Next to niche selection, traffic source is the most important factor in determining CTR.

Where your traffic originates significantly affects your CTR.

Here are some of the usual traffic sources, ranked in order of CTR:

  1. Referring Sites
  2. Search Engines
  3. Direct Traffic

Referring Sites

Referring sites tend to deliver the best CTR, because a person who clicked a link to get to your site is more likely to click a link to go to another site.

Of course, not all referring sites are equal. Traffic from Digg or Slashdot is almost worthless in terms of CTR. The best referrers in terms of CTR are almost always other sites in your niche, because the people who come in from those sites are usually actively searching for something.

Search Engines

Traffic from Search Engines delivers about 20% less CTR than traffic from referring sites. But, not all search engines are the same!

Here are the major search engines, ranked in terms of CTR:

  1. AOL
  2. MSN
  3. Live
  4. Yahoo
  5. Google

Or, in more meaningful terms:

  • Yahoo traffic delivers 2.11 times the CTR of Google traffic
  • Live traffic delivers 2.38 times the CTR of Google traffic
  • MSN traffic delivers 2.86 times the CTR of Google traffic
  • AOL traffic delivers 3.04 times the CTR of Google traffic

Now who wants to ignore MSN when doing search engine optimization?

Direct Traffic

Direct traffic generates just over half the CTR of referred traffic.

Direct traffic comes from people who already know about your site. These people have seen your site before and are better at mentally filtering out your ad placements.

CTR from direct traffic can be improved by periodically changing your ad layout.