Which Google Ads Benchmarks Are Sufficient For 2023? [REVIEW]

Is this campaign's click-through rate good?"

Why does our conversion cost seem so high? Does this align with what our rivals are doing?

How much conversion rate is good?"

What caused yesterday's poor performance?"

How many times a week do you get asked these kinds of questions? six weeks?

Receiving these inquiries from your C-suite team without any supporting data is the most annoying thing ever. Alternatively, your data is out of date and useless in the modern advertising environment.

It's critical to stay current with industry Google AdWords benchmarks in order to assist your company in responding to these inquiries.

Wordstream, a LocaliQ company, has released its 2023 Search Advertising benchmarks.

The information is comprised of data points from thousands of Google Ads and Microsoft Ads campaigns for the top 20 industries. Among the leading sectors are:

• Entertainment and the Arts.
• automobiles.
• Schooling.
• Insurance and finance.
• Fitness & Health.
• Renovating the Home.
• Purchasing & Retail.
• Adventure.

Although these benchmarks serve as a starting point, it's crucial to remember that establishing benchmarks that are realistic for your company involves a number of considerations.

We hope that this information will help you establish realistic expectations and goals for your company and gain an understanding of how you compare to the competitors.

Benchmarks for Google & Microsoft Ads Search campaigns are included in this report for:

• Rate of click-through (CTR).
• The mean expense per click (CPC).
• Rate of conversion (CVR).
• Acquisition cost (CPA).

Investigate the data, please.

Industry-specific Average Click-Through Rate for Microsoft & Google Ads

In 2023, the click-through rate averaged 3.5% for all industries.

The industries that LocaliQ combined its data from outperformed that CTR, with an average difference of over 6%.

The average click-through rate (CTR) for search advertisements was 1.35%, which is much lower than when the company started collecting data in 2015.

With a staggering 11.78% CTR, Arts & Entertainment was the business category with the highest CTR.

Attorneys and Legal Services had a 4.76% CTR, which was at the other end of the spectrum.

When attempting to ascertain whether your ads are performing well, the CTR metric should be examined as merely one performance indicator and not as the final word.

Numerous elements can impact CTR, such as:

• Your rivals (Has the SERP become saturated?).
• Your approach to bidding.
• Where you are located on the results page.
• Ad copy that is relevant.
• The target audience for you.

Google provides you with performance indicators for your Quality Score after analyzing your ads. Google will notify you if your industry's peer set's average CTR is higher than your own.

Make sure you're looking at levers other than ad copy when you optimize your search ads.

Industry-specific Average Cost-Per-Click for Microsoft & Google Ads

The Attorneys and Legal Services category had the highest average CPC despite having the lowest CTR. The industry average cost per click in 2023 was $9.21.

Considering the higher-than-average cost of customer acquisition, this average is not surprising.

The industries with the lowest average CPC, real estate and arts and entertainment, came in at $1.55 on the lower end of the spectrum.

Analyzing average CPC is just one performance indicator, much like CTR metrics.

Your advertisements might, for instance, have a low CTR and a low average CPC. This could indicate that your bids aren't high enough to compete in the market, in which case you might want to think about increasing your offer.

However, if your cost per click is higher than average, you should keep a closer eye on these in order to make sure you can demonstrate your return on investment.

Industry-specific Google and Microsoft Ads average conversion rates

The number of leads or sales you receive divided by the total number of clicks on your advertisement yields the average conversion rate.

Examining the 2023 data, there was a significant variation in the average conversion rate among different industries.

Physicians and Surgeons had the second-highest conversion rate at 13.12%, and Animals & Pets had the highest at 13.41% on the high end of performance.

The following sectors had the lowest conversion rates:

• Jewelry & Clothing/Fashion: 1.57%
• Furniture: 2.57%
• Property: 2.88%

These conversion rates make sense when considering these sectors of the economy and the goods they offer.

A costly item for many customers is furniture. Before making a purchase, users conduct a great deal of research online. Additionally, a lot of customers choose to make in-store purchases over those made online due to the cost.

Even though this industry's conversion rate may be low, it's crucial now more than ever to be able to track offline conversions like in-store visits and purchases.

It seems like there are new brands in the clothing industry every day.

A quick search for Nike sneakers will reveal an enormous increase in the quantity of vendors and resellers in recent years.

A low (or high) conversion rate can be directly attributed to the level of competition.

Industry-specific Average Cost Per Acquisition for Microsoft & Google Ads

When evaluating performance, one important KPI that advertisers should monitor is the average cost per acquisition.

The fact that some industries have substantially higher CPAs than others is not surprising. Among the variables that may affect CPA are: 

• CPC average.
• Average CTR: this has an impact on your CPC.
• audience concentration.
• rate of conversion.
• the kind of goods or services you are offering.

Out of all industries, the Careers & Employment sector had the highest CPA, at an astounding $132.95.

Considering the potential obstacles to entry during periods of economic instability, this is not surprising.

Many businesses have been forced to lay off a portion of their staff in the last 12 to 16 months.

However, a growing number of employees are quitting their jobs on their own volition in order to change jobs, launch their own companies, or just take a break.

When combined, those elements may cause the Careers & Employment sector's high CPA.

Even though the CPA may be expensive, given the return on investment for each employee in that industry, many businesses find it well worth the investment.

The CPA target is probably lower in those industries where goods and services are less expensive.

In 2023, the Automotive Repair, Services & Parts industry had the lowest CPA at $21.12, followed by the Animals & Pets industry at $23.57.

In contrast to the data from the previous year, the CPA increased in 21 of the 23 industries.

As previously indicated, the record inflation and economic volatility of the last few years may be the cause of such a significant variation in CPA.

In brief

Don't worry if you find that your performance is lower than that of others in your industry.

These standards are designed to serve as a reference for you.

Consider implementing the following advice if you're having trouble enhancing campaign performance:

• #1: Give your campaigns appropriate (and doable) goals.
• #2: Try out search engines other than Google.
• Make the appropriate financial decision(s) for your campaigns.
• #4: Make a strategic investment in keywords.
• #5: Pay attention to ad optimization and landing page strategy.
• #6: Keep in mind the mobile user experience!.