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What Are Good Google Ads Benchmarks In 2023? [STUDY]

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What Are Good Google Ads Benchmarks In 2023? [STUDY]

“Is this a good click-through rate for our campaigns?”

“Why is our cost per conversion high? Is this in line with our competitors?”

“What’s a good conversion rate?”

“Why was performance down yesterday?”

How many times do you get asked these questions in a week? A month?

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Nothing’s more frustrating than getting these questions from your C-suite team without having data to back them up. Or, you have outdated data that is not useful in today’s advertising world.

Keeping up-to-date on industry Google Ads benchmarks is crucial to help answer these questions for your business.

Wordstream by LOCALiQ recently published its Search Advertising benchmarks for 2023.

The data consists of data points from thousands of campaigns in both Google and Microsoft Ads for the top 20 industries. Some of the top industries include:

  • Arts & Entertainment.
  • Automotive.
  • Education.
  • Finance & Insurance.
  • Health & Fitness.
  • Home Improvement.
  • Shopping & Retail.
  • Travel.

While these benchmarks are a starting point, it’s important to note that many factors go into setting benchmarks that are attainable for your business.

We hope this data is useful for you to help level-set expectations and goals for your business, and get a sense of how you stack up to the competition.

In this report, you’ll find benchmarks for Search campaigns in Google & Microsoft Ads for:

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

Let’s dig into the data.

Average Click-Through Rate In Google & Microsoft Ads By Industry

Screenshot from LOCALiQ, July 2023

The average click-through rate across all industries sat between 3-5% in 2023.

In LOCALiQ’s data, the industries it pooled together outperformed that CTR, averaging over 6%.

Compared to when the company first started gathering data in 2015, the average CTR for Search ads was minimal at 1.35%.

The business category that boasted the highest CTR was Arts & Entertainment, with an astounding 11.78% CTR.

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

The CTR metric should be analyzed as only one indicator of performance, not the end-all-be-all when trying to determine if your ads are doing well.

Many factors can influence CTR, including:

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  • Your competition (Is the SERP saturated?).
  • Your bidding strategy.
  • Your position on the results page.
  • Your ad copy relevancy.
  • Your audience targeting.

When analyzing your ads, Google gives you indicators of performance within your Quality Score. If your average CTR is below your peer set in your industry, Google will let you know.

When optimizing your Search Ads, make sure you’re taking a look at levers outside of just ad copy.

Average Cost-Per-Click In Google & Microsoft Ads By Industry

Cost per click by industryScreenshot from LOCALiQ, July 203

While the Attorneys and Legal Services showcased the lowest CTR, it also boasted the highest average CPC. In 2023, the average CPC for this industry came in at $9.21.

This average is unsurprising, given the higher-than-average cost of acquiring a customer.

On the lower end of the spectrum, Real Estate and Arts & Entertainment industries had the lowest average CPC at $1.55.

Similar to analyzing the CTR metric, average CPC is just one performance indicator.

For example, your ads may show a low average CPC and a low CTR. This could mean your bids aren’t high enough to be competitive in the market, and you may want to consider raising bids.

On the other hand, if you have a higher-than-average CPC, you’ll want to monitor these more closely to ensure you can prove your return on ad spend/investment.

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Average Conversion Rates In Google & Microsoft Ads By Industry

Average conversion rate by industryScreenshot from LOCALiQ, July 2023

The average conversion rate is calculated from the number of leads/sales you get divided by the number of clicks from your ad.

When looking at the data from 2023, the average conversion rate varied highly across industries.

On the high end of performance, Animals & Pets had the highest conversion rate at 13.41%, followed by Physicians and Surgeons at 13.12%.

The industries that had the lowest conversion rate included:

  • Apparel/Fashion & Jewelry: 1.57%
  • Furniture: 2.57%
  • Real Estate: 2.88%

When looking at these industries and the products they sell, these conversion rates make sense.

Furniture is a high-ticket item for many customers. Users do a lot of research online before making a purchase. Not only that, but because of the price tag, many customers end up purchasing in stores instead of online.

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

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

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If you do a simple search for Nike sneakers, the number of sellers and resellers for these types of products has skyrocketed in recent years.

The amount of competition can directly contribute to a low (or high) conversion rate.

Average Cost Per Acquisition In Google & Microsoft Ads By Industry

What Are Good Google Ads Benchmarks In 2023? [STUDY]Screenshot from LOCALiQ, July 2023

The average cost per acquisition is a core KPI that advertisers should keep a pulse on when analyzing performance.

