89% of buys begin with search, and mean ROI of PPC advertising is 200%

Latest Wordstream Google Ads Industry Benchmarks Report includes clickthrough rates, costs per click, conversion rates and costs per lead for 23 industries.

Key findings for 2022 are:

• Overall, average cost per lead increased by 19%, driven primarily by inflation.
• Of industry sectors, biggest increases were in Arts/Entertainment (+134%) and Travel (+69%)
• 91% of industries saw decreased conversion rates averaging -14%.
• Overall average cost per click increased only 2%.
• Overall average clickthrough rate remained flat with 2021.

Implications for 2023:

• Inflation and high prices may cause consumers to cut back more on non-essential spending like travel and eating out.
• Slowing due to inflation of Google's earnings from advertising may result in higher costs per click and cause advertisers to curtail ad spend.
• More emphasis on top-of-funnel campaigns for awareness and consideration could reduce cost per conversion later in the sales cycle.
• Google's push to move advertisers to broad-match keywords is resulting in ads being served more often in response to queries of low purchase intent, which increases cost per conversion.
• With 98% of pay-per-click advertisers using Google Ads, intense competition drives higher click bids and results in fewer clicks per advertiser.

Comments:

• To improve conversion rates and cost per conversion, stay on top of your negative keywords list by regularly reviewing the Search Terms report and adding those that indicate no commercial intent, are seeking your competitors, or otherwise are of little or no value. Remember that negative keywords is the one thing in Google Ads that really uses exact match.
• Make sure keywords on which you're paying for clicks are consistent with intent to buy and not simply drawing research queries.
• Google Display Ads may not make many sales but aggregate click charges will probably be low and you can get many impressions at no extra cost, increasing your online visibility and reputation at the top of the funnel.
• You will probably have to bite the bullet and increase your click budget right now and maintain a higher level throughout 2023 or until the Fed gets a handle on inflation.