PPC Benchmarks: What is Your Industry's Average Conversion Rate?

PPC Benchmark Data

A PPC advertising strategy can be a great way to reach audiences that would’ve taken years to reach with an organic strategy.

It’s a great entry point for businesses on a budget and allows businesses to have a sense of full control, with the ability to pull ads quickly if they’re not working, edit ads quickly, and control what they spend.

However, one of the biggest challenges of PPC advertising is interpreting performance.

Sure, Google AdWords and Facebook provide you with plenty of tools and insights to measure performance, but how do you know what is an acceptable CPC, CTR or Conversion Rate?

Each industry is different, with different needs to address in the market, and consequently, different PPC strategies and KPI’s. What may be a suitable Cost per Acquisition for a real estate agency could be outrageous for a fashion retailer.

And what you think is a good CTR doesn’t necessarily mean you’re standing up to competitors results in your industry.

The only way to really understand if your PPC campaigns are performing well is to place yourself in context of your industry, and compare your performance to known benchmarks.

So, how does your brand compare to your industry’s average this year?

Let’s start with the benchmarks from Google AdWords.

Average Click Through Rate (CTR) for Google AdWords

Google Adwords Average CTR

PPC Ad viewers in the Dating & Personals industry are quick to click, particularly in search, while users seeing Legal Ads tend to be a bit more conservative.

Additionally, the average CTR of Search campaigns is nearly 5-6x higher compared to their Display counterparts.

Average Conversion Rate for Google AdWords

Google AdWords Average Conversion Rate

Conversion rate benchmarks for Google Adwords is possibly the single most transparent and revealing metric about campaign performance.  How effective is your ad at meeting your goals?

For Advocacy businesses, it is far more interesting to invest in Paid Search Ads as they tend to be higher converting, while it maybe be worthwhile for Home Goods brands to explore Display Ads. The Finance industry has a conversion rate 2% higher than any other industry for Paid Search Ads.

Average Cost Per Click (CPC) for Google AdWords

Google AdWords Average CPC

One of the most puzzling questions for online marketers is how to evaluate CPC. This data can help you to know if your ads are costing too much, or if they’re right on the money.

A CPC that is too high for your industry means you should go back to the drawing board and reconsider your strategy.

While the average CPC can be a benchmark that you can compare to, it may not lead to any conversions and therefore may not align with your marketing budget.

It’s also interesting to note that while Search campaigns tend to receive more clicks, they also result in a higher Cost Per Click than Display Ads.

Average Cost Per Action (CPA) for Google AdWords

Google AdWords Average CPA

Marketing may be rapidly growing and maturing with the movement towards digital, but the core principles are the same as ever. Marketers want to know, how much does it cost to make someone act?

Naturally, Cost Per Action, or Cost Per Acquisition, varies greatly by the monetary or perceived value of whatever it is you’re selling. Some industries have a lower CPA from Search, while others experience better results from Display. It’s noticeable though that by industry, the Cost Per Acquisition rates differ greatly on the Paid Search and Google Display Networks.

Now let’s take a look at the 2017 benchmarks from Facebook’s Ad Platform.

Average Click Through Rate (CTR) For Facebook Ads

Facebook Ads Average CTR

There are many different types of Facebook Ads, including newsfeed ads, side bar ads, dark posts, and more. These results are based on a comprehensive analysis of all types of Facebook ads.

The data shows that Facebook adverts are highly effective for retail and apparel brands, and quite surprisingly, for legal services as well.

Overall, businesses experience a lower click through rate on Facebook compared to Google Paid Search ads, but a higher CTR than Display Ads.

Average Conversion Rate for Facebook Ads

Facebook Ads Average Conversion Rate

The Average conversion rate occurring across Facebook Ads in all verticals is significantly higher that that of Google AdWords. This means that of the users who are clicking on the ads, 9.21% of them are completing the desired action, or conversion. Meanwhile, only 2.7% of viewers convert on Search Ads, and a mere 0.89% convert on Display.

This is likely because of Facebook’s sophisticated targeting features that allow marketers to narrow in on specific audience segments and deliver highly targeted ads. This is how Fitness brands are able to achieve such high average conversion rates.

Average Cost Per Click (CPC) for Facebook Ads

Facebook Ads Average CPC

While Facebook ads receive fewer clicks on average than Paid search ads, the cost of these clicks is less, making Facebook a lucrative platform to continue investing in.

The industries that reportedly have the highest average CPC for Facebook ads are Finance & Insurance, followed by Customer Services, then Home Improvement.

Average Cost Per Action (CPA) For Facebook Ads

Facebook Ads Average CPA

Facebook Ads also have a much lower average CPA than Google AdWords. The industries with the lowest cost per action are Education, Apparel, and Fitness. The verticals spending the most are Technology, Home Improvement, and Auto.

Building a PPC Strategy

The best PPC strategies take a holistic approach, incorporating multiple ad types from AdWords, Facebook, and other Platforms to create a recipe that works just right for your brand.

Benchmarking is a great way to keep your PPC strategy on the right track. This data is also incredibly valuable in defining your objectives before starting a PPC campaign, and determining an appropriate budget.

Optimizing Your Results

When running your campaign, it is recommended that you commit to a three-month period. This is in order attain the data you need to optimize your campaign.

The more data you collect, the more data you can use to direct a future strategy, increase your budget, and up your commitment to a PPC-centred digital marketing strategy, in the hope of surpassing industry benchmarks and achieving your desired return on ad spend (ROAS).

Scaling Your PPC Team

From constructing the strategy to evaluating it’s performance, PPC Advertising can be a challenge. However, most brands know that the ROAS is well worth it.

Working with an agency allows you to instantly scale the size and experience of your online advertising team.

 

Get the White Paper Version

Conversion Rate Optimization Stats

Download here the printable and shareable version as a White Paper.

 

Contact Codedesign to get in touch with an expert.

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