PPC clickthrough rate (or PPC CTR) is a percentage that is usually used to measure the success of internet advertisement campaigns. It can be calculated by dividing the number of visitors who clicked on an ad by the total number of impressions, meaning the times that specific ad was displayed. The PPC CTR can directly affect the quality score of an advertising campaign. The higher this rate is, the more successful the marketing campaign is supposed to be.
CTR is not an overall response to the ads, but an immediate one. Getting many visitors to your website used to be noteworthy when traffic was the only factor when evaluating the success. However, the increasing preference towards efficiency and effectiveness, added to improved tracking tools, led to a smaller interest in increasing the CTR, and a bigger interest in conversion rates. So having a high PPC click-through rate is not necessarily an indicator of high conversion rate.
These two rates have virtually nothing in common, as one does not affect the other. If you make the mistake of creating an advertisement that gets clicks from curious people instead of people who are really interested in buying your products or services, your conversion rate will be drastically lowered. Therefore, while you work on improving the CTR, make sure your advertisement is geared towards interested and relevant users.
Some search engines offer discount prices for high relevance advertisements. This relevance is deduced from the PPC CTR itself, which determines the quality score of a specific ad. In computing this score, the clickthrough rates are taken into account, not only for certain searches, but for the complete history of all the keywords that led to displaying your ad, including the less relevant ones. Hence, it is essential to track all your keywords, and get rid of the ones that are too low-performing and have extremely low CTRs.
When the significant of your PPC CTR is determined, several factors are considered. For instance, while the entire history is taken into consideration, the latest CTRs are more relevant, since they may be a sign that you are making efforts to improve your advertisement campaign, and thus the recent rates are more significant. You should also keep in mind that CTRs vary with different rankings, and the discrepancy in the ad positions will be also taken into consideration, possibly leading to a change in your rate. Generally, the more specific and precise the search terms are, the higher the clickthrough rate will be, as your ad will match more accurately what is being searched.
You should also remember that broad keyword search terms will decrease the CTR, as the ads are not so targeted towards what the searches is looking for, so they are not considered to be relevant. Lastly, when evaluating a CTR as high or low, you have to consider the search terms that were used. For instance, a 1% is decent for broader search terms, but too low for targeted search terms.