By the end of 2018, Australian businesses are predicted to have spent at least $1.8 billion (USD) on search engine ads and in 2022, this will increase to $1.9 billion (USD). This is because Google Ads have a great return on investment (ROI) when used efficiently. Businesses make an average of $2 in revenue for every $1 they spend on Google Ads and 98% of searchers choose a business that is on page 1 of the search results.
There is no doubt that using Google Ads, formerly known as Google AdWords, is a powerful marketing tool and should be a core focus of any online marketing strategy. But how do you know if spending time and money on Google Ads will be worthwhile for your business? Everyone wants to achieve high a Click-Through Rate (CTR) and low Cost Per Click (CPC), and often the best way to see if your investment will be worthwhile is to check the industry benchmark.
Therefore, you’ll find data below from a report conducted by WordStream, which outlines the performance average for Google Ads across several industries in the United States*, including:
- Advocacy
- Auto
- B2B
- Consumer Services
- Dating & Personals
- Ecommerce
- Education
- Employment Services
- Finance & Insurance
- Health & Medical
- Home Goods
- Industrial Services
- Legal
- Real Estate
- Technology
- Travel & Hospitality
Average Click-Through Rates
The CTR is the ratio showing how many people clicked on your ad to visit your website. It is measured by dividing the number of times your ad was seen (impressions) by the number of times it was clicked on. A high click-through rate means your ads are relevant and helpful, and are targeting the right people.
As seen in the chart below, the average CTR among all industries is 3.17% on the Search Network and 0.46% on the Google Display Network, which is an increase from a few years ago. The most successful industry for search ads is Dating & Personals which has a 6.05% CTR. This is no surprise considering the rise of online dating services. The Advocacy, Auto and Travel industries also achieved a high CTR.
The Real Estate industry had the highest CTR for display ads with a 1.08% CTR, a reach far ahead of the next highest which was Dating & Personals. The Technology industry has the lowest CTR of both networks.
Average Cost Per Click
The Average Cost Per Click refers to the actual price you will pay per click on your Google Ad. Your ROI will depend on how much you are paying for clicks and what type of quality you are getting for that investment.
In this case, the lower the CPC, the better. The average cost per click is $2.69 on the Search Network and $0.63 on the Google Display Network. Travel & Hospitality and Ecommerce have some of the lowest CPC, as does the Advocacy industry. The highest CPC industries are Consumer Services with an average of $6.40 and $6.75 for the legal industry. The terms “Lawyer” and “Attorney” actually make the list for the 10 most expensive keywords on Google. On the Google Display Network, Dating & Personals was the only industry to have a CPC over $1.
Average Conversion Rate
The Conversion rate refers to the percentage of people who clicked on your ad and then completed an action on your website (such as a purchase or contact form submission). This is calculated by dividing the number of conversions by the total number of clicks on your ads. The type of conversion depends on your industry; Ecommerce might want a purchase, Dating & Personals might want a sign up and Advocacy might want the viewing of a video. The conversion rate shows how successful an ad is in achieving its goal based on the total cost of that ad.
The average conversion rate is 3.75% on the Search Network and 0.77% on the Google Display Network. Dating & Personals leads the pack with 9.64%, with Auto, Legal and Consumer Services also standing out. On the Google Display Network, Dating & Personals is again very successful with Legal and Employment next in line. The advertisers in these industries will most likely be using certain commercial intent keywords, which are attracting visitors to their sites.
What do these metrics mean for your business?
By analysing the benchmark for your industry, you get a great indication of the results you can achieve through a successful Google Ads strategy. The key thing is not to throw as much money as you can into it, but to tailor your strategy around the best-performing terms using the most-effective Google Ad types. The only way to achieve this is by partnering with an expert digital agency that will establish a strategy to deliver you genuine results.
If you’re looking to get started or to improve your Google Ads campaign, get in touch with our Digital Strategists today.
*Please note: Figures may differ for the same industries in Australia.
