PPC Study – Google AdWords Industry Benchmarks
The following article is based on a case study completed by Wordstream, a company that develops Search Marketing Software for PPC advertisers. MGR utilizes WordStream tools synced-up with Google AdWords and Bing on a regular basis to optimize our clients PPC campaigns. I strongly recommend that you read and review the article below to view the latest industry benchmarks and analyze how your own paid campaigns rank against them. And of course, if you have any questions or comments, you can also reach our MGR SEO Team for assistance.
Google AdWords Industry Benchmarks
Whether you’re doing PPC for the first time or you’ve just signed a new client, it can be daunting to know whether or not you’re doing a good job. Sure, we all want to create unicorn ads that have highest CTRs and the best conversion rates, but what’s a good metric for one industry isn’t necessarily good for another. So what numbers should you be looking to beat in your industry?
We dug into our data to find out! Check out the Google AdWords industry benchmarks our clients are seeing, including:
- Average Click-Through Rate (CTR) in AdWords by industry, for both Search and Display
- Average Cost per Click (CPC) in AdWords by industry, for both Search and Display
- Average Conversion Rate (CVR) in AdWords by industry, for both Search and Display
- Average Cost per Action (CPA) in AdWords by industry, for both Search and Display
You’ll find averages across these AdWords metrics for twenty industries: Advocacy, Auto, B2B, Consumer Services, Dating & Personals, E-Commerce, Education, Employment Services, Finance & Insurance, Health & Medical, Home Goods, Industrial Services, Legal, Real Estate, Technology, and Travel & Hospitality.
(A HUGE thank you to Bekah Wheeler, our partner marketing specialist, who put her considerable graphic design skills to work for these graphics.)
Average Click-Through Rate in AdWords by Industry
Dating and personal services really click with PPC – boasting an average search CTR of 3.40%! No doubt, it’s easy to write powerful emotional ad copy when your prospects are searching for love. Other industries with high search CTRs include Finance (2.65%), B2B (2.55%), Consumer Services (2.40%), and Technology (2.38%).
Legal services struggle to attract attention on the SERP (with a relatively low average 1.35% CTR)– in large part due to advertising restrictions enforced by both Google and government organizations. Legal advertisers have to be extra smart and crafty to do well in PPC. Other industries that often have poor CTRs are eCommerce (1.66%) and industrial services (1.40%).
Tech companies should find a lot of reach with strong CTRs (0.84%) on the display network, as many apps host display ads with high CTRs for these products and services. On the flip side, employment service advertisers have struggled on the display network to create ads to entice potential job searchers and typically have poor performance, averaging a 0.14% display CTR. Maybe they fare better on LinkedIn!
The average click-through rate in AdWords across all industries is 1.91% for search and 0.35% for display.
Average Cost Per Click in AdWords by Industry
It’s no surprise that legal services have some of the highest CPCs on the search network. Both “Lawyer” and “Attorney” make the top 10 most expensive keywords on Google and on Bing. Average CPCs in the legal industry are $5.88 – 40% more costly than the next most expensive industry, employment services ($4.20 CPC).
Advocacy and nonprofit groups have a cost per click just under $2, likely as a result of the $2 max CPC bid Google Grant advertisers have to set on all of their keywords.
Whereas most industries have pretty inexpensive CPCs on the Google Display Network, the Employment Services industry is a notable exception – paying $1.66 per click on GDN. No doubt, some of their troubles stem from their abysmal CTRs on Display (0.14% CTR) which hurts their display network quality score, making them pay considerably more per click.
The average cost per click in AdWords across all industries is $2.32 for search and $0.58 for display.
Average Conversion Rates in AdWords by Industry
The Finance and Insurance industries convert amazingly well on both the search (7.19% CVR) and Display (1.75% CVR) networks. In many of these cases, the best converting advertisers aren’t afraid to change their offer or their conversion flow to boost their conversion rates.
Home Goods and Real Estate are conversion rate standouts on the Display network (2.19% and 1.49% respectively), no doubt because both are visual industries where a sexy picture can inspire people to click and investigate.
Ecommerce clients may not have many options to change their offer and consequently suffer one of the poorer average search conversion rates (1.91% CVR). To boot, they often have gigantic inventories, which prevents doing fine-tuning on ad copy across all ecommerce keywords. While removing barriers to purchase will always be an important CRO tool to help ecommerce clients, AdWords advertisers should focus on improving the performance of their keywords with high commercial intent to yield the most out of their search campaigns.
The average conversion rate in AdWords across all industries is 2.70% for search and 0.89% for display.
Average Cost Per Action in AdWords by Industry
(Almost) free love on the SERP! Dating and personal sites have, by far, the lowest average cost per action from search ($6.91 CPA). While Google may be a great place to find a boyfriend, it is an expensive place to find an employee, doctor, or lawyer – average search CPAs for employment services, medical services, and legal services are $105.79, $126.29, and $135.17, respectively. Of course, the lifetime value of a new client in these industries is very high, making it all worthwhile in the end.
On the display network, technology companies take an easy win with CPAs below $20 ($19.23). While it should be obvious that Google and Technology pair well together, this is also in no small part due to the success of tech advertisers promoting their app installs across the search and display networks.
The average CPA in AdWords across all industries is $59.18 for search and $60.76 for display.
What Does It All Mean?
If you find yourself on the lower end of these numbers, that just means there’s plenty of room for improvement! Try running our free Google AdWords Grader to diagnose exactly where your campaigns are failing when compared to peers in your industry. If you’re hitting these benchmarks – don’t stop and settle for average either! Always strive to be a unicorn by writing the best ad copy and creating landing page unicorns that convert better than anyone else!
This report is based on a sample of 2,367 US-based WordStream client accounts in all verticals (representing $34.4 million in aggregate AdWords spend) who were advertising on Google AdWords’ Search and Display networks in Q2 2015. “Averages” are technically median figures to account for outliers. All currency values are posted in USD.
About the author:
Mark Irvine is a Data Scientist at WordStream with a background in SEM, SEO, and Statistical Modeling.