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Search ad conversion rates down, cost per lead up in 2023

Paid search advertising conversion rates have decreased across nearly all industries year over year. Meanwhile, the cost of generating leads through search ads continues to increase, although not as drastically as in prior years.

That’s according to a new 2023 search advertising benchmark report from LocalIQ’s WordStream. It features data on the average conversion rate, cost per lead (CPL), click-through rate (CTR) and cost per click (CPC), compared to 2022.

Why we care. It’s good to understand whether you doing better or worse than your competitors in paid search so you can optimize for better results, at a lower cost. As always, in PPC, you want to always strive to be better than average.

Conversion rate: 7.04%. Only two industries (Beauty and Personal Care, Education and Instruction) avoided a decrease in conversion rate from search ads. Some of the decreases were significant, WordStream reported (e.g., Arts & Entertainment was down 36.2% YoY and Apparel, Fashion and Jewelry was down 34.9% YoY).

Industries with the highest conversion rates:

  • Animals and Pets: 13.41%
  • Physicians and Surgeons: 13.12%
  • Automotive Repair, Service, and Parts: 12.61%.

Industries with the lowest average conversion rates:

  • Apparel, Fashion, and Jewelry: 1.57%
  • Furniture: 2.57%
  • Real Estate: 2.88%

CPL: $53.52. The only two industries to see a CPL decrease were Automotive Sales (-8.6%) and Beauty and Personal Care (-3.9%).

  • 91% of industries saw an increase in CPL as well as a decrease in conversion rate, WordStream reported.

Industries with the highest CPLs:

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

Industries with the lowest CPLs:

  • Automotive Repair, Services and Parts: $21.12
  • Animals and Pets: $23.57
  • Shopping, Collectibles and Gifts: at $31.50.

CTR: 6.11%. CTR increased for all but two of the industries, according to the report. Only Business Services and Industrial and Commercial industries decreased, but WordStream noted these “weren’t as significant as the increases other industries faced.”

Industries with the highest click-through rates:

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

Industries with the lowest click-through rates:

  • Attorneys and Legal Services: 4.76%
  • Home and Home Improvement: 4.80%
  • Business Services: 5.11%.

CPC: $4.22. CPC increased for 14 industries, decreased for 8 industries, and stayed the same in Apparel, Fashion, and Jewelry. 

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.

The industries with the lowest CPC:

  • Arts and Entertainment: $1.55
  • Real Estate: $1.55
  • Travel: $1.63

2023 search advertising benchmarks. Here’s the data, broken down by category:

Audience measurement

You can dig deeper into YoY data in WordStream’s Google Ads Benchmarks 2023: Key Trends & Insights for Every Industry.

About the data. A total of 17,253 U.S.-based search advertising campaigns in 23 industries, running between April 1, 2022, and March 31, 2023, were analyzed. The search ad benchmarks are based on Google Ads 80% as well as Microsoft Ads (20%).

The post Search ad conversion rates down, cost per lead up in 2023 appeared first on Search Engine Land.

Original source: https://searchengineland.com/google-ads-bechmarks-2023-conversions-cpl-ctr-cpc-422832

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