Sign up for weekly recaps of the ever-changing search marketing landscape.
New benchmarks: Google AdWords cost per acquisition across 20 industries [study]
Are you a PPC Unicorn or a PPC Donkey? Columnist Larry Kim shares data on CPA averages by industry so you can see how you measure up to the competition.
Are you getting the biggest bang for your AdWords buck?
It’s hard to gauge if you’re only looking at your own performance and competing against yourself. In the live auction, you’re competing against thousands of other advertisers in your industry — so how do you know where you stand?
One of your major KPIs is going to be your cost per action, or cost per acquisition (CPA), which is related to both your cost per click (CPC) and conversion rates (CVRs) for those clicks. The range on cost per action rates varies greatly, with the top 10 percent of advertisers boasting CPAs up to 5x better than the average.
You know what we call those advertisers? They’re the magical, amazing unicorns you want to be. And I’m sorry, friends, but there are only two types of advertisers: those special, magical unicorns and the donkeys who pay too much, don’t get the impressions and generally suck at PPC.
You don’t want to be a donkey.
Let’s see where you stand and how you can avoid that.
Average AdWords CPAs for search and display
We just did an extensive analysis of more than 2,000 client accounts in all verticals, representing more than $34 million in AdWords spend, to establish current, accurate average conversion rate (CVR) benchmarks for both search and display ads across 20 different industries: Advocacy, Auto, B2B, Consumer Services, Dating & Personals, E-commerce, Education, Employment Services, Finance & Insurance, Health & Medical, Home Goods, Industrial Services, Legal, Real Estate, Technology and Travel & Hospitality.
In our study, we found that the average CPA in AdWords across all industries is $59.18 on the Search Network and $60.76 on the Display Network.
On the Display network, Technology advertisers enjoy the lowest average CPAs, at $19.23. On the Search Network side, those in the Dating & Personals industry have incredibly low average CPAs, at just $6.91.
The most expensive CPAs in search
Dating & Personals is a real outlier as far as Search Network CPAs go, at just a fraction of the overall average. But those at the opposite end of the scale are paying way more… in fact, advertisers in Legal have average CPAs over 19 times more expensive than those in Dating & Personals.
The top industries by cost per action are:
- Legal: $135.17
- Health & Medical: $126.29
- Employment Services: $105.79
- Home Goods: $86.68
- Industrial Services: $77.52
Those enjoying the lowest CPAs in search, in addition to Dating & Personals, are in Advocacy ($37.31 avg. CPA), Real Estate ($41.14 avg. CPA) and Education ($42.13 avg. CPA).
Be a unicorn in a sea of AdWords donkeys
Who wants to just be average? If you’re looking at the figures above and thinking, “Gee, I’d really love to hit that average CPA in my industry,” stop it right now.
You’re so much better than that.
Average isn’t great — it’s not even good! Average is just middle of the road. We know that Google rewards engaging, compelling, high-CTR ads with better positioning, more impressions and lower costs-per-click. Google wants to show the best ads to searchers — so badly that you’ll actually have to pay a Donkey Tax for just being average or worse.
If you’re only getting average CPAs, you’re holding steady in the middle of the pack. That means paying more than top advertisers for your clicks and sabotaging your own CPAs. Instead of paying $100 per action, you could be paying $10. Don’t you want to pay $10?
Stop settling for mediocrity. Don’t be a donkey. Be a smarter AdWords advertiser. Be a unicorn.
Benchmarks by industry
Check out the new AdWords Cost Per Action benchmarks by industry in the infographic below.
To see new benchmarks for average conversion rate, average click-through rate and average cost-per-click, see the full analysis on the WordStream blog
Some opinions expressed in this article may be those of a guest author and not necessarily Search Engine Land. Staff authors are listed here.