How is a conversion rate defined?
- Number of impressions ÷ Number of conversions as a %
- Number of clicks ÷ Number of impressions as a %
- Number of conversions ÷ Number of clicks as a %
- Number of clicks ÷ Number of conversions as a %
Explanation: The correct definition of click-through rate (CTR) is Number of clicks ÷ Number of impressions as a %. Click-through rate is a fundamental metric used in online advertising to measure the effectiveness of an ad campaign in generating clicks relative to the number of times the ad was shown (impressions). By dividing the total number of clicks an ad receives by the total number of times it is displayed (impressions), and expressing the result as a percentage, CTR provides valuable insights into the relevance and appeal of an ad to its target audience. A higher CTR indicates that the ad is resonating well with users and enticing them to click, reflecting better engagement and potentially higher conversion rates. Therefore, understanding and optimizing click-through rate is crucial for advertisers to gauge the performance and effectiveness of their ads in driving user engagement and achieving their advertising goals.