Clickthrough Rate

Clickthrough rate (also click through rate, click thru rate, clickthru rate, CTR) is typically defined as number of clicks on an ad divided by number of ad impressions for a given time period. Click through rate is one of the biggest determinants of Google AdWords’ Quality Score (generally, higher clickthrough rates correlate with higher quality scores).

Additionally, if you’ve set up AdWords Ad Delivery to ‘Optimize: Show better performing ads more often’, Google will typically show ads with higher CTR more frequently (remember, to Google, a higher CTR means a ‘better performing ad’, as their revenue depends on how frequently an ad is clicked times the auction CPC price).

It’s tempting to optimize for clickthrough rate, eschewing ads with a lower CTR in favor of more appealing ads. In reality, however, there’s a careful balance. Too high a CTR may mean you’re attracting unqualified visitors to your site (put the word “FREE” in your ad and you’ll see what I mean), but, too low a clickthrough rate, and Google will probably lower your quality score, meaning you’ll wind up paying more to show at the same position than you had previously.