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• Report overview
  1. All metrics
• Average cost per click
• Average cost per lead
• Average click-through rate
• Average conversion rate
• Overall costs
• Key takeaways
• Mobile-friendly view

To assist you in evaluating, refining, and optimizing your campaigns and expenditures, this study offers benchmark data for 2022 search advertising. Key information regarding the report is as follows:

The information comes from more than 18,000 LOCALiQ client campaigns from the previous year to the first quarter of 2022.

Although each campaign’s budget is adjusted among search channels by our proprietary technology, Google Ads received 82% of the total spend, while Microsoft Ads received 18%.

Average cost per click, average click-through rate, average cost per lead, and average conversion rate are among the metrics discussed.

Mitchell Leiman, Senior Vice President and General Manager of Digital Marketing Solutions at LOCALiQ, stated, “We are excited to share our updated search advertising benchmarks.” “When done right, search advertising continues to be one of the most successful marketing methods in today’s difficult climate, which is characterized by economic uncertainty and privacy-driven shifts in digital advertising. We hope that this information will help you evaluate and improve your performance!

Click-through rate, conversion rate, cost per click, and cost per lead for search ads in 23 different industries are shown in the table below. To arrange the list by metric, click on any of the metric names.

The amount that an advertiser spends each time a user clicks on one of their adverts is known as the average cost per click, or CPC. Your CPC may be impacted by a number of variables, including the competition of the keywords you are bidding on and your industry. Check out this useful infographic to learn how Google Ads calculates CPC.

The average cost per click (CPC) for search ads in 2022 was between $2 and $4. The industries with the highest average CPCs, which ranged from $6 to $8 per click, were attorneys & legal services, dentists & dental services, and home & home improvement, just like in prior years. Given that these sectors frequently have lower click-through rates, which can raise CPCs, this is to be expected. These industries have greater marketing expenses, more lengthy decision-making procedures, and intense competition. But because their services are more expensive, each conversion is worth more.

Conversely, sectors with the lowest CPCs, usually less than $2, were travel, real estate, and arts & entertainment. Higher click-through rates typically assist these industries maintain lower cost per click (CPC) prices.

The cost per click changed more significantly in some industries than others year over year. With CPCs falling by 17% and 11%, respectively, Beauty & Personal Care and Finance & Insurance experienced the biggest declines. The largest increases, with CPCs increasing by 16% and 12%, respectively, were seen in the travel and furniture industries. Increased competition following the lifting of COVID limits in 2021, which resulted in an increase in travel activity, is probably the cause of the spike in Travel CPC.

Make your advertising and landing pages more relevant to increase your Quality Score if your cost per click is higher than the industry average. Lowering your CPC can be achieved by employing negative keywords, conducting keyword research, and making sure your account is properly structured. Check out our guide on cost per click reduction for more tactics.

But keep in mind that it’s not always essential or the greatest strategy to go for the lowest feasible CPC. Higher bids may be necessary for certain keywords with greater intent and value in order to increase clicks and conversions. Despite its importance, CPC is only one component of the total plan.

The relevance of your advertisements to the target demographic is gauged by the average click-through rate, or CTR. CTR is simply the ratio of impressions to ad clicks. A CTR of 1%, for instance, indicates that one click will be made for every 100 persons who see your advertisement.

The average click-through rates (CTR) for the majority of the industries we examined fall between 6 and 7%. Outliers continue to follow past patterns: Arts & Entertainment tends to do better, with a CTR of about 11%, while Attorneys & Legal Services normally have a lower-than-average CTR of 4%. As previously noted by search specialist Mark Irvine, the legal sector is subject to certain advertising regulations enforced by both search engines and governmental bodies, which have affected CTRs in the past. But in recent years, this indicator has improved for legitimate advertising.

CTR has increased year over year in practically every industry, indicating that advertisements are getting more relevant to users. Improvements in search engine algorithms and advertisement strategies, such as enhanced AI and better matching methods, may be the cause of this development. Shopping, Collectibles & Gifts was the only industry to witness a dip in CTR, with a 13% decrease. Sports & Recreation saw the biggest rise in CTR, up 14%, most likely as a result of post-pandemic customers feeling more at ease going back to fitness facilities.

