How to calculate aggregated click-through rate (CTR) on Paid Search Ads?

asked: 5 Sep 2019 modified: 18 Feb 2020 views: 274

I've always known what CTR means and how the metric is calculated. However, when it comes to paid search ads, with the way the account is structured (Ad group --> Campaign --> Account), can I average out the CTRs of all the Campaigns to get Account- level CTR?

1 Answers
This is one of the common mistakes people tend to make when it comes to calculating CTR for paid advertising. We all know that CTR stands for Click-through Rate which refers to the tendency of people clicking on an ad after they were served with the ad and it is calculated by using total number of Clicks divided by total number of Impressions. It is the best metric to gauge the performance of an ad creative and also a factor to be considered when it comes to the ad's quality score. With that being said, CTR is one of the essential metrics advertisers look into when it comes to measuring campaign success. 

When looking at performance of paid search ads, the different layers of an Account allow us to look at the performance of different elements of the campaign and optimize the campaign performance accordingly.  Going back to your question, when looking at performance metrics of different layers of an Account, can I average out the CTRs of all Campaigns to get an Account- level CTR (or to average out CTRs of all Ad Groups to get Campaign- level CTR)? The answer is no. The outcome of the average of Campaign- level CTR is simply the average of CTRs delivered by all Campaigns which is a benchmark for you to use when looking at CTR of each individual Campaign but unfortunately, it is not the equivalent of the CTR delivered by the Account. To calculate the Account- level CTR (under the scenario when total numbers of clicks and impressions on Account level are not available), you'd have to sum up the total clicks delivered by all campaigns as well as the total impressions delivered by all campaigns and conduct division to get the true Account- level CTR.

To calculate aggregated CTR for paid social, you should also follow the same methodology to avoid looking at misleading campaign performance result.
0 votes
replied 6 Sep 2019
modified 6 Sep 2019

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