Google Ads Benchmarks 2023: Key Trends & Insights | Varn


31 May 2023

Google Ads Benchmarks 2023: Key Trends & Insights for Every Industry

Research suggests costs per leads up and conversion rates down in 2023

After the uncertain times of the pandemic and the bounce back seen in 2021, 2022 and 2023 have been challenging for advertisers across the digital space, and inflation appears to have had a big impact on costs for business across different sectors. 

Recent research from Wordstream, has provided some useful data that takes a look at new 2023 search marketing benchmark data from Google Ads. This includes the average conversion rate, cost per lead (CPL), click-through rate (CTR), and cost per click (CPC) in comparison to 2022 across different industries. 

The headlines: cost per leads are up, conversion rates are down

The table below from Wordstream shows the headline across 4 key metrics from the dataset, click through rate is up, cost per click is up, conversion rate is down and cost per leads are up, with the average cost per lead across industries seeing an estimated 20% increase, by far the largest change in the relative metrics. 

The key trends of the report also show that: 

  • Click-through rate (CTR) increased YoY for 22 out of 24 industries.
  • Cost per click (CPC) increased year over year (YOY) for 14 industries.
  • Conversion rate (CVR) decreased YoY for most industries.
  • Cost per lead (CPL) increased YoY for all industries but two (Automotive Sales and Beauty and Personal Care).

The methodology 

Below Wordstream explain the methodology behind the data and offer comment on what the insights reveal: 

“We analyzed 17,253 US-based search advertising campaigns running between April 1, 2022, and March 31, 2023, to create in-depth search advertising benchmarks for 23 industries. These search ad benchmarks are primarily Google Ads based, but they do account for Microsoft Ads as well since the data is about 80% from the former and 20% the latter.

“We’re extremely excited to release and share these search advertising benchmarks,” said LocaliQ Chief Sales Officer Jon Camerata. “Between inflation rising at record levels, increased competition, and economic uncertainty, it’s more important than ever to understand how your search campaigns are performing. When done right, search advertising can be a powerful tool for your business. We hope these benchmarks help you feel more confident in the decisions you make to maximize your search advertising success.”

What industry specific data shows

The average click-through rate (CTR)  in Google Ads in 2023 is 6.11%.

This increased in all but 2 of the industries, with Business Services and Industrial and Commercial industries decreasing. 

Industries with the highest click-through rates; 

  • Arts and Entertainment: 11.78%
  • Sports and Recreation: 10.53%
  • Travel: 10.03%.

Some of the lowest click-through rates include:

  • Attorneys & Legal Services: 4.76%
  • Home & Home Improvement: 4.80%

The average cost per click (CPC) in Google Ads in 2023 is $4.22.

The industries with the highest costs per click:

Attorneys and Legal services: $9.21

Dentists and Dental Services: $6.69

Home and Home Improvement: $6.55

Some of the lowest CPC industries include Arts and Entertainment at $1.55 as well as Real Estate which was also at $1.55. 

The average conversion rate (CVR) in Google Ads in 2023 is 7.04%.

The highest average conversion rate by industry: 

Animals and Pets: 13.41%

Physicians & Surgeons: 13.12%

Automotive – Repair, Service & Parts: 12.61%

It’s interesting to notice that these higher conversion rates for these industries are a lot higher than some of the lower conversion rates, like Real Estate at 2.88%. 

The average cost per lead (CPL) in Google Ads in 2023 is $53.52.

The highest average cost per lead includes: 

  • Career and Employment: $132.95
  • Attorneys & Legal Services: $111.05
  • Furniture: $108.85

The table below summarises the 2023 search advertising benchmarks, broken down by industry. 

Why use Full Service SEO 

The rising costs of getting results within Google Ads is not a reason to pull all your budget away from the channel, but by investing and diversifying your budget across different platforms and spades you will reach customers at different points and from different areas, which will reduce your reliance on any one given channel. 

This is why Varn recommends taking advantage of Full Service SEO, by investing across organic search you will reduce reliance on paid and decrease costs over the long run, and by using paid to in tandem with SEO, you will create a more robust business model. 

The data around cost per leads across industries below is an example of the impact inflation is having. Varn’s Head of Paid Media Hannah Miller offers the below thought on the benchmark data and how it should inform your strategy: 

“Advertisers need to be smart with their activity. With higher CPCs and lower conversion rates you need to ensure that your accounts are in the best shape possible. For example, do you have the best possible quality scores to ensure you’re getting the best CPC available? You can’t control the inflation of CPCs rising with competitor activity but you can control your own account and the quality of it. Is your shopping feed meeting all of the requirements Google has laid out? Are you using the best quality assets within your campaigns? In a world where AI is so prominent within ad accounts a lot of control has been removed so work out what you can control and ensure you optimise it.

When it comes to conversion rate, the way consumers behave has changed. With the current economy the purchase journey is much more considered and has more touch points. To make sure that you are the company that the consumer returns to you have to 1. Ensure that the on site customer journey is as smooth as possible and 2. Make sure you are visible wherever the consumer is e.g. YouTube, Display, Gmail, etc.”

Feel free to get in touch with a member of our expert team to learn more about Full Service SEO.

Article by: David, SEO Account Manager More articles by David

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