It’s no surprise that certain industries have a much higher CPA compared to other industries. Some of the factors that can influence CPA include:

  • Average CPC.
  • Average CTR (this influences your CPC).
  • Audience targeting.
  • Conversion rate.
  • The type of product/service you’re selling.

The Careers & Employment industry had the highest CPA out of all industries at a whopping $132.95.

This is not surprising considering the possible barriers to entry during economic volatility.

In the past 12-16 months, many businesses have been forced to lay off a portion of their employees.

On the other hand, many workers are voluntarily leaving their professions to switch companies, start their own businesses, or simply take time off.

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Those factors together can result in the high CPA in the Careers & Employment industry.

However, while the CPA may be high, many businesses in that industry find that well worth the investment, considering their return on each employee.

Those industries with lower-priced products and services likely have a lower CPA goal.

The industries that showed the lowest CPA in 2023 were Automotive Repair, Services & Parts at $21.12, followed by Animals & Pets at $23.57.

Compared to last year’s data, 21 out of the 23 industries reported an increase in CPA.

Google Ad benchmarks 2023, YoY changesImage from LOCALiQ, July 2023

As mentioned above, such a large fluctuation in CPA could be due to the record inflation and economic instability of the past few years.

Summary

If you find yourself on the lower end of the spectrum compared to others in your industry, don’t fret!

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These benchmarks are meant to be a guidepost for you.

If you’re struggling to improve campaign performance, try following the tips below:

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

Make sure to check out Wordstream by LOCALiQ’s full report on benchmarks and tips to improve your campaigns.

More resources:


Featured Image: VideoFlow/Shutterstock

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Measuring Content Impact Across The Customer Journey

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Measuring Content Impact Across The Customer Journey

Understanding the impact of your content at every touchpoint of the customer journey is essential – but that’s easier said than done. From attracting potential leads to nurturing them into loyal customers, there are many touchpoints to look into.

So how do you identify and take advantage of these opportunities for growth?

Watch this on-demand webinar and learn a comprehensive approach for measuring the value of your content initiatives, so you can optimize resource allocation for maximum impact.

You’ll learn:

  • Fresh methods for measuring your content’s impact.
  • Fascinating insights using first-touch attribution, and how it differs from the usual last-touch perspective.
  • Ways to persuade decision-makers to invest in more content by showcasing its value convincingly.

With Bill Franklin and Oliver Tani of DAC Group, we unravel the nuances of attribution modeling, emphasizing the significance of layering first-touch and last-touch attribution within your measurement strategy. 

Check out these insights to help you craft compelling content tailored to each stage, using an approach rooted in first-hand experience to ensure your content resonates.

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Whether you’re a seasoned marketer or new to content measurement, this webinar promises valuable insights and actionable tactics to elevate your SEO game and optimize your content initiatives for success. 

View the slides below or check out the full webinar for all the details.

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How to Find and Use Competitor Keywords

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How to Find and Use Competitor Keywords

Competitor keywords are the keywords your rivals rank for in Google’s search results. They may rank organically or pay for Google Ads to rank in the paid results.

Knowing your competitors’ keywords is the easiest form of keyword research. If your competitors rank for or target particular keywords, it might be worth it for you to target them, too.

There is no way to see your competitors’ keywords without a tool like Ahrefs, which has a database of keywords and the sites that rank for them. As far as we know, Ahrefs has the biggest database of these keywords.

How to find all the keywords your competitor ranks for

  1. Go to Ahrefs’ Site Explorer
  2. Enter your competitor’s domain
  3. Go to the Organic keywords report

The report is sorted by traffic to show you the keywords sending your competitor the most visits. For example, Mailchimp gets most of its organic traffic from the keyword “mailchimp.”

Mailchimp gets most of its organic traffic from the keyword, “mailchimp”.Mailchimp gets most of its organic traffic from the keyword, “mailchimp”.

Since you’re unlikely to rank for your competitor’s brand, you might want to exclude branded keywords from the report. You can do this by adding a Keyword > Doesn’t contain filter. In this example, we’ll filter out keywords containing “mailchimp” or any potential misspellings:

Filtering out branded keywords in Organic keywords reportFiltering out branded keywords in Organic keywords report

If you’re a new brand competing with one that’s established, you might also want to look for popular low-difficulty keywords. You can do this by setting the Volume filter to a minimum of 500 and the KD filter to a maximum of 10.

Finding popular, low-difficulty keywords in Organic keywordsFinding popular, low-difficulty keywords in Organic keywords

How to find keywords your competitor ranks for, but you don’t

  1. Go to Competitive Analysis
  2. Enter your domain in the This target doesn’t rank for section
  3. Enter your competitor’s domain in the But these competitors do section
Competitive analysis reportCompetitive analysis report

Hit “Show keyword opportunities,” and you’ll see all the keywords your competitor ranks for, but you don’t.

