Click-Through Rate (CTR)

Click-through rate (CTR) is a metric that measures the number of clicks advertisers receive on their ads per number of impressions. It's a ratio that shows how often people who see an ad end up clicking on it. An ad's CTR is calculated by dividing the number of clicks that an ad gets, by the number of times the ad is shown (impressions).

For example, if an ad was shown 100 times and it received 1 click, then the CTR would be 1%. If an ad was shown 100 times and it received 10 clicks, then the CTR would be 10%.

In the context of a website, CTR could refer to the ratio of users who click on a specific link to the number of total users who view a page, email, or advertisement. For instance, if a user reloads a page multiple times but clicks only once, this corresponds to a 100% CTR (1 out of 1).

Similarly, a user who loads a page once but clicks multiple times on a button should only count as 1 out of 1. This also solves for cases where users see an important button such as "Sign-up" multiple times a day, and we would still consider it a success if they click just once.

It's important to note that while a high CTR is often a positive signal, it's not always the case. For example, in experimentation, ratio metrics like CTR can sometimes be misleading. It's possible to see an increase in CTR alongside a net decrease in total clicks.

This situation can occur if the number of unique users viewing a button (denominator) decreases. As a best practice, it's recommended to track the numerator and denominator as independent metrics when monitoring ratio indicators.

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