CTR (Click Through Rate) – Explanation, Results and Tips

A very important metric for banner advertiesment is the CTR (click through rate). It is simply the number of clicks the ad generated divided by the number of total impressions. You can also think of it as the product of the probability of a user noticing the ad and the probability of the user being interested in the ad.

CTR = clicks / impressions = p(notice) · p(interested)

The current average CTR is around 0.09 % or 9 clicks per 10,000 impressions and has been declining for the past several years. What are the reasons for this? For one, the common banner locations are familiar to web users and are thus easy to ignore. There’s also the increased popularity of ad-blocking software.

The attitude of internet users is generally negative towards banner ads. This is caused by advertisers using more and more intrusive formats. These include annoying pop-ups and their even more irritating sisters, the floating ads. Adopting them is not favorable for advertisers. They harm a brand and produce very low CTRs. So hopefully, we will see an end to such nonsense soon.

As for animated ads, their success depends on the type of website and target group. For high-involvement websites that users visit to find specific information (news, weather, education), animated banners perform worse than static banners. In case of low-involvement websites that are put in place for random surfing (entertainment, lists, mini games) the situation is reversed. The target group also plays an important role. For B2C (business-to-consumer) ads animation generally works well, while for B2B (business-to-business) animation was shown to lower the CTR.

The language used in ads has also been extensively studied. One interesting result is that often it is preferable to use English language even if the ad is displayed in a country in which English is not the first language. A more obvious result is that catchy words and calls to action (“read more”) increase the CTR.

As for the banner size, there is inconclusive data. Some analysis report that the CTR grows with banner size, while others conclude that banner sizes around 250×250 or 300×250 generate the highest CTRs. There is a clearer picture regarding shape: in terms of CTR, square shapes work better than thin rectangles having the same size. No significant difference was found between vertical and horizontal rectangles.

Here’s another hint: my own theoretical calculations show that higher CTRs can be achieved by advertising on pages that have a low visitor loyalty. The explanation for this counter-intuitive outcome as well as a more sophisticated formula for the CTR can be found here. It is, in a nutshell, a result of the multiplication rule of statistics. The calculation also shows that on sites with a low visitor loyalty the CTR will stay constant, while on websites with a high visitor loyalty it will decrease over time.

Sources and further reading:

  • Study on banner advertisement type and shape effect on click-through-rate and conversion

http://www.aabri.com/manuscripts/131481.pdf

  • The impact of banner ad styles on interaction and click-through-rates

http://iacis.org/iis/2008/S2008_989.pdf

  • Impact of animation and language on banner click-through-rates

http://www.academia.edu/1608289/Impact_of_Animation_and_Language_on_Banner_Click-Through_Rates

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