Content gap reportContent gap report

You can also add a Volume and KD filter to find popular, low-difficulty keywords in this report.

Volume and KD filter in Content gapVolume and KD filter in Content gap

How to find keywords multiple competitors rank for, but you don’t

  1. Go to Competitive Analysis
  2. Enter your domain in the This target doesn’t rank for section
  3. Enter the domains of multiple competitors in the But these competitors do section
Competitive analysis report with multiple competitorsCompetitive analysis report with multiple competitors

You’ll see all the keywords that at least one of these competitors ranks for, but you don’t.

Content gap report with multiple competitorsContent gap report with multiple competitors

You can also narrow the list down to keywords that all competitors rank for. Click on the Competitors’ positions filter and choose All 3 competitors:

Selecting all 3 competitors to see keywords all 3 competitors rank forSelecting all 3 competitors to see keywords all 3 competitors rank for
  1. Go to Ahrefs’ Site Explorer
  2. Enter your competitor’s domain
  3. Go to the Paid keywords report
Paid keywords reportPaid keywords report

This report shows you the keywords your competitors are targeting via Google Ads.

Since your competitor is paying for traffic from these keywords, it may indicate that they’re profitable for them—and could be for you, too.

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You know what keywords your competitors are ranking for or bidding on. But what do you do with them? There are basically three options.

1. Create pages to target these keywords

You can only rank for keywords if you have content about them. So, the most straightforward thing you can do for competitors’ keywords you want to rank for is to create pages to target them.

However, before you do this, it’s worth clustering your competitor’s keywords by Parent Topic. This will group keywords that mean the same or similar things so you can target them all with one page.

Here’s how to do that:

  1. Export your competitor’s keywords, either from the Organic Keywords or Content Gap report
  2. Paste them into Keywords Explorer
  3. Click the “Clusters by Parent Topic” tab
Clustering keywords by Parent TopicClustering keywords by Parent Topic

For example, MailChimp ranks for keywords like “what is digital marketing” and “digital marketing definition.” These and many others get clustered under the Parent Topic of “digital marketing” because people searching for them are all looking for the same thing: a definition of digital marketing. You only need to create one page to potentially rank for all these keywords.

Keywords under the cluster of "digital marketing"Keywords under the cluster of "digital marketing"

2. Optimize existing content by filling subtopics

You don’t always need to create new content to rank for competitors’ keywords. Sometimes, you can optimize the content you already have to rank for them.

How do you know which keywords you can do this for? Try this:

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  1. Export your competitor’s keywords
  2. Paste them into Keywords Explorer
  3. Click the “Clusters by Parent Topic” tab
  4. Look for Parent Topics you already have content about

For example, if we analyze our competitor, we can see that seven keywords they rank for fall under the Parent Topic of “press release template.”

Our competitor ranks for seven keywords that fall under the "press release template" clusterOur competitor ranks for seven keywords that fall under the "press release template" cluster

If we search our site, we see that we already have a page about this topic.

Site search finds that we already have a blog post on press release templatesSite search finds that we already have a blog post on press release templates

If we click the caret and check the keywords in the cluster, we see keywords like “press release example” and “press release format.”

Keywords under the cluster of "press release template"Keywords under the cluster of "press release template"

To rank for the keywords in the cluster, we can probably optimize the page we already have by adding sections about the subtopics of “press release examples” and “press release format.”

3. Target these keywords with Google Ads

Paid keywords are the simplest—look through the report and see if there are any relevant keywords you might want to target, too.

For example, Mailchimp is bidding for the keyword “how to create a newsletter.”

Mailchimp is bidding for the keyword “how to create a newsletter”Mailchimp is bidding for the keyword “how to create a newsletter”

If you’re ConvertKit, you may also want to target this keyword since it’s relevant.

If you decide to target the same keyword via Google Ads, you can hover over the magnifying glass to see the ads your competitor is using.

Mailchimp's Google Ad for the keyword “how to create a newsletter”Mailchimp's Google Ad for the keyword “how to create a newsletter”

You can also see the landing page your competitor directs ad traffic to under the URL column.

The landing page Mailchimp is directing traffic to for “how to create a newsletter”The landing page Mailchimp is directing traffic to for “how to create a newsletter”

Learn more

Check out more tutorials on how to do competitor keyword analysis:

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Google Confirms Links Are Not That Important

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Google confirms that links are not that important anymore

Google’s Gary Illyes confirmed at a recent search marketing conference that Google needs very few links, adding to the growing body of evidence that publishers need to focus on other factors. Gary tweeted confirmation that he indeed say those words.

