This post originally aggregated data from thousands of real Google AdWords from multiple industries. Due to recent changes in Google’s API policy, the original content of this blog post has been removed. Please see the following blog post for details: Important Update on WordStream's Infographic Research and AdWords Performance Grader.
All that's left now are the insights we discovered at a high level.
Google AdWords Conversion Rates
Many businesses often wonder how much mileage their industry competitors are getting with Google AdWords. This is a tough problem because the data isn't publicly available. While I was able to create a create an aggregated model based on spend we've analyzed through our AdWords Performance Grader, we're sad to tell you that this data cannot be shared without violating Google's latest terms of service. However, there's a narrative we'd wish to pass along about Google AdWords and how PPC performs as an ad medium.
The Average Conversion Rate on AdWords Varies For Search And Display
We were able to estimate an overall summary conversion rate metric for Google Search ads and Google Display Network ads. While these estimates would be useful for financial investors to evaluate the effectiveness of Google generating ad revenues compared to other internet advertising platforms, we did not feel it would be helpful to businesses actually practicing search and display advertising on Google AdWords. For this reason, we dug deeper, and analyzed the average conversion rates on AdWords by industry, Google Search, and Google Display Network.
Ultimately, the end goal was to create benchmarks that John the internet retailer selling Persian carpets or Jane the local hostel owner to evaluate how well they're advertising against companies bidding for the same ad space.
The results were delightful and shed insights on a myriad of industry differences:
- The Google Display Network consistantly serves more ad impressions than Google Search, but these ads have a much lower click through rate.
- In some industries, Google Display Ads outperformed Google Search ads in conversion rates
- In others, Google Search ads had higher conversion rates than Google Display ads
In summary, the average conversion rate on AdWords varies by industry. Which leads to an unsurprising second insight.
The Average Click Thru Rate on AdWords Varies For Search And Display
In any given industry, the click through rate of Google's ads in Google Search were always higher than the click through rate on the Google Display Network. However, the average Google Display Network click through rate of any industry was still significantly higher than a Facebook ad.
The Average Cost Per Click on AdWords Revealed Conversion Opportunities
In our analysis we found a lot of industry verticals where Google's Display Network had lower average cost per click and higher average conversion rates than Google Search ads. Yes, you heard that right. There's still cheaper ads opportunities on Google that on average convert better than .
So How Do You Know What is a Good Conversion Rate?
If you really want to have an industry benchmark on Google conversion rates, give our AdWords Performance Grader a run. Otherwise, you should look at a metric called cost per lead. Take the average cost per click you are paying for an ad and divide it by your current conversion rate and you will arrive at cost per lead.
(e.g. If your ad's CPC is $1.00 and the conversion rate for the visitors that come through that ad is 5%, then your cost per lead is $1/.05 or $20 per lead)
Industry average conversion rates will not matter if your cost per lead metric is higher than the profit a customer can bring! Simply put, the higher the conversion rate, the less you'll be paying on PPC ads for bad leads!