CTR means the number of clicks your ad is getting, divided by the total number of times your ad is shown.
Formula:
CTR= Clicks/impressions
Click -through rate is a very important term in Google Adwords, as because of this you are getting some clicks, which can get converted later on. CTR can lower the overall expenditure of your search network campaign, and will ultimately lead to higher conversion rate.
Instead of the above one, there are some more benefits associated with CTR.
Benefits Of High CTR
High CTR means your campaign is getting a high quality score, which means lower cost per click(CPC), and which will ultimately lead to huge savings on your campaign. High CTR also means higher conversion rates, as the audience is directed to the topic they are most interested in.
These were the overall benefits of high CTR, now, it's time to explain you the problems associated with low CTR.
Problems With Low CTR
If your CTR is low, then it can bring down the quality of your overall campaign. Spending huge amount of money on keywords which won't going to bring you any benefit, is a total waste. If your CTR is low, that means your keywords are not applicable to your ad, not important to your landing page, whatever the reason is, it's bad in either way. Google loves high CTR value, so, you won't have the capacity to finish in Google's "top pages" (position 1-3), with low CTR. If your quality score (influenced by CTR) is lower than your rival, then you will dependably be paying more for every click than them.
Sometimes Higher Click Through Rate Is Bad For Business
If a relevant keyword is not generating sales, leads, etc., then in that case, high CTR is not good for your business. Because you are paying so much, and still not getting anything. So, instead of always looking for higher CTR, look for high CTRs on keywords that are relevant to your ad text and landing page and which are affordable too. So, your main motive should be to target the right words first and then make people click on that keywords.
Display Network CTR
Display network CTR usually not affect the quality of your campaign. Google is very smart and knows that this CTR always generate low click through rates. Usually display network CTR is less that 1%.
These were some of the basic information about click through rate, if you know any other detail about CTR, then please feel free to share with us in the comments section below!