What is a good Google Ads CTR/CPC/CPA in 2022? [STUDY]

“Is this a good CTR?”

“Why are our CPAs so high? Is this consistent with our competitors?”

“What is a good conversion rate?”

How many times will you be asked these questions in a week? a month?

Nothing is more frustrating than getting these questions from the C-Suite team without data to back it up. Or, you have outdated data that has no use in today’s advertising world.

Staying current with industry benchmarks is critical to helping you answer these questions for your business.

Recent LOCALiQ Wordstream post Their 2021 Search Advertising Benchmarks.

Their data contains data points from thousands of campaigns across the top 20 industries across Google and Microsoft Ads. Some of the top industries include:

• Arts and Entertainment.
• car.
• educate.
• Finance and Insurance.
• Health and Fitness.
• Shopping and Retail.
• travel.

While these benchmarks are a starting point, it’s important to note that many factors can affect the benchmark settings your business can achieve.

We hope this data will be useful to you to help you set horizontal expectations and goals for your business and understand how you can stand out from the competition.

In this report, you’ll find benchmarks for search and display campaigns across Google and Microsoft Ads:

• Click-through rate (CTR).
• Average cost per click (CPC).
• Conversion Rate (CVR).
• Cost per acquisition (CPA).

Let’s dig into the data.

Google Ads average CTR by industry

average value CTR In 2021, all industries will have a CTR of 3.17%. In LOCALiQ’s data, the industries they aggregated have CTRs that exceed that, averaging over 6%.

Compared to 2015, when they first started collecting data, search ads had the lowest average CTR at 1.35%.

The business category with the highest CTR is Arts & Entertainment, with a CTR of 10.67%.

At the other end of the spectrum are lawyers and legal services, with a CTR of 3.84%.

When trying to determine whether your ad is performing well, the CTR metric should be analyzed as a performance metric only, not as a final metric.

There are many factors that affect CTR, including:

• Your competitors (SERP saturated?).
• your bid.
• Your position on the page.
• The relevance of your ad copy.
• Your audience targeting.

When analyzing your ad, Google provides you with metrics about your ad performance Quality Score. Google will let you know if your average CTR is lower than your industry peers.

When optimizing your search ads, make sure you’re looking at leverage beyond ad copy.

Average CPC on Google Ads by Industry

Screenshot via LOCALiQ.com, February 2022

While attorneys and legal services have the lowest CTRs, they also have the highest average CTRs CPC. In 2021, the industry’s average CPC is $8.67.

This average is not surprising considering the above average cost of acquiring a customer.

On the lower end of the spectrum, the real estate and travel industries have the lowest average CPCs at $1.40.

Similar to analyzing the CPC metric, this is just one of the performance metrics.

For example, your ad may show a lower average CPC and a lower CTR. This may mean that your bid is not enough to be competitive in the market and you may want to consider raising your bid.

On the other hand, if your CPC is above average, you need to monitor these data more closely to make sure you can justify your ad spend/ROI.

Average conversion rate for Google Ads by industry

Screenshot via LOCALiQ.com, February 2022

average value exchange rate It’s calculated as the number of leads/sales you get divided by the number of clicks on your ad.

Looking at the 2021 data, average conversion rates vary widely across industries.

At the high end of performance, animals and pets had the highest conversion rate at 19.19%, followed by physicians and surgeons at 19.15%.

Industries with the lowest conversion rates include:

• Furniture: 3.25%
• Real estate: 3.93%
• Apparel/Fashion & Jewelry: 3.60%

These conversion rates make sense when looking at these industries and the products they sell.

Furniture is a high-priced item for many customers. Users do a lot of research online before buying. Not only that, but many customers end up buying in stores rather than online because of the price tag.

While conversion rates in this particular industry may be low, it’s more important than ever to be able to measure offline conversions, such as brick-and-mortar store visits or purchases.

In the apparel industry, new brands seem to pop up every day.

If you simply search for Nike sneakers, the number of sellers and distributors of these types of products has skyrocketed in recent years.

Simple competition volume is directly attributable to low (or high) conversion rates.

Google Ads Average CPA by Industry

Screenshot via LOCALiQ.com, February 2022

average value cost per acquisition These are the core KPIs that advertisers should pay close attention to when analyzing performance.

It’s no surprise that some industries have higher CPAs than others. Some factors that affect CPA include:

• Average CPC.
• Average CTR (this affects your CPC).
• Audience targeting.
• exchange rate.
• The type of product/service you sell.

Attorneys and Legal Services CPA is the highest of any profession at $73.70. This is not surprising given the possible barriers to entry in the industry.

From a consumer perspective, they are likely to do a lot of research before making a decision and contacting someone in the industry.

While the CPA can be high, many businesses in this industry find the investment well worth it when considering the return per customer.

Those industries with low-priced products and services may have lower CPA targets. The industries with the lowest CPAs in 2021 are animals and pets at $14.88, followed by auto repair, service and parts at $17.81.

Mark Owen, the head of paid search at Search Lab mentioned that the cost-per-lead metric has shown an improvement over recent years. He attributes this to the following factors:

• Improve lead management system (CRM).
• Improve audience targeting.
• Improvements to keyword targeting.

generalize

If you find yourself on the low end compared to others in your industry, don’t worry! These benchmarks are designed to guide you.

If you’re struggling with performance, try following these tips.

• #1: Set the right (and realistic) goals for your campaign.
• #2: Test other search engines besides Google.
• #3: Choose the right budget for your campaign.
• #4: Invest in a good keyword strategy.
• #5: Focus on your landing page strategy ad optimization.
• #6: Don’t Forget Your Phone!

Be sure to check out LOCALiQ’s Wordstream full report Benchmarks and tips for improving your campaigns.

More resources:

Featured image: Jirsak/Shutterstock