Click Through Rate vs. Conversion Rate: A Beginner's Guide for Amazon Sellers

Guide for Amazon Sellers

In more than 10 years of my interaction with Amazon sellers, I every day come across the confusion between CTR & CVR. Also, a lot of sellers are unsure of their relevance & why should they focus on these metrics. This short blog explains all this. 

What is Click Through Rate (CTR)?

Click Through Rate (CTR) is a measure of how many people click on your ad after seeing it. It’s calculated by dividing the number of clicks by the number of impressions (how many times your ad was shown), then multiplying by 100 to get a percentage. Simply put, if Amazon published your ad 10 times, it means you’ve 10 impressions. Out of these 10 impressions, if you’ve got 3 clicks to your listing page, your CTR is 30%.

Why is CTR Important?

  • Attracting Attention: A high CTR means your ad is appealing and relevant to shoppers.
  • Ad Performance: Amazon uses CTR to gauge your ad's effectiveness, influencing your ad's placement and cost.
  • Budget Optimization: High CTR helps you spend your ad budget wisely, focusing on ads that draw interest.

How to Improve CTR: On a search page there are 6 aspects of your listing which show up. These are same irrespective of an organic search result or sponsored. We need to optimize these for improving our CTR.

  • Eye-catching Images: Use high-quality, relevant images. Especially your main image. Spending time on ensuring your main image stands out is the key to success.
  • Compelling Titles: Write clear and engaging titles. Sometimes, your complete title doesn’t show up in the search results. This is why it is important to also add all the most important bits in the front of your title. Especially if you’ve any USP.
  • Social Proof: As your reviews increase, you see your CTR improving as well. This is why its important to have a dedicated reviews strategy for every listing on Amazon.
  • Coupons: Existing deals or coupons also show up in the search results enhancing CTR. So, test different deals & coupons & measure their effectiveness.
  • Price: We should have a pricing strategy in place like competitive pricing or value pricing. But more importantly, we should be able to convey to customers why do we charge what we charge.
  • Prime: More than 70% of the traffic on Amazon is Prime members. So, if your listing doesn’t have the Prime badge, expect to see lower CTR numbers.

What is Conversion Rate (CR or CVR)?

Coversion Rate

Conversion Rate measures the percentage of clicks that result in a sale. It’s calculated by dividing the number of sales by the number of clicks, then multiplying by 100 to get a percentage. For examples, if you got 100 clicks or visitors to your Amazon listing & out of them, you saw 20 sales coming in, your CVR is 20%.

Why is CVR Important?

  • Sales Effectiveness: A high CVR indicates that your product page is convincing shoppers to buy.
  • Profitability: High CVR means more sales from fewer clicks, maximizing your return on investment (ROI) & decreasing your ACoS.
  • Ad Optimization: Amazon rewards ads with high CVR by improving their visibility and lowering costs. So, higher CVR is directly responsible for lowering your CPC (Cost per Click).



How to Improve CVR: Majority of your audiences will look at only 3 aspects of your listing before making a buying decision.

  • Images: Product images, videos, A+ content images, brand images are the most important part for a purchase decision. So, ensure you’ve high quality images before you start selling on Amazon.
  • Customer Reviews: Encourage satisfied customers to leave positive reviews. If you have poor rating or less number of reviews, a buyer is highly likely to go back to the search page, wasting your ad spend & click. So, have a dedicated reviews strategy in place to ensure you’ve good social proof on your listing page. Variety in reviews also helps. So, you should ideally have a mix of text, image & video reviews. 
  • Value Pricing: Some people focus on the lowest or competitive pricing. But we see again & again Amazon customers not being averse to higher priced products. Like William Painter sells sunglasses upwards of $200 on Amazon. Or their are lots of luxury watch brands selling watches worth thousands of dollars on Amazon. So, its not about cheap pricing, but value pricing on Amazon. If you’re able to tell a compelling story, Amazon buyers are ready to invest in your brand. 

All other aspects like title, description, bullets are also important on a listing. This is why AMZPro always recommend having highly optimized listing before we start sending paid traffic to them.

Balancing CTR and CVR

CTR and CVR

Both CTR and CR are vital for a successful Amazon ad campaign. However, focusing solely on one can lead to pitfalls.

  • High CTR but Low CVR: This means people are clicking your ad but not buying. It could be due to misleading ads or poor listing pages. Look at the suggestions above to improve your listing pages. 
  • High CVR but Low CTR: This means people who click are buying, but not many are clicking. It could be due to unappealing ads or irrelevant keywords. Improve your ad appearance by using the “How to improve CTR” suggestions above.

Striking the Right Balance:

  • Ad Relevance: Ensure your ad accurately represents your product.
  • Landing Page Quality: Make sure your product page is optimized for conversions.
  • Continuous Testing: Regularly test different images, titles, and descriptions to see what works best.

Statistics to Consider

  • CTR Benchmark: The average CTR for Amazon ads is around 0.41% .
  • CVR Benchmark: The average CVR for Amazon ads is approximately 9.87% .
  • Ad Spend Efficiency: High CTR and CVR can reduce your cost per acquisition (CPA) by up to 50%.

Conclusion

Understanding and optimizing both Click Through Rate and Conversion Rate are crucial steps for new & old Amazon sellers. They help you measure the effectiveness of your ads and ensure you're spending your budget wisely. By balancing these two metrics, you can improve your sales and grow your Amazon business. Remember, continuous testing and optimization are key to finding what works best for your products.

Happy selling, and may your ads bring you many clicks and conversions

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Amit Bhaskar

CEO

Team | AMZ Pro

Amit is the co-founder of AMZPro. He has been helping businesses succeed on Amazon since 2014. He also holds a lot of certifications from Amazon like ATES (Amazon Trained Ecommerce Specialist) & Amazon Ads Expert. He has worked with 100s of small & medium businesses around the world so as to make their Amazon dream come true. He is also a big believer of e-commerce & believes that soon the world will shift to mostly ecomm from mostly retail (brick & mortar stores) as of now. He also loves hiking & off-roading.

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