As a small or medium business owner, we know that your marketing budget is precious. Understanding how to best allocate your ad spend to get the most out of your ads can be one of the most intimidating aspects of digital marketing and pay-per-click advertising. Every business owner and entrepreneur wants to create the best ads with the highest click-through rates (CTR) and best conversion rates. However, it can be difficult to understand what average cost-per-click to aim for to beat out the competition in your industry. We’ve compiled a list of industry benchmarks, including average cost-per-click (CPC), click-through rate (CTR), cost-per-action (CPA), and conversion rate (CVR) for both search and display ads.
We pulled pay-per-click conversion rates for the following U.S.-based industries:
- Consumer Services
- Dating & Personals
- Employment Services
- Finance & Insurance
- Health & Medical
- Home Goods
- Travel & Hospitality
Average Cost-Per-Click (CPC) By Industry
Most industries have fairly inexpensive average cost-per-clicks on the Google Display Network – the only industry with a CPC over $1 for Display ads is Dating & Persona. However, for Search ads, Legal Services has the highest average cost-per-click by industry, which isn’t all that surprising since “lawyer” and “attorney” are two of the most expensive search terms on Google and Bing. Customer Services is right there behind Legal Services with an average cost-per-click of $6.40, and Technology rounds out the top three most expensive average CPCs with $3.80.
The good news is that the pay-per-click conversion rate has increased very little in the last couple of years, so you won’t have to factor in as much of an increase in CPC costs as there has been in the past.
Average Click-Through Rate (CTR) By Industry
As you can see from the table above, the highest industry average click-through rates (CTR) by far are dating & personals, which could be contributed to the emotionally charged copy companies in this industry are able to write for their ads. The next two industries with the highest CTRs are auto and travel & hospitality – both industries have the ability to post appealing pictures of exotic, far-flung destinations and the latest and greatest cars on the market.
Average Conversion Rates By Industry
In years past, the Finance and Insurance industries had the highest pay-per-click conversion rates, however, new data shows that the Dating & Personal industry is leading the pack now with an average conversion rate of over 9% on Search. Rounding out the top three industries with the highest average conversion rates are Legal with 6.98% and Consumer Services with 6.64% on Search.
The majority of the best converting advertisers aren’t afraid to change their sale offers to boost their pay-per-click conversion rates. They also typically take advantage of conversion-boosting marketing tactics, such as creating new content for their website and adding videos to their landing pages. While these tactics work for some industries, e-commerce clients may not have as many opportunities to change their sale offerings, which can lead to a poorer average conversion rate. In addition, their hands are tied to their inventory, which means they aren’t able to polish their ad copy to match with all high-performing e-commerce keywords.
To get the most out of your Google Ads spend, focus on improving the performance of your keywords to ensure high-commercial intent so you’re attracting high-intent customers who are ready to buy. While Search conversion rates have increased slightly, Display conversion rates have decreased. To make sure your Display ads continue to convert, pay closer attention to your display ad placement and audience optimization.
Average Cost-Per-Action (CPA) By Industry
With everyone still feeling the residual financial effects of the pandemic, costs in advertising have increased exponentially for some industries and decreased for others. The three industries with the highest CPAs are Technology with an average CPA of $133.52, B2B with $116.13, and Consumer Services with $90.70. These prices may make it hard to believe, but the CPA on Search is actually lower now than it was a couple of years ago. Display CPAs, on the other hand, have risen within the last couple of years.
What is a Good Cost-Per-Click?
As mentioned, most businesses are still feeling the effects of the pandemic when it comes to their average cost-per-click and pay-per-click conversion rates, but identifying the best average cost-per-click for your business is tricky because there are no clear-cut guidelines to go off of. There is no simple, one-size-fits-all answer for what is a good cost-per-click. Google advertising costs, for Search and Display ads, vary depending on your industry, current trends (like the COVID-19 pandemic), and customer lifecycle. However, with the historical data of average cost-per-click by industry we’ve provided here combined with your unique knowledge of your business, we hope you’ll be able to identify the optimal average cost-per-click for your business.
Ready to Get the Most Out of Your Average Cost-Per-Click (CPC)?
Paid search advertising is a great way to generate instant traffic. However, you can burn through your ad spend very easily if you don’t strategize your keyword selection, relevancy, match type, geo-location, and keyword exclusion. As your Google Ad consultant, we ensure your ad dollars aren’t wasted and provide you with monthly reporting and analysis of the results to find areas of continuous improvement. Contact us to learn more.
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