Many factors come into play when it comes to paid advertising. Those new to the game often think achieving skyrocketing click-through rates (CTRs) and conversions means they’re doing a good job. But that’s not always the case for every industry.
To get the most return out of their pay-per-click (PPC) campaign, businesses should learn which metrics to focus on and exert the most of their efforts. Otherwise, they’ll end up inflating their budget to no avail.
Now, the question is””what are the metrics and figures to benchmark for every industry? The following data will help business owners and advertisers compare and improve their Google Ads campaigns.
Average Cost per Click (CPC)
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CPC is a metric that measures the cost an advertiser pays to the publisher (e.g., Google) each time their ad gets clicked. This varies depending on the competition for a certain keyword and is crucial to their bidding strategy.
Based on the above statistics, CPC for paid search across all industries ranges from $1.40 to $8.67, with an average CPC of $3.53.
Travel, arts and entertainment, and sports and recreation industries have the lowest CPCs, with $1.40, $1.60, and $1.73, respectively.
Meanwhile, legal, dental, and home improvement industries have the highest average CPCs, with $8.67, $6.49, and $5.75, respectively. These findings are consistent with previous reports as legal services fall under a high-value industry.
How to Lower CPC and Maximize Ad Spend
For businesses, the goal is to lower their CPCs to maximize their advertising budget. To achieve this, they should first work on improving their quality score.
Quality score determines the quality of the ad, its keywords, and its landing page. The higher its quality, the lower its CPC, and the better its position on search engines.
There are several ways advertisers can improve their quality score, which include the following:
- Making sure the ad is highly relevant to the keyword and search query they’re bidding on
- Improving their landing page with clear copy and consistent messaging
- Establishing trust by highlighting reviews and testimonials via the landing page
- A/B testing ads with different headlines, selling points, and calls-to-action (CTAs)
- Building their account on highly targeted ad groups
- Analyzing competitor ads and learning from them
- Improving their click-through rate (CTR)
CPCs don’t lower overnight. It involves different strategies that require trial and error. But many businesses don’t have the time and expertise to monitor and improve their campaigns. In such cases, it’s best to place their advertising in the hands of experts. Hiring a reliable Google Ads agency can take a lot of the work off their plate, giving them more time to focus on running their business.
Average Click-Through Rate
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The CTR is another important metric to consider when measuring how well an ad is performing. It measures how often a person who sees an ad is likely to click it. It is measured by the number of clicks divided by the number of times an ad is shown.
CTR = clicks / impressions âœ• 100
For example, if an e-commerce ad has 10 clicks after being seen 200 times, the CTR would be 5%. CTR heavily depends on an ad’s quality score. But many factors contribute to this metric.
According to the above figures, CTRs across all industries range from 3.84% to 19.67%, with an average of 6.18%. The industries arts and entertainment, travel, and sports and recreation have the highest averages, with 10.67%, 8.54%, and 7.73% of CTR, respectively. As with previous benchmark reports, the numbers have been consistently high for these industries.
The lowest average CTRs are on attorneys and legal, home and home improvement, and dental services, which got 3.84%, 4.21%, and 4.69%, respectively.
How to Boost CTR for the Business
A low CTR can mean many things. The ad may be targeting the wrong audience or may not target their specific pain points.
To improve the CTR, advertisers should focus on improving their quality scores. Some of the best practices that effectively boost a campaign’s CTR are as follows:
- Optimizing the headline and copy. Use relevant keywords but include them seamlessly within the copy.
- Write a compelling CTA. It should be clear and direct to the point.
- Optimize the ad image. Visuals greatly influence clicks for an ad. Run A/B tests using different image copies and designs to learn what works best.
- Use hashtags. Hashtags attract views. Spend some time researching trending hashtags, and use ones that are relevant to the campaign.
Average Cost per Lead
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Also known as cost per action, cost per lead is how much was spent per conversion. In other words, this shows the cost of an ad for every time someone takes its desired action””which can either be to make a purchase, fill out a form, or contact a business.
Across all industries, the average cost per lead is $41.40, from a range of $14.88 to $73.70. This means each conversion costs a business $41.40.
Legal services took the top spot for the industry, with the highest cost per lead at $73.70. Furniture came next with $64.72, and finance and insurance with $62.80.
Meanwhile, animals and pets got the lowest cost per lead at $14.88. Automotive got the second lowest at $17.81, then restaurants at $20.49.
Based on Wordstream’s past reports, the current overall average is lower compared to the previous figures. This is great news for businesses that want to make the most of their advertising budget.
How to Lower Cost per Lead for Paid Ads
Advertisers should aim to reduce their cost per lead to save on advertising costs. Here are some tips and tricks businesses can achieve this goal:
- Use analytics and eliminate poor-performing digital marketing channels.
- Narrow the customer profile and find an in-market demographic for their products and services.
- Optimize campaigns to reduce poor-quality leads. Advertisers can either lower bids or review and change up keywords.
- Write specific ad copies. For example, include specific details, such as the price and product type, to avoid confusion among potential customers.
Average Conversion Rate
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Conversion rate measures how many people actually clicked on an ad and converted or followed the desired action. For example, a consultation service puts up an ad leading to a “contact us” form. Its conversion rate is the percentage of people who clicked on an ad and actually booked a consultation with them.
Based on the report, the average conversion rate across all industries is 8.82%. This is according to a range of 3.25% to 19.19%.
Animals and pets have the highest conversions at 19.19%. Physicians and surgeons follow this at 19.15% and auto services at 15.23%.
Meanwhile, industries with the lowest conversion rates include furniture, apparel and jewelry, and real estate, with figures at 3.25%, 3.6%, and 3.93%, respectively. These industries have been consistent in their placements when it comes to conversion rates.
How to Improve Conversion Rate
The million-dollar question marketers and advertisers ask among themselves continues to be on how to improve conversion rates.
Optimizing for conversions is important for advertisers as it allows them to keep their customer acquisition costs low while getting the most value from their current site visitors. The goal is to increase revenue per visitor, drive more customers, and grow the business.
Before applying steps to optimize conversions, the first step is identifying a business’s conversion goals. This will depend on the industry and type of business.
Here are common conversion goals for every industry type:
- E-commerce. E-commerce businesses often look at product sales, cart completion rates, and newsletter sign-ups. Business owners who want to start their own online store should be able to optimize their website to boost these factors.
- Travel. Conversions may include the number of bookings, purchases, or social shares.
- B2B. Marketers can look at deals closed and the number of leads generated through bookings and consultations.
- Media and other brands. Other conversion goals include ad views, page views, downloads, engagement, and newsletter subscriptions.
Effective Tips to Supercharge the Conversion Rate
Low conversion rates can mean many things, mainly stemming from a poor-performing landing page. Here are some proven ways to make an ad more compelling:
- Add a pop-up of an enticing offer to your site.
- The fewer the form fields, the better.
- Strengthen social proof with real reviews and testimonials.
- Eliminate distractions that will only make visitors steer clear of the CTA.
- Add an appealing offer that resonates with the market.
There’s no one-size-fits-all formula for advertising, so businesses need to leverage data analytics to measure and improve their advertising performance.
With these benchmark figures, advertisers will be able to focus on the metrics that best work for their industry, analyze how it adds up to their current ad strategies, and work on ways to boost their results in future campaigns.