What is a click-through rate (CTR)?

The click-through rate (CTR) is a crucial metric in digital advertising that indicates the effectiveness of an ad in generating engagement. It specifically represents the ratio of the number of clicks an ad receives to the number of times the ad is shown, known as impressions. This calculation helps advertisers understand how well their ad is performing; a higher CTR suggests that more users are finding the ad relevant and are motivated to click on it.

When assessing the other choices, total ad spend refers to the amount of money spent on an advertising campaign, which does not directly indicate user engagement or performance in the context of user interaction with the ad. Simply stating the number of clicks an ad receives provides some insight but lacks context without considering how many times the ad was displayed. Lastly, the time an ad is displayed to users refers to duration rather than engagement metrics, which does not address the effectiveness of clicks relative to impressions. Thus, the calculation of impressions to clicks is what defines the CTR and showcases its importance in measuring ad performance.