In-depth: Do click-through rates deserve the hype they get in the digital marketing world?

New Delhi: In the fast-paced world of digital marketing, click-through rates (CTR) used to be the holy grail, the metric everyone chased like it was the golden ticket to success. But as marketers have become savvier and consumer behaviour more complex, the once-mighty CTR is losing its sparkle. 

These days, it’s less about those quick clicks and more about meaningful engagement, with brands realising that a high CTR doesn’t always translate to real value. 

It's like realising that getting someone to open the door doesn’t mean they’ll come in and stay for tea!

Another significant factor contributing to this shift is the widespread use of ad blockers, which prevent ads from reaching potential customers and distort CTR measurements. As a result, marketers are grappling with the implications of these blockers, questioning the accuracy of their data and the effectiveness of their campaigns.

Compounding this issue is the prevalence of click fraud, where automated bots generate fraudulent clicks, further undermining the reliability of CTR as a performance indicator. This growing concern has prompted marketers to seek more robust alternatives, leading to the rise of metrics such as viewability, engagement rate, and conversion rate. These metrics offer a clearer picture of audience interaction and overall campaign effectiveness.

Karthi Marshan, CEO at Marshan.ink and former CMO at Kotak Mahindra Bank, argued that the overemphasis on click-through rates (CTR) is becoming outdated. “When print ruled, we relied on circulation data, and every newspaper owner who disagreed with the data challenged it and alleged fraud,” he noted. 

Similarly, during the broadcast TV era, placement decisions worth thousands of crores were based on clunky data from limited sources, yet brands thrived on traditional advertising methods.

Marshan highlighted the current challenges and said, “The number of bad actors in digital is all around us. It’s become super hard to tell the good guys from the others.” With over USD 100 billion attributed to click fraud, he believes it’s time to rethink how metrics are used. 

“When the global norm on CTR says that 997 out of 1,000 people shown ads don’t care enough to click, what’s the right decision to derive from that? So far, most decision-makers have chosen to throw more money at the problem and accept 0.3% as a fait accompli line in the sand. How about stepping back to think whether we are measuring and reacting to the wrong thing altogether?”

“In sum, marketers use measurements largely because they face cynical decision-makers pressured by the stock market to focus on short-term results rather than long-term customer lifetime value,” Marshan commented. 

For Gopa Menon, Chief Growth Officer (APAC), at Successive Technologies, CTR remains relevant as an indicator of engagement and ad relevance. However, it shouldn't be the sole focus, especially with the rise of ad blockers, evolving user behaviour, and diverse marketing goals.

“I'm not going to debate that CTRs are completely useless. But I also think it is not the holy grail anymore. 10 years ago, platforms wanted you to see your performance in a certain way. It's no longer the case. Now, we can see the performance in five different ways. Therefore, CTRs don't hold as much importance,” said Pawan Sarda, Chief Growth Officer at The House of Abhinandan Lodha. 

This is pushing marketers to cultivate brand equity, crafting identities that resonate with consumers on an emotional level. They aim for long-term relationships, nurturing loyalty and repeat business.

As Sarda explained, “In digital marketing, we run three types of campaigns. First, there’s the full awareness campaign, where the focus is on reach and interaction. Then, we have performance campaigns, which are primarily aimed at driving conversions. Finally, click-through rates come into play for mid-funnel campaigns, where engagement is the key focus."

The digital advertising lifecycle begins with campaign planning, where marketers define goals and identify target audiences. They then create engaging content and select ad formats before launching the campaign across various digital channels. As the campaign runs, click-through rates (CTR) are monitored to gauge engagement, leading to optimisation efforts like A/B testing and refining targeting. Once the campaign concludes, marketers analyse performance metrics, including conversion rates and return on investment (ROI), to derive insights for future strategies. But the ultimate goal extends beyond immediate clicks or sales; it’s about fostering long-term customer relationships and building brand loyalty.

“CTR remains valuable in scenarios where quick engagement or awareness is the primary objective—such as for e-commerce campaigns, direct response ads, or time-sensitive offers. But even then, marketers should ensure that CTR is evaluated in conjunction with deeper metrics like CAC (Customer Acquisition Cost), ROAS (Return on Ad Spend), and even post-click actions to truly understand the effectiveness of their campaigns,” said Rajiv Dingra, Founder and CEO at ReBid.

“For businesses with a shorter sales cycle, such as e-commerce or specific B2C categories, CTR can have a more direct impact on sales. However, for companies focused on long-term brand building, or those with a more complex customer journey, metrics like engagement, lifetime value, and conversion attribution offer far greater insight than CTR,” explained Dingra. 

He further said that the importance of CTR varies depending on the brand's objectives, target audience, and the nature of its products or services. He said, “Different types of brands prioritise click-through rates (CTR) based on their business models. Direct-to-consumer (D2C) brands rely heavily on online transactions. On the other hand, business-to-business (B2B) brands might place less emphasis on CTR alone.”

According to Gaurav Barjatya, Head of Marketing at NDTV Network, the moment you turn off the tap, you might not get those customers back. 

“So, any brand that is actually running bottom-of-the-funnel campaigns, their usage for CTR-based campaigns would be much optimised as compared to a brand that is unsure where it is in the top to middle to bottom-funnel approach,” he commented.

“When discussing click-based campaigns, we’re largely talking about the bottom funnel, where action tracking is key. These worlds need to come together because relying solely on clicks won't provide a holistic view,” he added. 

Barjatya thinks that over the years, click-based campaigns largely at the bottom funnel consider action tracking as the key. He said, “Brands running bottom-of-the-funnel campaigns will optimise their use of CTR-based strategies far more than those unsure of where they stand in the funnel.”

In addition to CTR, other essential metrics include Return on Ad Spend (ROAS), which measures the revenue generated for every dollar spent on advertising, and Customer Acquisition Cost (CAC), which evaluates the cost of acquiring a new customer. Marketers also track engagement metrics like impressions and brand awareness, as well as customer lifetime value (CLV) to assess long-term profitability. In this lifecycle of campaign mapping, there are aspects beyond just measurement and metrics — like ad formats (eg. display ads) and platforms (eg. social media). Each of these also plays a critical role in shaping effective advertising strategies to suit the broader objectives of a brand.  

On a similar note, a very recent LinkedIn post also sparked a debate on Tom Goodwin’s feed.  His original post argued that with an average CTR of even just 0.0392%, the industry's obsession with optimising this metric is not only misguided but wasteful. It claimed that extensive resources are dedicated to improving CTRs, even though numerous studies show they have no real impact on sales, brand awareness, or consumer intent. This assertion resonated with many, igniting discussions around the efficacy of current advertising strategies.

Dolly Jha, an industry leader in audience measurement, commented on the post, “Valid point, strongly put up. CTR is an inadequate KPI; it is overtalked and has no relevance to sales conversion. Many other aspects of ad performance do, and I am glad that smart marketers recognise this well.” 

One comment discussed the absurdity of marketers obsessively trying to optimise click-through rates (CTRs) despite their lack of correlation with meaningful outcomes like sales or brand awareness. It emphasised that much effort is spent improving CTRs, but these metrics often don’t translate into any real business impact. 

A major shift in modern marketing is the move towards more comprehensive metrics that map the entire customer journey. 

Dingra concluded, “Marketers need to look beyond CTR and focus on a multi-metric approach—blending it with metrics like viewability, engagement rates, and data-driven attribution. Also, the rise of AI and machine learning allows marketers to get far more granular insights on the true performance of their campaigns across channels, helping them move past traditional metrics like CTR.”