My friend, Larry Kim just published some research his company Wordstream just released. Wordstream used the data collected by the AdWords Performance Grader, a free AdWords account audit tool which has evaluated over $1 billion dollars in annualized spending on Google in the last year (roughly 2.5% of total advertising revenues on Google!). For their report, they used metrics from accounts that were evaluated between July 1, 2012 and October 30, 2012.
Here is a breakdown of conversion rates by industry for both Adwords PPC search network and display network:
Industry - – - Search CR – - – Display Network CR
Finance: 6.12% - – - 5.12%
Travel: 1.45% - – - 2.99%
Shopping: 3.58% - – - 2.19%
Jobs & Education: 6.09% - – - 2.09%
Internet & Telecom: 6.27% - – - 2.96%
Comp & Electronic 4.79% - – - 2.09%
Biz & Industrial: 4.23% - – - 4.10%
Home & Garden: 2.21% - – - 3.43%
Auto & Vehicles: 4.29% - – - 6.15%
Beauty & Fitness: 4.56% - – - 2.27%
They also shared additional benchmarks such as ad impressions, click through rate, number of clicks, cost per click, and completed sales. Check out the infographic below:
Wordstream’s practice of using averages like this is potentially misleading, and meaningless to individual advertisers.
What’s a conversion?
What’s it worth – to you?
What’s your back end?
Are you earning more than you spend on AdWords clicks and conversions?
That’s the only meaningful metric – but how can you tell?
Different businesses in the same industry can bid on the same keywords, yet get drastically different results on their bottom line.
Only the individual business is in a position to assert the value of their AdWords account – and most don’t have a clue how to do that!
Most small and medium businesses should not be allowed within a million miles of a website, shopping cart, or paid advertising – because they don’t have the resources to ensure profitability.
My Commission-only management service at http://www.davidnrothwell.com ensures that carefully selected advertising partners only pay me for the value of their investment in paid advertising – and that they know they are earning more than they spend by it.
They have unlimited budgets because the concept doesn’t apply any more.
I also write more about that and the role of SEO at http://mixergy.com/course-cheat-sheet-wordpress-seo/
Thanks for reading!
I would have preferred to have seen these numbers with a +/- range of deviation. It would make it more helpful. You have to be careful with every use of an “average” metric.
Though the Industrial rate may not apply for every individual company within each industry category, it serve as a good initial benchmark for company to assess how they fare with industrial average.
Interesting to see these numbers but I tend to agree with David. It’s all relative to other aspects, e.g. order value, lead value, budgets, etc., but thanks for sharing.
I have analysed quite some Adwords accounts, these Conversion Rates are very high compared with what I have seen. I must say conversion for our customer is a sale. The rest (newsletter sign-up, create account, download pdf, etc) is just an assisted conversion.