The difference between CTR and conversion rate – and other metrics questions answered
Top questions and answers from our recent Metrics and Analytics webcast
June 13, 2016
Our recent Crash Course in Metrics and Analytics webcast generated a huge response with lots of jargon-busting questions on what marketing metrics really mean, what they should be used for, and how to present them internally to help get things done. LinkedIn’s Senior Manager, Demand Generation Amanda Halle and Senior Content Marketing Manager Megan Golden did a great job of answering them. Here are some of the highlights – the metrics and analytics questions you most want answered:
What’s the difference between click-through rate (CTR) and conversion rate?
The click-through rate for any piece of marketing activity is the number of clicks that it generates as a percentage of the number of impressions that were served. It’s frequently used in display ad and email campaigns (for email, the total number of clicks is usually divided by the number of emails delivered), but applies to Sponsored InMail and Sponsored Content as well.
Conversion rate takes things a stage further by looking at a definite action that you want those clicks to result in. This might involve filling out a data capture form or downloading a piece of content. Your conversion rate is the number of people taking this action as a percentage of the number of impressions – so you would expect it to be lower than the CTR for a given campaign.
As Amanda and Megan stressed on our webcast, it’s often important to look at these two metrics together – and not take CTR in isolation. A relatively low CTR isn’t necessarily a bad sign if your conversion rate is beating benchmarks and delivering against your objectives. It could simply mean that you’re using a specific call to action that is driving very targeted traffic. Bear in mind that for cost-per-click (CPC) campaigns this is likely to result in higher Return on Investment (ROI) than driving lots of clicks with a low conversion rate.
What does MQL stand for?
MQL stands for Marketing Qualified Lead. The key difference between this and a general lead or inquiry is that it meets certain criteria that help to identify whether the lead is relevant to your business.
The definition of a Marketing Qualified Lead naturally varies from business to business depending on the characteristics that identify your most likely prospects. The test often combines background information that confirms somebody is in your target market with specific actions that suggest they are interested in your business. If you are selling enterprise-level software, for example, a MQL might be somebody from a company of 1,000 people or more (confirming they have relevant scale for your solutions), who has visited a landing page and downloaded a piece of content (confirming they have an interest in your business).
How do you work out cost per lead (CPL)?
The cost per lead (CPL) for a campaign is the total cost of a campaign divided by the number of leads or inquiries that it generates. It can be a very effective way of comparing the performance of different campaigns and tactics focused on lead generation. A good starting point is to calculate the CPL for recent campaigns that you’ve run and establish a sensible average or benchmark for your business. You can then use this to test how different approaches to generating leads perform.
How do you deal with last-click attribution?
Moving beyond last-click attribution, which gives all credit for a lead or conversion to the last piece of activity that they engaged with, is one of the great challenges in marketing measurement. Amanda and Megan couldn’t provide a simple answer to this one (nobody really can) but they did have lots of suggestions for how you can recognise the contribution of upper funnel marketing to building awareness and interest. Easily accessible metrics for the contribution that upper funnel activity is making include lifts in website referral and traffic, increases in branded search and the engagement rates that your content generates.
What’s the best way to share metrics with your leadership team?
Context is the key here. A CTR or conversion rate in isolation is hard for executives to make sense of. Demonstrating how these metrics compare to your benchmarks and what this means in terms of your overall marketing objectives is far more useful – and ultimately more actionable. Focus on change over time, zero in on the most important and significant details and bring out the ‘so what’ as well as the ‘what’.
Our full Crash Course in Metrics and Analytics eBook has detailed answers for these and other marketing measurement questions. It reveals how to choose the right metrics for your marketing objectives, and how to analyse those metrics in ways that will drive campaign performance. Click here to download the Crash Course in Metrics and Analytics.