Refine your keyword list to make sure the terms you’re targeting closely match your business if your click-through rates are below the industry average. To find out which features, advantages, and emotional appeals your audience responds to the best, try experimenting with various ad content strategies. Optimizing your targeting to send more specialized messages can also have an impact. See our in-depth guide for more advice on raising your CTR (and other important PPC metrics).

Though a higher click-through rate will lower your cost per click, keep in mind that if the clicks aren’t related to your business, it might raise your cost per lead. CTR is just one part of the larger picture, much like cost per click.

The percentage of users that click on your advertisement and go on to complete a desired activity, like buying something or becoming a lead, is known as your conversion rate. Signing up for a free trial, completing a form for a service quote, or achieving any other goal that fits with your company’s goals are examples of conversion actions.

Search conversion rates can differ significantly by industry, from as low as 2% for Furniture and Apparel/Fashion & Jewelry to as high as 15% for Physicians & Surgeons and Animals & Pets. At 13%, dentists and dental services follow closely behind. According to the search advertising standards for 2021 and 2022, these sectors have continuously had the highest and lowest conversion rates.

The 34% rise in conversion rates for arts and entertainment is one encouraging trend, most likely the result of changes in consumer behavior brought on by the epidemic. However, there was a more than 50% decline in sectors like fashion, collectibles & gifts, and shopping. This decrease may be explained by consumers doing more product research online yet buying in-store, underscoring the growing need of an omnichannel marketing approach.

Start by adopting a comprehensive strategy and making sure that your services and advertisements complement the purpose of your audience and keywords. Are you successfully responding to their query or offering a convincing solution to their issue?

Concentrate on improving your landing page if you are certain that your offer or product is a good fit. Can visitors easily proceed to the following step? Think about whether your website isn’t mobile-friendly or if your form is too lengthy. To determine what works best, test components such as your call-to-action (CTA), copy, and landing page layout. Your conversion rate may be greatly impacted by these adjustments.

Calculated by dividing the overall campaign cost by the total number of conversions, cost per lead (CPL) is also known as cost per action, cost per conversion, or cost per acquisition.

Although a lower cost per lead (CPL) is typically desirable, industries with higher customer value can defend paying more per lead. Cost per lead (CPL) is frequently a more complicated metric than cost per click (CPC). Careers and Attorneys & Legal Services have the highest cost per lead, both above $80. Closely behind, at about $75 apiece, are Business Services, Finance & Insurance, and Furniture. Lower-end businesses with costs per lead under $18 include Animals & Pets and Automotive Repair, Service & Parts.

The Career and Employment industry experienced one of the largest year-over-year changes in CPL, rising 52% from $54 to $81. This is explained by a 10% rise in click-through rate, which frequently results in a lower conversion rate and a higher cost per acquisition (CPL). This change may also be influenced by the persistent labor shortage.

It’s interesting to note that the cost per lead in the Beauty & Personal Care sector decreased by 22%, from $51 to $40.

Getting a lot of clicks that don’t turn into leads can frequently lead to a high cost per lead (CPL). Use more targeted keywords that are closely related to your business and prequalify customers with more detailed ad copy to increase the quality of your PPC leads.

Additionally, you could want to assess which ads and keywords are generating conversions at a reduced cost. Cost-efficiency can be increased by allocating a larger portion of your budget to those high-performing, high-intent keywords. Additionally, as Microsoft Ads frequently have lower prices, you might want to look into them if you’re just using Google for your paid search ads. You can optimize your entire advertising expenditure by running adverts on several search engines.

Remember that while higher expenditures typically result in higher CPLs, they also typically provide more leads.

See these Google Ads cost-saving techniques for additional ways to keep expenses low.

The following graphic illustrates how cost per lead (CPL) and cost per click (CPC) can vary by industry. It’s interesting to note that a high CPC does not necessarily translate into a high CPL.

For example, both industries have an average CPL of $50, but the average CPC for dentists and dental services is significantly higher than that of the arts and entertainment sector ($7.00 vs. $1.50). This is because the conversion rate for Arts & Entertainment is lower (5%) than that of Dentists & Dental Services (11%). Why is that? Instead of committing to a non-refundable event ticket, people are more likely to fill out a contact form or arrange a dentist visit, which is frequently rescheduled.

