad title is more relevant than the word "fruits."

Improving Conversion Rates

There are many ways to tweak a Web page to improve conversions. You can try changing elements like the headline of the page or the price of the product. Some businesses add bonuses or other special offers to increase conversion rates. The actual sales letter can also have an effect. For example, highlighting as many benefits of your product as possible is another method used to increase conversion rates. Other methods include adding more product images or incorporating customer testimonials. Each time you change an element of the page, track your conversions and compare your statistics before and after the change.