Advertising Glossary: Impressions, Clicks and Clickthrough Rate (CTR)
Welcome to Digital Ad Academy. We’ll be using this series to break online advertising down into its core elements and explore the basics of buying, selling and tracking ads.
We begin with one of the most basic ways to measure the success of digital ad campaigns: the clickthrough rate (CTR). But before we can figure out what an ad’s CTR is, we need to understand how that particular statistic is calculated. To do this, we need to know the ad’s impressions, clicks and some basic division.
Some ad campaigns are purchased by number of impressions. Every time an ad is displayed on a user’s screen, or every time a page loads with your ad on it, an impression is counted, regardless of clicks.
How are ad impressions measured?
Does the ad make a user want to learn or see more? A click is counted each time a user clicks on any part of an ad. By clicking on the ad the viewer is sent to another landing page on the Web.
How are clicks measured?
Most online ad networks use some form of URL redirect to measure clicks. Before the user reaches the ad’s intended landing page, she briefly visits the ad network’s own URL for measurement. This usually happens so quickly that the user won’t even notice. Each ad has its own redirect URL, so each time that URL is loaded on the ad server, one click is counted.
Now that we understand impressions and clicks, we can learn how to derive the clickthrough rate, also known as clickthru rate or CTR. In plain English, an ad’s CTR is the percentage of impressions that resulted in a click.
How is clickthrough rate measured?
This is where our division skills come into play. Clickthrough rate is found with the following formula:
So, if your ad was seen 100,000 times (impressions), and 100 users clicked it, your clickthrough rate would be: 100/100,000=0.001 or .1%. Not too shabby!