What Is The Difference Between Click Through Rate And Conversion Rate

Team ThunderAct

A successful sales and marketing strategy does not end after the company implements it. What happens after is equally important. After all, the results will determine whether a campaign is successful or not.


For internet marketers, two of the most crucial metrics to measure success are click-through rate (CTR) and conversion rate. Both CTR and conversion rate will track whether the advertising money of the company was well-spent. These two will also help in making better and more effective decisions.


But how are they different?


Click-Through Rate

CTR refers to a metric that measures the number of people who clicked the company’s ad to get to the website or a landing page. Basically, it is a percentage representing the number of clicks any type of marketing activity generates based on the impressions served. 


However, having a high CTR may not always be a positive thing. It is necessary for the company’s ad to target the right keywords. You should also make sure that your content is relevant and valuable to a visitor.


Conversion Rate

Conversion rate is also a metric shown as a percentage. But the difference is that it shows the number of app or website visitors who completed an action compared to the total visitors. The result to measure may vary. It may refer to those who download content or fill out a form.


While increasing traffic is a good thing, the conversion rate is more crucial. Marketers should target higher percentages as these directly affects the company’s sales and revenue.


How to Track CTR and Conversion Rates

Generally, the third-party organization where you buy ads from will determine the CTR rates for you. Check with the seller if they provide this feature. 


To calculate CTR on a particular paid ad, divide the number of clicks on the said ad by the total impressions. Then, multiply the answer to 100 to get the percentage.


For instance, an ad generated a total of 200 clicks, and a total of 4,000 people saw it during the campaign. Your CTR formula will be 200 divided by 4,000. Since it results in 0.05, the CTR is 5%.


As for the conversion rates, your company may track them using visitor statistics from your web host. The formula to calculate conversion rate is simple. Divide the total visitors by the goals completed. Multiply the answer to 100 to get the percentage. 


For example, you want to find the percentage of visitors who turn into leads. Divide the total number of leads by total traffic. Let us say that you had 1,000 total traffic for a particular period. During that time, there were 100 who turned into leads. Your calculation should be 100 divided by 1,000. Since the answer is 0.1, your conversion rate is 10%.


You may also opt to use software that tracks conversion rates to help you analyze customer data.

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