Conversions or Clicks: Which Metric Really Drives Value for My Business?

Click Through RateDigital marketing is a detailed and ever-changing landscape, and unless you’re spending hours of your time every week optimizing, tweaking and researching, then you’re probably not getting as much out of your Pay-Per-Click (PPC) ad dollars as you could be. For years, marketers have heard that traffic numbers are the most important, but is that still true? Today, the complex algorithms used by search engines and ad networks can be nuanced to a nearly-infinite degree, offering marketers a broad landscape of information but making it tough to see which metrics offer true value for your business.

We’re going to focus on two of the most important metrics–click-through rate and conversion rate–and the direct impact they have on your business success.

Click-through Rate: Getting Them There

Click-through rate is one of the key metrics that marketers obsess about, and is calculated by this formula:

Click-through rate = clicks divided by impressions

Optimizing your clickthrough rate (CTR) is one of the most important things you can do to improve your overall ad spend, but is it the most important? That argument is ongoing among marketers, because the sad reality is that you can drive a huge CTR and still have a very low conversion rate (CVR) simply by using clickbait. What it all comes down to is what the goal is for your website–sales or ad impressions? If you’re focused on ad impressions without providing value to your audience beyond getting more clicks, you’re missing out on conversions. Most businesses need to also focus on relevance, or ensuring that the offer on the ad is compelling enough to encourage visitors to take that next step towards conversion. Want to learn more? Entrepreneur’s Richard Stokes walks through 3 Steps to Improve Your Ad’s Clickthrough Rates.

Conversion Rate: Closing the Deal

Conversion rates are marketing gold, indicating that you’ve gotten people through the front door of your website and into the first true step of your sales funnel. Calculate your conversion rate quickly with this formula:

Number of people who completed the desired action ÷ number of total clicks on your ad

Whether your desired action is to drive users to a registration page to learn more or get an estimate, sign up for a free newsletter or to make an eCommerce purchase immediately, a conversion means you’re one significant step closer to a new customer. Active PPC (Pay-Per-Click) management works to optimize your conversion rates by analyzing not just your ad, but also looking at the landing page to ensure that your offer is as compelling as possible based on where your leads are coming from. 

So which is it–which metric is truly the most valuable for your business? The answer is both: you need the most relevant click-throughs in order to drive a high number of conversions once visitors have reached your site.

Now that you know the basics, are you ready to dive in and learn how to take your business to the next level online? Contact Link Right Media, your source for marketing your business through consistent application of best practices and continuous optimization.

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