What is CTR and CVR in Amazon Advertising Explained
When running ads, we deal with most Amazon PPC abbreviations. You have often heard of CTR and CVR while running ads either on Google or Amazon.
So, what are CTR and CVR? How do they work? What is the formula to calculate CTR and CVR?
CTR or Click-through Rate
It refers to the number of clicks a campaign receives from the number of impressions displayed to the customer on Amazon.
When we run an Ad on Amazon, it displays our Ad to customers on the search page. The number of impressions it displays is known as views, and the number of times the customer clicks the ad is known as clicks.
To measure the click-through rate, we use a formula:
CTR = [Number of clicks ÷ Number of impressions]x100
E.g., Theodore is running an ad on Amazon. The ad campaign generated 1000 impressions and 10 clicks. Now, we will calculate its CTR.
CTR= [30 ÷ 1000]x100=3%
What is a good click-through rate?
On average, a 4-10% click-through rate is considered good. The figure varies from category to category. Some categories have a higher click-through rate, while for some categories, 3% CTR is considered good.
CVR or Conversion Rate
In Amazon advertising, CVR plays a vital role. It shows how many clicks from ads converted into a purchase.
Formula to calculate CVR
CVR= [Number of orders ÷ Number of clicks] x100
We will take an example:
A shop gets 20 orders out of 100 clicks. We will calculate the CVR for this shop.
CVR= [20 ÷ 100] x100
CVR= 20%
Through CVR, you can measure how many clicks convert into orders. This metric can help you modify and optimize the Amazon PPC campaign. Look for keywords getting clicks and orders. If there are keywords with no sales and excessive clicks, pause them. Go with the keywords with high CVR to invest more in bidding for those keywords.
Are CTR and CVR both essential?
Both CTR and CVR are important metrics. CTR shows you the action taken by the users on the ad, while CVR shows the action taken by the user after clicking on the ad.
To improve CTR, you will need to work on the ad copy. For CVR, you need to optimize the listing page.
