[DATA] What’s a Good AdWords CTR/CPA/Conversion Rate in 2018? by @egabbert

What’s a good click-through rate in Google AdWords?

What about a good cost per click and a good cost per action?

Is your AdWords conversion rate up to par?

These are the $10,000 questions. (Why $10,000? That’s how much the average small to medium-sized business spends on AdWords every month. Large brands spend way more!)

Whether you’re new to advertising on AdWords, or your agency just signed on a new client in an industry you haven’t worked with before, it’s useful to have some idea whether you’re doing a good job. That’s where these benchmarks come in.

We tapped the WordStream client base (disclosure: I work for WordStream), which includes thousands of small businesses and agencies, operating in every industry, to set these benchmarks.

This data is just a starting point, and your mileage may vary. But we hope you find these benchmarks to be a useful way to set expectations and get a sense of where you stand.

In this report, you’ll find benchmarks for both search and display ads in AdWords for:

Click-through rate (CTR)Cost per click (CPC)Conversion rate (CVR)Cost per action (CPA)

You’ll find averages across these AdWords metrics for 20 different 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.

Let’s dig into the data.

AdWords average CTR

The average click-through rate in AdWords across all industries is 3.17 percent for search and 0.46 percent for display.

Dating and Personals businesses boast the highest CTRs in search, coming in just over 6 percent, while Travel and Hospitality companies also enjoy high search CTRs (possibly due to travel ad formats with strong visual appeal).

As of 2018, the industries with the lowest average click-through rates including Technology, B2B, and Consumer Services. These are verticals where consumers may do a lot of research before they make a final purchasing decision.

Overall, the average click-through rates for both search and display ads are higher than they were a couple of years ago: Good news for AdWords advertisers and agencies!

If your click-through rates aren’t quite where you want them to be, consider:

Auditing your account with intent in mind. Are you bidding on keywords that are truly relevant to your offerings and that suggest intent to buy?Test your ad copy to see what resonates with your buyers. Features vs. benefits? Sales or free shipping? Try pulling emotional triggers if you can.Make sure you take up as much space on the SERP as you can. One way to do this is by implementing ad extensions.

AdWords average cpc

The average cost per click in AdWords across all industries is $2.69 for search and $0.63 for display.

The news here is good too: These average costs have increased very little over the figures we found a couple of years ago (when the averages were $2.32 and $0.58 respectively).

Legal services have some of the highest CPCs among all Google ads on the search network. This isn’t too shocking: “Lawyer” is the fourth most expensive keyword on Google (including terms like “malpractice lawyer” and “lemon law lawyer”).

Average CPCs in the legal industry are almost $7, well above the general average, but they can get as high as $50-100 per click in some specialties.

Consumer services aren’t too far behind, with an average CPC of $6.40.

Advocacy and nonprofit groups are lucky to have an average cost per click under $2, likely as a result of the $2 max CPC bid Google Grant advertisers have to set on all of their keywords.

Notice that most industries have pretty inexpensive costs on the Google Display Network. The only vertical that pays more than $1 per click on the Display network is Dating & Personals.

If you find yourself with a higher than average cost per click, try these tips to lower your costs:

Aim to raise your Quality Scores. This “grade” for your ad quality is a big determining factor in how much you pay – it basically qualifies you for a discount on each click.Use ad scheduling and geotargeting. Ensure you aren’t showing ads and getting clicks in areas or during times when/where you don’t do business.On the Display side, always narrow your audience with tactics like remarketing, in-market audiences, and demographic targeting. You’ll be reaching people who are much more likely to be interested in your business.

AdWords Average conversion rate

The average conversion rate in AdWords across all industries is 3.75 percent for search and 0.77 percent for display.

Again, Dating & Personals is killing it, with by far the highest conversion rates for both search and display ads. The Legal, Auto, and Consumer Services verticals also have strong conversion rates.

Despite enjoying those low CPC’s, Advocacy advertisers can struggle to get conversions.

Real Estate and Home Goods are also on the low end, which we can probably chalk up to high competition. These are areas where consumers have a ton of choice and can be very picky.

To improve your AdWords conversion rate, try:

Take a hard look at your landing pages. They should be clear, simple, super-fast, and easy to use on every device. Never send a specific ad to a general landing page or, worse, your home page. (Kiss of death.)Change up your offer mix. Sometimes the offer itself just isn’t compelling enough. At WordStream, our free AdWords Grader converts at a higher rate than a standard software free trial, because it’s lower friction and the path to value is shorter.Make sure your ads are reaching a qualified audience. For example, try income targeting if your products are intended for a luxury market.

AdWords Average CPA

The average CPA on the search network is actually lower now than it was a couple of years ago. Display CPA’s, however, have gone up a little bit. The average CPA in AdWords across all industries is $48.96 for search and $75.51 for display.

The lowest cost per action across industries is Autos, coming in at just $33 per action. B2B, Real Estate, and Tech Companies, on the other hand, confront average CPA’s over $100. However, these are industries selling high-ticket items, so higher CPA’s are to be expected and are generally offset by a high value per customer.

Here are some things to keep in mind if your CPA is so high that you’re not getting a strong return on your AdWords ad spend:

Diagnose the problem. Is your CPA high because your individual click costs are high, or because you’re getting lots of clicks but no conversions?Again, keywords make a difference here. Make sure you’re concentrating most of your budget on high-intent, high-converting keywords.Analyze your offer types. A high conversion rate on an offer like a free guide won’t help your bottom line if those leads don’t convert to paying customers at a solid rate.

Were you surprised by any of these metrics?

Check out the full WordStr

eam report for answers to frequently asked questions about this data.

This report is based on a sample of 14,197 US-based WordStream client accounts in all verticals (representing over $200 million in aggregate AdWords spend) who were advertising on Google AdWords’ Search and Display networks between August 2017 and January 2018. Each industry includes at minimum 30 unique active clients. “Averages” are technically median figures to account for outliers. All currency values are posted in USD.

Image Credits

In-post image created by WordStream

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