by Austin LeClear on June 14, 2021
Whether you’re brand new to Google Ads or you’ve been in the game for some time, it’s normal to want to know about standard Google Ads benchmarks.
Your campaigns are technically working, but are you paying too much per click? Are your conversion rates too low, and are enough people clicking on your ad?
Benchmarks are the easiest way to help you assess whether or not they’re room for improvement for your campaigns, along with potentially helping you to troubleshoot some issues.
In this post, we’re going to discuss the three core Google Ads benchmarks that matter to all advertisers: Cost per click, CTR, and conversion rates. We’ll also look at how COVID impacted advertiser performance overall.
Why to Tread Carefully with Google Ads Benchmarks
I want to acknowledge something here before we dive headfirst into the benchmarks that we’ve compiled.
Benchmarks are industry standard. That makes them valuable reference points that can help you get an idea of what’s possible and to show you the value of a new platform. That being said, they are not ironclad, and they’re not going to be realistic or even attainable for all brands.
There are some brands that fall outside standard benchmarks. Some keywords, for example, are exceptionally high-cost compared to most.
You can see this here. The keywords related to “attorney” are no more than $11.97 per click, with some as low as $1.02.
The keywords related to “personal injury attorney,” however, are significantly higher, costing up to $94.26:
The benchmarks you may see on other sites will also vary depending on who is collecting the data and what information sources they’re using.
You can see, however, that there are fluctuations in data depending on who is collecting it. Here’s a list of CPCs by industry from AdEspresso:
And here’s the same information from WordStream:
In this post, we’re compiling information from AdEspresso, WordStream, InstaPage, and Kenshoo, all of which are third-party ads or analytics platforms that have enormous userbases. This gives them first-hand accurate data, providing reliable, expansive research.
With that, let’s take a look at the research.
Google Ads Cost Benchmarks
We’re going to look at the cost per click benchmarks for both Google search ads and ads being run in the display network.
Overall, all the data we saw had an average CPC ranging from $2.41-2.69 for search ads, though these vary heavily by industry.
This is a great visual from WordStream, which had data that lined up most consistently with the other reports:
Legal CPCs (unsurprisingly) and consumer services were high, in the mid-to-high $6 range, and eCommerce CPCs were the lowest around $1.16.
And as you can see in both the image from WordStream above and the graph from InstaPage below, CPCS are drastically lower on the display network than search ads, costing around $0.60 per click.
There are certain factors that can impact CPC outside of your own strategy and industry, too. Device type is a big one.
CPCs seem to be higher on average with desktop searches (around $0.70) than mobile searches (under $0.60), and tablet searches cost the least ($0.42).
We also know that Google Ads quality scores can directly impact ad costs. Campaigns with above-average quality scores can get as much as a 50% discount on ad costs, while lower-than-average scores can see prices rise dramatically.
Quick Tips to Improve Your CPC
Whether you’re above or below your industry’s CPC benchmarks for Google Ads, there’s always room for improvement. The following tips are a good place to start:
- Work on improving your quality score by narrowing your targeting or creating smaller, closely-related keyword groups
- Prepare your ads and landing pages to be mobile-friendly, as an enormous percentage of search is happening on mobile
- Don’t get distracted by cost alone; if you’re seeing high click-through and conversion rates then don’t get stressed cutting corners to lower costs at the risk of losing high-quality traffic; you can test it, but remember that hitting a target CPC isn’t as important as getting profitable results
Google Ads CTR Benchmarks
Based on the data, the average CTR for google search ads is 2%, and it may be around .30-.50% on display.
This is what you’d expect; users who are actively searching for something are more likely to click when they see an ad for it than someone who just happens to see an ad they may be interested while they’re focused on reading an article instead.
We tell our clients that a CTR at 2% or above is healthy; anything under that suggests that there could be an issue with ad copy or keyword selection.
Quick Tips to Improve Your CTR
Who wouldn’t want to increase their ads CTR? Here are a few quick tips that can help:
- Use Google Ad extensions on search ads to offer additional fields of relevant information and links that users may be more likely to click on
- Boost your quality score to increase your search position, which can lead to higher CTRs
- Highlight the value that you have to offer, even leveraging exclusive offers that align with high-intent keywords in your keyword group
Google Ads Conversion Rates Benchmarks
Google Ads conversion rates are, of course, an important part of the puzzle. Understanding how many people are actually converting can help you assess the value of your campaigns.
The average conversion rate across all date was about 4.2% for search ads, and around .55% for display ads.
Again, this varies by industry, as you can see above. Vehicles and law and government industries have incredibly high conversion rates averaging between $7-8, and computers and electronics were the lowest at 3.16% in search.
Quick Tips to Improve Your CVR
Boosting your conversion rate is pretty much always the goal. The following tips can help increase your CVR at any price point:
- Use retargeting options for display ads, as reaching warm audiences increase your odds of generating a purchase and using dynamic ads can recapture abandoned carts
- Have a clear offer on a landing page for search ads to encourage purchase, like discounts or lead magnets
- Use negative keywords to appear in more relevant searches for your target audience, and dynamic keyword insertion to show that your ad is relevant to the user reading the ad based on their specific search
How COVID-19 Changed the Game for Google Ads Performance
We know that COVID-19 pretty much turned our entire world upside down. It’s perhaps no surprise, therefore, that the pandemic impacted not only the economy, but consumer behavior and advertizer behavior alongside the standard benchmarks.
Both CPC and CVR dropped during COVID, and businesses had a tendency to reduce their total daily budgets to focus more on lower-cost, easier-to-convert users.
Fewer customers were making purchases in certain industries, worried about (or actually experiencing) income loss, housing stability, and general economic insecurity. Interest in some industries peaked as people were spending more time at home, including hobbies and leisure and home and garden.
If you saw your data change significantly during the pandemic, know that this was normal. Things may stabilize as vaccinations are released in your target demographic areas globally and the world inches back towards something closer to our previous normal.
Final Thoughts
Just as a fun reminder, benchmarks are useful resources, but they aren’t everything.
If, for example, the industry standard for gardening is $1.40 but you’re targeting high-value keywords because you have higher-than-average-value products in the industry, your CPCs will almost certainly be above the benchmark. If you’re creating strong campaigns that convert at decent profit margins, test out different options but don’t rule out those campaigns automatically.
Keep in mind that the data at the end of each day will vary for all of your accounts, shifting slightly. The only metric that should truly matter is if you’re making money or not.
And remember, too, that just because you’re hitting an average benchmark doesn’t mean you can’t improve further. Testing is crucial to helping you uncover new strategies, best practices, bid caps, and keyword groups that can boost your CTR and CVR while lowering your CPC.Working with an expert Google Ads company can help you with all that.
