Business Understanding

In this entire demonstration, you’ll be looking at an important business metric used in the e-commerce industry, that is the Click-through Rate popularly known as CTR. On this metric, you’ll be making claims and hypotheses and then test them using the concepts that you learnt in the previous two sessions. Before getting into the hypothesis testing part, let’s understand what CTR means, and how specifically, you are going to use it in this demonstration.

Thus as you saw, the Clickthrough Rate is a pretty generic yet important term in the online marketing industry. In plain terms, it measures the action rate of some entity – may it be a banner ad, a home page of some website and so on. Now let’s understand how the Click-Through Rate or CTR can be defined in the search context.

So in the case of online search, the CTR is the proportion of searches that were successful. When you’re trying to compute the Search CTR, the relevant formula is given as –

Search CTR=Total number of successful searches/ Total number of searches

Now in the next segment, you’ll be introduced to the problem statement.

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