Money & metrics · also called click-through rate, clickthrough rate
CTR (click-through rate)
CTR is the percentage of people who click something after seeing it, calculated as clicks divided by impressions.
Click-through rate measures how often a view turns into a click. Show an ad 1,000 times, get 30 clicks, and CTR is 3%.
A search arbitrage funnel has three separate CTRs, and confusing them is the commonest beginner mistake. The first is the CTR of the bought ad on the traffic source, which drives the price of traffic. The second is Lander CTR: the share of visitors who click a keyword or related search on the arbitrageur's page. The third is Ad CTR: the share of resulting searches that end in a click on a sponsored listing. Revenue depends on the product of the second and third.
Higher is not always better. A CTR pushed up by honest relevance is healthy. One pushed up by clickbait, confusing layouts or ads that look like navigation produces clicks from people who never meant to click (see accidental click), and search feeds watch for unusually high rates as a sign of invalid traffic.
An example
Say 1,000 visitors arrive, 450 click a related search (lander CTR 45%), and 270 of those searches lead to an ad click (ad CTR 60%). End to end, 45% x 60% = 27% of visitors produce a paid click.
Related terms
Lander CTR (keyword click rate)
Lander CTR is the share of landing-page visitors who click a keyword or related search term, taking them on to the page that shows search ads.
Ad CTR (feed click rate)
Ad CTR is the share of searches or results-page views on a feed that end with the visitor clicking a paid ad.
CPC (cost per click)
CPC is the price paid for one click on an ad; in search arbitrage it is what the arbitrageur pays a traffic source for each visitor.
CPM (cost per mille)
CPM is the price of one thousand ad impressions; "mille" is Latin for thousand.
Clickbait
Clickbait is a headline or image engineered to provoke a click through exaggeration, withheld information or shock, without delivering what it implies.
Accidental click
An accidental click is a click on an ad that the user did not mean to make, usually because of where or how the ad was placed.