benchmark for google ads conversion rate

Benchmarks for Google Ads Conversion Rates

Google ads can be a highly effective way to drive business when doing digital marketing. It can also be used to drive customers visiting your site, especially if you’re advertising locally. But what criteria can you measure against to say you’ve had an effective Google Ad campaign?

To get you started, a quick Google search will tell you what sort of Google Ads benchmarks are the average in your industry. Once you’ve got something to compare to, you can start to drill down into the specifics of your own ad campaign to see how effective it is.

Here are some benchmarks to consider. Remember that these are quite vague, so you should really delve into your specific industry after this.

More about the average conversion rates can be found here in the section 5. Industry Benchmarks of a Good Conversion Rate. Before we dive deeper into what metrics to track, let’s go over the difference between Google search ad and display ad.

Google Search Ads

These are the ads that appear at the top of the search results, and have that tiny “ad” tag attached to them.

Their purpose is to pull the people to your site that are already looking for a solution you can offer.

There are sometimes a handful of these ads before the first organic search results shows up.

Google Search Ads Formula

These ads consist of three main parts:

  1. Headline
  2. Display URL
  3. Description text

They should all be aligned with convincing the searcher that you’re able to solve the issue the search began in the first place.

Google Display Ads

Display ads are every other type of ad that has nothing to do with SERP. It can be targeted based on different parameters, such as:

  • Demographic targeting (age, gender, education,..)
  • Lifestyle targeting (DYIs, adventurous people, outdoor people, …)
  • Demographic targeting (country, city, part of city, …)
  • Contextual targeting (select pages by topic, keyword/intent, select URLs by hand)

Where to Place Display Ads

  • Banner ads
  • Natively on social media news feeds
  • Next to the social media feed as a sidebar
  • Personal email inboxes

Click Through Rate

Click through rate (CTR) is the first indicator of how successful your conversion rate might be. It’s basically a measure of the percentage of clicks your ad got out of a total number of impressions.

In other words, it measures whether people were just scrolling past your ad, or was it engaging enough for people to click.

click through rate formula

The average click through rate across all industries is 5.06%, but different industries have different variances.

For example, dining and nightlife have a higher CTR around 6.63% as people want to click on lots of different options when choosing a new restaurant to visit. The purchase intent of these searches is high and users want to find the best solution for them.

More general stores are typically closer to the average CTR across all industries, which is 1.91% for search ad and 0.35% for display ad.

To improve click through rates, try and add a special deal in your headline to entice customers in. And don’t forget to display your main keyword in your URL. People are likely to click, if you are able to speak directly to them.

Cost Per Click

This is how much you’ll be charged every single time someone clicks on your ad. The average across all industries is $2.41. This can be a difficult score to analyze, because it all depends on how many conversions you’re getting at the end of it.

CPC cost per click calculation formula

You can try and weed out customers that aren’t going to convert by better targeting your keywords, and even using negative keywords. These are words that are deliberately excluded and prevent your ads from showing up to users who search for certain phrases.

For example, you might sell black hiking boots, but don’t want your ad appearing to people looking for other types of boots, then clicking your ads and costing you money. So you can exclude your ad from any search that doesn’t contain the word “hiking”. This is a metric you’ll need to keep an eye on and track over time.

Conversion rate

This is the big one.

conversion rate formula

The metric that tells you how many people who clicked on your ad actually bought your product, and the conversion rate averages 4.40% across all industries. If you’re finding your conversion rate is much lower than this, it might be a problem with your post-click experience.

What do customers see when they click your ad? Is your website easy to navigate? Are they taken straight to a chance to purchase or are they presented with confusing options?

Make sure the site your ad links to is completely clear, making it obvious for you customer how to purchase.

Cost per conversion

This is the total cost of the Google ads it took to generate one sale, and the industry average is $56.11. If you’re finding that your cost per conversion is higher than the value of your actual sales, then you might be in trouble. For example, if it’s costing you $60 to make a sale, but customers are only buying $30 worth of products, then you need to change your tactics.

Your cost per conversion will tend to be higher for those with longer sales cycles, such as high end electronics or other expensive items. Make sure you keep a close eye on this metric, or you could start to hemorrhage cash.

Conclusion

Ultimately, the success of your Google Ads campaign is going to be measured in conversions. It’s completely possible for you to have a high cost per click or cost per conversion rate, and still have a successful campaign. Remember to start out by benchmarking against those in your industry, before regularly reviewing.

FAQ

What is a good conversion rate for Google Ads?

The average CTR across all industries is 5.06%, but different industries have different variances.

How can I improve my Google Ads conversion rate?

Add social proof to your marketing. It’s proven to increase conversion rates.

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