Background Of Links For Ranking

Links were discovered in the late 1990’s to be a good signal for search engines to use for validating how authoritative a website is and then Google discovered soon after that anchor text could be used to provide semantic signals about what a webpage was about.

One of the most important research papers was Authoritative Sources in a Hyperlinked Environment by Jon M. Kleinberg, published around 1998 (link to research paper at the end of the article). The main discovery of this research paper is that there is too many web pages and there was no objective way to filter search results for quality in order to rank web pages for a subjective idea of relevance.

The author of the research paper discovered that links could be used as an objective filter for authoritativeness.

Kleinberg wrote:

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“To provide effective search methods under these conditions, one needs a way to filter, from among a huge collection of relevant pages, a small set of the most “authoritative” or ‘definitive’ ones.”

This is the most influential research paper on links because it kick-started more research on ways to use links beyond as an authority metric but as a subjective metric for relevance.

Objective is something factual. Subjective is something that’s closer to an opinion. The founders of Google discovered how to use the subjective opinions of the Internet as a relevance metric for what to rank in the search results.

What Larry Page and Sergey Brin discovered and shared in their research paper (The Anatomy of a Large-Scale Hypertextual Web Search Engine – link at end of this article) was that it was possible to harness the power of anchor text to determine the subjective opinion of relevance from actual humans. It was essentially crowdsourcing the opinions of millions of website expressed through the link structure between each webpage.

What Did Gary Illyes Say About Links In 2024?

At a recent search conference in Bulgaria, Google’s Gary Illyes made a comment about how Google doesn’t really need that many links and how Google has made links less important.

Patrick Stox tweeted about what he heard at the search conference:

” ‘We need very few links to rank pages… Over the years we’ve made links less important.’ @methode #serpconf2024″

Google’s Gary Illyes tweeted a confirmation of that statement:

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“I shouldn’t have said that… I definitely shouldn’t have said that”

Why Links Matter Less

The initial state of anchor text when Google first used links for ranking purposes was absolutely non-spammy, which is why it was so useful. Hyperlinks were primarily used as a way to send traffic from one website to another website.

But by 2004 or 2005 Google was using statistical analysis to detect manipulated links, then around 2004 “powered-by” links in website footers stopped passing anchor text value, and by 2006 links close to the words “advertising” stopped passing link value, links from directories stopped passing ranking value and by 2012 Google deployed a massive link algorithm called Penguin that destroyed the rankings of likely millions of websites, many of which were using guest posting.

The link signal eventually became so bad that Google decided in 2019 to selectively use nofollow links for ranking purposes. Google’s Gary Illyes confirmed that the change to nofollow was made because of the link signal.

Google Explicitly Confirms That Links Matter Less

In 2023 Google’s Gary Illyes shared at a PubCon Austin that links were not even in the top 3 of ranking factors. Then in March 2024, coinciding with the March 2024 Core Algorithm Update, Google updated their spam policies documentation to downplay the importance of links for ranking purposes.

Google March 2024 Core Update: 4 Changes To Link Signal

The documentation previously said:

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“Google uses links as an important factor in determining the relevancy of web pages.”

The update to the documentation that mentioned links was updated to remove the word important.

Links are not just listed as just another factor:

“Google uses links as a factor in determining the relevancy of web pages.”

At the beginning of April Google’s John Mueller advised that there are more useful SEO activities to engage on than links.

Mueller explained:

“There are more important things for websites nowadays, and over-focusing on links will often result in you wasting your time doing things that don’t make your website better overall”

Finally, Gary Illyes explicitly said that Google needs very few links to rank webpages and confirmed it.

Why Google Doesn’t Need Links

The reason why Google doesn’t need many links is likely because of the extent of AI and natural language undertanding that Google uses in their algorithms. Google must be highly confident in its algorithm to be able to explicitly say that they don’t need it.

Way back when Google implemented the nofollow into the algorithm there were many link builders who sold comment spam links who continued to lie that comment spam still worked. As someone who started link building at the very beginning of modern SEO (I was the moderator of the link building forum at the #1 SEO forum of that time), I can say with confidence that links have stopped playing much of a role in rankings beginning several years ago, which is why I stopped about five or six years ago.

Read the research papers

Authoritative Sources in a Hyperlinked Environment – Jon M. Kleinberg (PDF)

The Anatomy of a Large-Scale Hypertextual Web Search Engine

Featured Image by Shutterstock/RYO Alexandre

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