Additionally, because consumers are more likely to explore alternatives in the Arts & Entertainment category, the click-through rate is higher. However, those who are seeking dental care usually know exactly what they need.

A low click-through rate (CTR) does not necessarily result in a greater conversion rate, even if a high CTR is frequently associated with lower conversion rates. For example, Business Services has a substantially lower CTR (5% vs. 11%) yet a similar low conversion rate (5%) to Arts & Entertainment. Furthermore, its conversion rate is significantly lower (5% vs. 13%) even if its CTR is comparable to that of Dentists & Dental Services.

This trend makes sense because, in contrast to sectors like arts and entertainment, customers for business and dentistry services typically know exactly what they need, which reduces exploration and lowers average CTR. However, there are additional obstacles to acting right away because the B2B purchasing process sometimes involves numerous decision-makers. In contrast to the simpler decision-making process for dental clients, this leads to a lower conversion rate for Business Services.

This illustrates how different benchmark profiles result from variations in industry-specific purchasing patterns. Accurately evaluating your performance requires an understanding of the industry-specific performance criteria. See our tutorials on comprehending Google Ads expenses and using the Google Ads budget report for additional help in controlling and assessing your expenses.

When examining the data as a whole, some distinct patterns show up. Click-through rates have increased, but the cost per click has stayed largely unchanged from year to year. What, therefore, is causing the cost per lead to increase across different industries? Here’s what we think.

The pandemic’s lingering effects are still felt in the advertising industry. Given that customer priorities and behaviors change as circumstances do, this is not surprising. According to LOCALiQ’s VP of Ad Products, Katia Hausman, “The pandemic is a major factor here.” The dips in CPC and the rises in CTR are clearly correlated when we look at the data per quarter and connect it with COVID waves.

Over the past year, a lot of companies have raised their advertising expenses, especially as the economy has recovered from the pandemic’s initial effects. Most firms are willing to accept the trade-off of increased acquisition expenses as a result of this increase in spending in order to increase lead generation and spur growth.

There is still fierce competition in the search advertising market. Because they enable companies to connect with customers when their desire to buy is at its peak, search advertising are extremely effective. Actually, 89% of consumers start their purchasing process by using a search engine. But this success also contributes to the fierce competition in search advertising. Advertisers must raise their bids to stay visible as more companies enter the market and others reenter after the outbreak.

The way that consumers search is also changing. According to Stephanie Scanlan, LOCALiQ’s Vice President of Client Success, “people search differently now than they did before.” “They know there are plenty of options, so they tend to conduct more searches and explore a wider variety of choices before making a purchase.” Because of this, advertisements are receiving more clicks but fewer conversions, which eventually lowers conversion rates and raises cost per lead.

The evolution of search engine results pages (SERPs) is another important aspect. More advertisements are being displayed in queries with less commercial aim than in the past. “We’ve seen a trend toward more aggressive monetization of traditionally informational SERPs,” says Elisa Gabbert, Director of Content and SEO at LOCALiQ. “This reduces organic CTR, leading to situations where advertisers may see higher CTR but lower conversion rates, as the clicks often come from visitors with no immediate intent to convert.”

Search advertising continues to be one of the most profitable marketing avenues despite these obstacles. 32% of marketers believe that sponsored search is their best-performing channel, according to a recent research, and PPC typically yields $2 for every $1 invested. The Google Ads Performance Grader provides a free report card with personalized suggestions on how to enhance your search ad performance if you’re not entirely happy with it.

In North America, a sample of 18,228 LOCALiQ customer campaigns from a variety of company sectors that ran search advertising on all search engines between December 17, 2020, and February 17, 2022, served as the basis for this research. There are at least 68 ongoing customer campaigns in each business category. In order to account for outliers, the “averages” that are displayed are actually median values. All financial data is presented in US dollars.

The report’s charts and our benchmark data for 2021 are available in an interactive style on our benchmarks hub website. As additional information becomes available, we’ll keep updating this page.

The information in this report is presented below in HTML table format to provide accessibility. The material is simply legible on mobile devices and is search engine and screen reader accessible thanks to this format.