CTR stands for Click-Through-Rate.
In other words: Imagine that 100 people view your product in their search results or via the recommendation engine. Of those 100 people, 3 of them click on your product. This gives you a Click-Through-Rate of 3%.
So, CTR is all about the number of eyeballs that see your product and the number of fingers that decide to click on it, together creating a percentage known as CTR.
CTR is one of the most important metrics of the Amazon algorithm. More important than, dare I say it, CVR (Conversion Rate). Here’s why:
Imagine that you have a CVR of 80%. Out of 5 sessions (number of people viewing your product detail page), you sell 4 units. A CVR of 80%? Sign me up, please!
But wait… Let’s consider the numbers a little closer.
If there are 20.000 people viewing your product and only 1 of them is clicking on it, you have a CTR of 0,005%. Meaning that for every 5 sessions on your product detail page, you need 100.000 people to view your product. If that’s the case, then something is not going according to plan.
Suppose that you could increase your CTR to 1%. This would mean a world of difference. For every 20.000 people viewing your product, there are now 200 people clicking on your product detail page (200 sessions). If your CVR is still 80% that would mean selling 160 units per day.
But even if your CVR dropped to 30%, the number of units sold per day would still be higher compared to the 80% CVR on a 0,005% CTR: 60 units.
The second reason sounds less obvious than the first reason, but I’ll clarify with this explanation.
Amazon has one goal in mind that they build their entire algorithm around: To get the highest revenue per visitor. With that in mind, what products do you think Amazon will put at the top of the search results? (Hint: It’s not the most expensive product.) It’s the products that will generate the highest amount of revenue per visitor. This doesn’t mean that the more expensive the product, the higher it ranks. Nope! The market decides which products and prices they like most. The Amazon algorithm is responding to customer behavior in a way that will generate the highest revenue per visitor.
What generates the highest amount of revenue per visitor, you may ask. Well, I’m glad you asked. Let’s do some math*:
Imagine 1000 searches on the search term “Silicone Baking Mat.”
| CTR | CVR | Number of sales per 1000 searches | |
| Product 1 | 3% | 35% | 10.5 |
| Product 2 | 3.5% | 32% | 11.2 |
*Note: Other elements factor into this equation. For example, RRS (Recommendation Relevancy Score), ETC (External Traffic Conversions), and SSS (Social Sentiment Score). However, for the purpose of this blog, we will focus on CTR and CVR.
Product 2 wins! Since it generates more sales per 1000 searches, this product will have a higher keyword rank for this search term.
Let’s make matters a little more complicated by adding PPC to the mix. The general assumption about PPC is that it gives placements to the highest bidder because the more Amazon can get for the click, the more money they will make. With my next example, I’ll show why this assumption is faulty.
For clarity purposes, assume that every click comes from PPC. Imagine those 1000 searches on the search term “Silicone Baking Mat” again*.
| CTR | PPC clicks | Costs per click | Product price | Amazon fee (15%) | Sales | Amazon’s revenue | |
| 1 | 3% | 30 | $2 | $14 | $2.10 | 10,5 | $82.05 |
| 2 | 3,5% | 35 | $1.80 | $13 | $1.95 | 12 | $86.40 |
*Note: Other elements factor into this equation. For example, RRS (Recommendation Relevancy Score), ETC (External Traffic Conversions), and SSS (Social Sentiment Score). However, for the purpose of this blog, we will focus on CTR and CVR.
Product 2 wins! Even though product 2 is cheaper and has a lower CVR, it still generates more revenue for Amazon. And for those who noticed the lower cost per click: Amazon ‘sells’ the click to product 2 for a lower price, because it has a higher CTR.
Take-home message: Increase your CTR!
There are some easy ways of improving your CTR, but they might not always be your best option in the long term. Such as lowering your price.
Another way — though not as easy — is to develop a product so breathtakingly fabulous that customers are helpless to refuse it. Resistance will evaporate like snow before the sun. This is a surefire way to increase your CTR. However, it’s not feasible in all situations.
Here’s how to increase your CTR. According to Tony Robbins, “There are two things you can change. Procedure or perception.” So if procedure equals the product, perception equals how it is presented. In other words: By changing the way the product is perceived, you can make it stand out. And products that stand out get more clicks. More clicks lead to a higher CTR. And, well, you’re familiar with the rest of the story.
Changing the way your product is perceived sounds more complicated than it is. Think of the most important element that determines your CTR. Your product tile. No, not the title. The tile. The tile of your product combines the main image, price, shortened title, average star rating, and the number of ratings. This is what every customer sees when searching for a product and coming across the search results. So, if you want to improve your CTR, start by optimizing the tile.
Remember this: If it’s bad, you tank. If it’s good, you rank.
To determine how your tile is performing and what you need to improve, you need to test. I’m not talking about A/B testing. No, I’m talking about Rapid Micro Testing. This is a detailed strategy that helps you to improve your CTR in a matter of hours. After investing those couple of hours, your modified tile is ready to take Amazon by storm.
Intellivy has built the Rapid Micro Testing tool to help you (and ourselves) as a way to increase CTR (among other things). It’s not a polling tool on steroids. Instead, it’s a tool to help you strategically improve the way your Amazon tile and listing are perceived by customers. We created clear SOPs that guide you through the tools to help you increase your CTR and organic sales.
The results? Getting products that have been dead in the water for 12 months, going from selling 15-20 units per day, to over 300 units per day in a matter of weeks. Running out of stock twice, and getting back to 250+ both of the times in a matter of days. Product launches from zero to hero in 21 days, selling over 250 units daily with no reviews.
It requires some practice, but trust me, 2023 will be the year of… I’ll hold on to that secret for now. Over the last couple of years, we’ve made several predictions of where we saw the puck going, and they played out perfectly. This time will be no different. Stay tuned.