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How important is CTR?

October 29, 2008

I had initially thought that with a test facebook advertising budget of $10 a day, we shouldn’t really be concerned with the actual click-through-rate (CTR). The logic was that we would max out on clicks every day so whether we had a .1% CTR or a .2% CTR, we would still get the same amount of clicks. After someone clicks through, then it becomes the job of the website to convert the clicker.

After thinking about it, I’ve reconsidered. CTR is not only an indicator of whether you’re messaging correctly to the right person/target, but it also can serve as a gauge of how likely that person is to complete an action once they arrive on your site (e.g., subscribe). If CTR is high, you’re likely messaging to a group of people who are predisposed to like your product/show which should correspond with a higher “action conversion” rate once they’re on the website.

Building off this logic, we recently changed our key word criteria for facebook advertising. We had originally targeted people age 20 and younger who like the CW, Buffy, Veronica Mars, High School Musical, Hannah Montana, and Jonas Brothers. Since we already specified our demographics, we realized we don’t need High School Musical or Jonas Brothers in our key words criteria. So we narrowed the key words down and removed the extraneous High School Musical and Jonas Brothers (psychographically, these didn’t really belong). The results are below:

Our CTR went from .10% to .19%. This indicates that our new midday ad was more effective to the group they served, and hopefully, this results in higher subscriptions (sorry, no data proof on this). Also note that our cost per click went down with the more targeted approach, an additional benefit of more precise advertising.

As a side note, we created a little buzz with our ad below. The ad is intentionally ambiguous (wanted to create mystery) but surprisingly, some people were confused after they clicked through to our youtube page. We had a handful of comments and messages where people were unsure whether the series was “real” or not. Generally, those who were initially confused actually appreciated the show and thought it was cool once they realized what it was about.

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