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VOL. 42 | NO. 9 | Friday, March 2, 2018

Does your PPC measure up?

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For many reasons, 2017 proved to be an important year for all things data. And while the user interfaces for designing a pay-per-click (PPC) campaign may have changed little over the last year, the metrics behind such campaigns have increased notably.

Already an obscure area of marketing, understanding what to do with all that new PPC data is a challenge while attempting to understand whether or not a PPC campaign is inherently successful. Fortunately, three metrics continue to be generally accepted as key success indicators:

The click-through rate (CTR) is the percentage of consumers who have seen your PPC ad and selected it.

The conversion rate is the percentage of consumers who have converted to a lead or sale or however you define conversion success.

The cost per click (CPC) is the amount paid for each of your PPC ads that consumers click. Together, these three metrics tell you how large your audience capture was (click-through rate), how much of that audience did what you wanted them to do (conversion rate) and how much you paid to get them to interact with your PPC campaign (cost per click).

With a new year of Google AdWords (the online advertising service most often used to deploy PPC campaigns) data officially in the books, we thought it valuable to see where six key industries – business-to-business (B2B), ecommerce, finance/insurance, legal, real estate and technology – fell in terms of the three metrics above.

This data is intended to offer a loose benchmark for anyone within these industries as a way to frame the success of their own PPC campaigns, though the results vary widely based on your offer, differentiators and competitive pressure.

In 2017, Google AdWords PPC campaigns sponsored across the search network yielded the following:

Click-Through Rate Benchmarks:

B2B: 2.55 percent

Ecommerce: 1.66 percent

Finance/insurance: 2.65 percent

Legal: 1.35 percent

Real estate: 2.03 percent

Technology: 2.38 percent

The average CTR was 1.91 percent across all 16 Google AdWords industries.

Conversion Rate Benchmarks:

B2B: 2.58 percent

Ecommerce: 1.91 percent

Finance/insurance: 7.19 percent

Legal: 4.35 percent

Real estate: 4.4 percent

Technology: 2.55 percent

The average conversion rate was 2.7 percent across all 16 Google AdWords industries.

Cost-Per-Click Benchmarks:

B2B: $2.58

Ecommerce: $1.91

Finance/insurance: $7.19

Legal: $5.88

Real estate: $4.40

Technology: $2.55

The average CPC was $2.32 across all 16 Google AdWords industries.

As you can see from these benchmarks, some conversion-rate winners, such as the legal category, naturally struggle with a high industry CPC. Ads referencing “attorney” or “lawyer” are quite costly, though they do convert well.

While this data is simply meant to be a loose benchmark, it does provide a baseline for assessing your PPC performance at a high level.

Better yet, develop your own baseline and work to improve from there, keeping close watch over your specific cost of customer acquisition.

Cameron Elliott, traffic manager at RedRover Sales & Marketing Strategy, can be reached at redrovercompany.com.

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