Paid search advertising conversion rates have declined in almost every industry year over year. Meanwhile, the cost of generating leads through search ads continues to rise.
Do you feel déjà vu? I sure did after reading LocalIQ’s annual Search Advertising Benchmark Report, which was released today. It’s basically more of the same story as 2023.
The 2024 edition again includes data on average conversion rate, cost per lead (CPL), click-through rate (CTR), and cost-per-click (CPC).
Why we care Advertisers are paying more for leads and clicks, while Alphabet, the parent company of Google, continues to report record profits. While LocalIQ said this is due to “increased competition and intensified monetization of Google’s SERPs,” it’s hard not to wonder what “leverages” Google may be “adjusting” behind the scenes as Google keeps finding ways to justify higher prices despite not offering them. equally greater returns for greater advertiser investments.
Conversion rate: 6.96%. Conversion rates increased in 12 of the 23 industries examined by LocalIQ.
The sectors with major falls were Finance and Insurance (-32.40%) and Dentists and Dental Services (-19.57%). The industries with significant increases were Clothing/Fashion and Jewelry (+112.01%) and Career and Employment (+80.97%). The average conversion rate was 7.04% in 2023 and 7.85% in 2022.
CPL: $66.69. CPL increased by 25%, on average, in 19 of the 23 industries. However, this is a slightly lower year-on-year increase than last year (27%).
The average CPL was $53.52 in 2023 and $44.70 in 2022.
CTR: 6.42%. CTR increased by 5%, on average, for 70% of industries.
The average CTR was 6.11% in 2023 and 5.91% in 2022.
CPC: $4.66. CPC increased by 10%, on average, in 86% of industries.
The real estate, sports and recreation, and personal services industries experienced increases of more than 25% year-over-year. CPCs increased for 60% of industries, but only 2% on average. The average CPC was $4.22 in 2023 and $4.01 in 2022.
Search Advertising References 2024. Here’s the data, broken down by category (Note: A higher resolution image is coming):
the report Search Advertising Benchmarks.
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