What is a Clickthrough Rate?

A clickthrough rate is the frequency that people click advertisements on Web pages that are monetized using pay per click (PPC) advertising schemes. For example, an advertisement with a particularly enticing logo or a set of words that really grabs someone’s attention will generally get a better clickthrough rate than a boring advertisement. Many people who fashion Web pages will actually shape the tone of the content in order to generate more clicks on advertisements so they can make more money.

One of the most popular PPC advertising companies is Google Adwords. In this system, different businesses will compete for different keywords, gradually driving up the price. If someone posts a Web page allowing Google to advertise, the system is set up so it knows for what a person was searching and arranges the advertisements based on this information. The price of each click on an ad will vary based on how much competition the keywords have generated between advertisers.

People who monetize their websites are often very concerned about getting a high clickthrough rate, but they may be comfortable with a low rate under the right circumstances. For example, if an ad pays a very high price when someone clicks, the website can still make significant money with only a few clicks. In cases in which ads only pay a small amount, a high clickthrough rate can potentially be vitally important.

One way of aiming to increase clickthroughs could involve looking for a commercial slant when creating Web content. For example, someone who wants to write about furniture may angle his article so it deals with choosing between brands of furniture. Using this tactic, the writer will be able to attract viewers who are in the market for furniture, and potentially get more ad clicks than he would get with a purely information-oriented furniture article.

Another approach to advertising on the Web is based on Web page hits. People involved in this kind of advertising pay websites for simply showing banner advertisements without requiring any clicks. Systems that are arranged like this may also pay a certain amount of additional money for clicks. In some cases, ads such as this can be very high-dollar because popular websites can charge expensive rates for using any space on their pages. As a general rule, clickthrough-based schemes have gradually become more popular for the average website, while paying for banner space is less popular but still used.