What is CTR?

CTR = Click-Through Ratio

How many clicks equal a sale?

This simple question has led to literally thousands of online experiments and much consternation among Internet Pay Per Click (PPC) gurus. When you’re advertising in a business directory like Superpages, your CTR to sales ratio depends on a number of factors. For instance, if you’re a plumber or a house painter, you’re likely not going to get online sales, but rather, contacts either online or by phone.

Typically, you’ll use a Pay For Calls (PFC) campaign instead of (or in addition to) a Pay Per Click campaign to drum up business. If you get five calls through your PFC tracking hotline, you should generally expect at least a conversion rate of abut 25 percent, or one sale per five calls.

What is Your Industry CTR?

Conversely, if you’re a mortgage broker or bail bonds dealer, you might expect a lower yield per number of calls or clickthroughs. After all, if your service is more expensive, consumers generally want to shop around and think over your offer longer. Thus, it may be more effective to ask “what's the best CTR to sales ratio I should expect given my industry, my brand positioning, my location, my competitors’ track records, and my financial goals?”

In general, the higher your Pay Per Click costs, the higher your sales to CTR ratio needs to be to justify the campaign. Obviously, if you’re paying $50 per click and you are only getting a conversion rate of two percent, you’re going to lose money unless each sale you make generates a huge profit margin for you.

Increase Profit Margins

You can tweak various factors in your Pay Per Click cost calculus to justify low to medium clickthrough rates. Create a higher profit margin, for instance, or generate more business by advertising more broadly across Superpages’ geo/category slots.

Also bear in mind that your CTR to sales numbers will evolve as your campaign grows, contracts, and otherwise meets market pressures. Thus, you must measure your tactics through small, scientifically controlled tests.

It’s also important not to correlate your CTR/sales numbers with your overall ad campaign performance or even with your brand performance. Your CTR to sales numbers can be high even if your overall ad profits are low, and vise versa. Take all Pay Per Click statistics and measurements in context.

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