The cost of generating leads through search ads has risen, while conversion rates fell across nearly all industries year-over-year (YOY).
Analysts at LocaliQ’s Wordstream looked at 17,253 U.S.-based search-advertising campaigns running between April 1, 2022 and March 31, 2023 to create an in-depth search advertising benchmark for 23 industries. About 80% are attributed to Google Ads based, with the remaining 20% attributed to Microsoft Advertising.
The 2023 report for key trends and insights features data on the average conversion rate, cost per lead (CPL), click-through rate (CTR) and cost per click (CPC), comparing the data in the 2022 report.
The CPL rose YoY for all industries but two -- Automotive Sales, and Beauty and Personal Care. This means 91% of industries saw an increase in how much it costs them to acquire a lead through search ads. This trend is similar to what LocaliO’s Wordstream saw in its 2022 data, but the 2023 update shows these increases YoY have slowed.
The biggest increases in CPL YoY were Career and Employment, up by 52.19%; Arts and Entertainment, up by 49.18; and Real Estate, up by 46.22%.
The average cost per lead in Google Ads this year is $53.52, according to the study. The top five areas for average cost per lead by industry includes:
All but two industries — Beauty and Personal Care, and Education and Instruction — experienced a decline in conversion rates. The industries with the highest conversation rates include:
The three industries with the lowest average conversion rates were Apparel, Fashion, and Jewelry at 1.57%; Furniture at 2.57%; and Real Estate at 2.88%.
The industries with the highest click-through rates included Arts and Entertainment: 11.78%, Sports and Recreation at 10.53%, and Travel at 10.03%. The industries with the lowest click-through rates included Attorneys and Legal Services at 4.76%, Home and Home Improvement at 4.80%, and Business Services at 5.11%.
The detailed report also provide comparisons between 2022 and 2023 numbers.