A common belief is this:
More Click Through Rate (CTR) = More Return On Investment (ROI).
In other words, most people think that the more clicks they receive, the higher the ROI of their ad.
A Nielsen Company research, measured across over 200 campaigns, has busted the myth stated above.
CTR and ROI have no relationship!
A correlation of -0.7 shows that these 2 metrics (CTR & ROI) are not at all related. This means that CTR doesn’t help advertisers predict the overall ad ROI; and perhaps shouldn’t be used as part of any marketing measurement matrix.
So what is CTR used for?
To answer that, we have to first understand how CTR is calculated:
The only thing it can measure is your ad persuasiveness. Consequently, ad attributes like image quality, ad attractiveness and choice of words affect the CTR.
But whether you can convert a visit to sales is a different ball game altogether. It will very much depend on your product offer, web design, web navigation and the ease of purchase!
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