What Are CVR and CTR?
When it comes to understanding mobile advertising, there are loads of abbreviations, technical terms and words that seem to have been invented to be deliberately confusing!
To help you navigate all the jargon and buzzwords, we’ve created this series of posts that give you all the essential information you need as clearly as possible.
What is CVR?
CVR is an abbreviation of Conversion Rate. The conversion rate is the measure of what proportion of people are persuaded by advertising to take a particular action – such as clicking on a link or making a purchase.
If you are running an in-app advertising campaign for a mobile game, the Conversion Rate will be the percentage of people who see your ad and end up downloading the game. So CVR is a simple way of measuring how many people were ‘converted’ after seeing an ad.
What type of advertising campaign you decide to run affects what action or result your Conversion Rate indicates. For example, if you run a campaign aimed at getting people to install an app or game, your CVR will be what percentage of people seeing the ad went on to install the app. If your ad campaign is designed to get people playing a game they already have installed, then the CVR will measure the percentage of engagement events driven by the ad.
How do I work out my CVR?
Working out the Conversion Rate of an ad campaign is pretty simple. You just need to divide the number of people who converted by the number of people who clicked on the ad, then multiply that number by 100 to give you the percentage.
For example, if 1000 people saw an ad telling them to install a game, and 20 of them did so, then the CVR would be 2%.
What is CTR?
CTR stands for Click-Through Rate. It’s the percentage of people that click on your advert. It’s probably the most common measurement used for any form of digital advertising. Often, Click-Through Rate is used in conjunction with other forms of measurement to build a detailed picture of how an advertising campaign performed. That’s because, when used on its own, CTR doesn’t tell us very much about how or why a campaign is effective.
How do I work out my CTR?
Calculating your Click-Through Rate is done in exactly the same way as working out your CTR. You divide the number of clicks by the number of impressions (i.e. how many times the ad has been shown), then multiply that number by 100 to give you the percentage.
For example, if your ad is shown 50,000 times, and it is clicked on 500 times, then the CTR is 1%
Using CVR and CTR together
Click-Through Rate is often used to measure how many people see and interact with an advert, but it doesn’t tell you what they do after clicking. Conversion Rate is a better way to measure when someone takes a specific action, driven by an advert. So using CTR and CVR together helps to build a more detailed picture of how your ad campaign is performing.
For example, a high CTR but a low CVR could mean that your ad creative is very eye-catching, but the people clicking on the ad are not the right demographic for what you are advertising. Conversely, a low CTR but high CVR might indicate that your ad is capturing higher quality traffic, but isn’t being shown in the right place. Getting the right balance often requires lots of trial and error.