You’ve been thinking about giving AdWords a shot to help increase your brand’s reach and so far, things have been going well. Google AdWords is a popular online advertising platform that’s proven to deliver great results when you use the correct PPC (pay-per-click) management strategy and investment. The PPC statistics are eye-opening and the numbers suggest that AdWords does help boost brand visibility by as much as 80%. When customers arrive to your website through AdWords/PPC, they are 50% more likely to purchase your products when compared to people who discovered your website through organic search engine results.
This means that the right ads can help drive more profit to your business. The question is, what are the things you should consider when building a successful AdWords campaign? Here we’ll be taking a look at several different PPC statistics and benchmarks that’ll help you nail your Google AdWords campaign. We would always recommend speaking with your local AdWords agency for more personalised information.
Average CTR (click-through rate)
Click-through rate is very straightforward. It shows you how many people have clicked on your ad upon seeing it. So if 50 people saw your ad and around 5 of them clicked on it, this means that you have a CTR of 10%. One of the most common questions asked when starting an AdWords campaign is how high of a CTR should you be aiming for?
- The average CTR across all industries is around 3.17%.
According to statistics from Wordstream, dating sectors and personal services have one of the highest click-through rates with 6.05%. Trailing behind it is the hospitality and advocacy sectors with a CTR of 4%. Industries such as technology and B2B registered the lowest CTRs with 2.09% and 2.41% respectively. The point is that the industry you’re in will affect your click-through rate.
When comparing your numbers against these averages, it’s okay if you fall somewhere in the middle. If you’ve achieved a higher average than 3.17%, that means you’ve built a successful campaign where you’ve exceeded industry expectations. Your CTR is only a quarter of the equation. The rest of the benchmarks below will determine if your campaign will generate a solid return.
Average CPC (cost-per-click)
Having a high CTR is pretty much useless if you’re spending too much money just to attract someone to click on your ad. Aside from the CTR, your CPC (cost-per-click) is very important as well. This benchmark will allow you to set a limit on the amount of money you expect to spend when a person clicks on your ad.
Once a person clicks on your ad, you pay a small amount for that click. This is how CPC works. There are several factors that affect how much you spend such as the quality of your ad copy and the keywords you are using.
- The average CPC across all industries is around $2.69.
Once again, the industry you’re in will affect your CPC much like your CTR does. Wordstream reveals that the consumer services and legal sectors spend the most per click with $6.40 and $6.75 respectively. Keep in mind that it’s just the price they pay to get a potential customer to visit your website and not the amount converted per customer.
On the bottom half of the CPC benchmarks are the e-commerce and advocacy sectors with $1.16 and $1.43. The rest of the industries fall somewhere around the $3 which is something you should aim for. Chances are you may have to spend more than other industries to attract the same amount of clicks from your ad.
Average conversion rate
Out of all the PPC statistics, your conversion rate is arguably the most important. It’s one thing to attract people to visit your website, but making them your customers is what will propel your ROI to great heights. For different industries, conversion can mean different things so it’s important to manage your expectations when crunching the numbers.
- The average conversion rate across all industries is around 3.75%.
For example, a conversion in the e-commerce industry is a sale achieved via the advert. For travel and hospitality industries, an inquiry or booking is considered a conversion. To set your conversion benchmark, you need to identify what conversion is for your specific industry and consider the numbers from there.
The dating and personal services sectors have the highest conversion rates of around 9.64% and 6.98%. Other industries hover around the 5% range like the employment services and finance and insurance with 5.13% and 5.10%. Across all industries, the general average is around 3.75% according to Wordstream.
Factors such as the overall quality of your website as well as your ad can affect your conversion rate. Use these numbers to find out the conversion rate averages for the industry that you’re in.
Average CPA (cost-per-action)
The last of the PPC statistics you should consider is your CPA. This is the average amount that you spend to acquire a paying customer and informs you on how much of a return you’re actually getting. A high CPA can balance things out and you can even argue that your CPA is the ultimate determining factor of a successful campaign.
- The average CPA across all industries is around $48.96.
The technology sector spends the highest at $133.52 while the auto sector hovers around $33.52 only. You may think that the CPA for the technology sector is very high, but if for example you achieve a $2000 sale per customer, it actually appears quite low. The success of your AdWords campaign relies on how much you spend to get them to purchase your product versus how much they actually spend after attracting them.
Your CPA is a good indicator that you’re generating ROI and informs you of how efficiently your AdWords campaign is running.
These benchmarks and statistics are vital for the success of any AdWords campaign. Comparing figures from different industries will help you set a target average to achieve in terms of your CTR, CPC, conversion rate, and CPA. It might not be easy to reach numbers above the industry averages, but if you can get close to it then your campaign has a higher chance of succeeding.