Updated Search Advertising Benchmarks for 2023 (+Expert Tips to Improve Results)

Even if you’re familiar with search advertising, it can still feel a little magical to see an ad that perfectly matches what you’re searching for on Google or Bing. You’re looking for the best vet in your area, and *poof*–an ad for “best vet Dallas” pops right up. It makes searching almost too easy.

And that’s the point. As a business owner, you want to capture these searchers and turn them into customers—especially when 88% of searches for a local business result in a call or visit.

It makes search advertising a no-brainer.

What’s not a no-brainer: What to expect from your search advertising campaigns. For instance, what’s the average click-through rate, cost per click, or conversion rate for search ads? Are your results in line with industry averages? What can be done to improve your search advertising results if not?

In partnership with our friends at WordStream by LocaliQ, we’ve dug into the data from thousands of our customers’ advertising campaigns across Google and Bing to create search advertising benchmarks for the top 20+ industries.

These updated search advertising benchmarks are broken down into:

• Average cost per click
• Average click-through rate
• Average cost per lead
• Average conversion rate

Plus, WordStream created helpful charts so you can find what you’re looking for—fast—and compare data from 2022 to this year!

We’re sharing some of the data along with expert insights and tips here. But if you want to check out the full charts and comparisons (which we highly recommend!), you can do so here.

Average cost per click for search advertising

Search advertising is a cost-effective advertising strategy—and the average cost per click (CPC) really shows that across all industries we looked at, despite a bit of an increase over the last year.

The average CPC for search advertising across all industries in 2023 is $4.22.

The lowest average cost per click came from Arts & Entertainment and Real Estate search advertising campaigns at $1.55, while Travel was close behind at only $1.63 per click.

Other industries that had a low CPC include Sports & Recreation and Restaurants & Food, both with CPCs under $2.

Mark Irvine, Director of Paid Media at SearchLab, noted that even those industries with slightly higher CPCs are reasonable when you take into account the cost per average customer.

Mark also called out industries like Attorneys & Legal Services, which have consistently seen higher CPCs than other business types.

“A lot of the industries that have historically been the most expensive continue to be the most expensive,” he said. “And that has to do with the cost for the most popular keywords in those industries, which tend to be the most expensive keywords across the board.”

Kelsie Mixon, a customer success manager for LocaliQ, said CPC is a metric she generally keeps a close eye on.

“It’s important that we’re constantly checking on the campaigns to make sure our bids are appropriate for each keyword. If our CPC is too high, we won’t be able to prove a valuable return on investment,” she said.

Learn more about what CPC is, and keep reading for expert tips to control your CPC!

Average click-through rate for search advertising

In search advertising, your click-through rate (CTR) can tell you a lot. A low CTR might be a sign of a poor offer, insufficient targeting, or ad copy in need of optimization.

High CTR would tell you that your search ads are connecting with your audience—and driving them to take action.

The average CTR for search advertising in 2023 across industries is 6.11%.

Many of the industries we analyzed saw a fairly high average CTR—over 10% for Sports & Recreation as well as Travel

To put that into perspective, available data shows an average CTR across all industries for Google Ads between 3-5%. Almost every industry listed outperforms that data, putting the average across all industries over 6% (It’s important to note that the data includes both Google Ads and Bing Ads, which may also account for higher CTRs).

Every expert we talked to agreed that CTR is a great indicator of how your search advertising campaigns are performing.

“CTR tells you how your ads are performing and can provide valuable information you can use to optimize your search ads to pull in more clicks—and more conversions,” said Susie Marino, PPC expert and LocaliQ senior content marketing specialist.

Amy Bishop, owner of PPC agency Cultivative Marketing, said that while CTR is a good metric to measure, it shouldn’t be the main indicator of PPC success.

“I generally advise that CPC and CTR are health metrics. They’re important to keep a pulse on and to use as levers to achieve your goals. However, they aren’t KPIs. Focusing too much on CPCs or CTR as a KPI can be detrimental, so it’s important that bettering these metrics is never at the expense of more important metrics like return on advertising spend,” she said.

Average cost per lead for search advertising

Cost per lead (CPL) is an essential PPC metric for your search advertising campaigns. It measures more than just an action taken on your ad—it shows how much you spend for a user to click on your ad and contact you in some way, whether by phone, chat, form fill, or email.

The average CPL for search advertising in 2023 is $53.52.

We found that Auto Repair and Arts & Entertainment had average costs per lead under $25. Several other industries, including Sports & Recreation and Shopping, Collectibles & Gifts had average costs per lead under $35.

For industries with a little higher CPL, such as Attorneys & Legal Services, it's important to think about the average lifetime value of a customer. When you consider that number, these costs are fairly low, which further speaks to the effectiveness of search advertising.

Brett McHale, founder of Empiric Marketing, said that while CPL is important, it ultimately comes down to how the business is converting leads.

“You can manage higher CPLs if the bottom line is growing,” he said.

Get expert tips to maximize results despite increased CPLs here.

Average conversion rate for search advertising

The conversion rate for search advertising is determined by the number of leads you get divided by clicks. The average conversion rate for Google Ads in 2023 across industries is $7.04.

Our benchmarks show many industries, including Physicians & Surgeons, Auto Repair, and Arts & Entertainment have high average conversion rates—over 12%.

The search experts we talked to had mixed advice when it comes to conversion rate—some experts, like Brett, said they counted conversion rate as one of the most important PPC metrics to measure and a true signifier of success.

“The cost per lead and that lead’s conversion rate down the sales funnel is what is most important to my clients who are running search advertising to get leads,” he said.

Others, like Mark and Susie, say they don’t typically look at conversion rate—but rather the number of conversions and revenue coming in as a result of local search advertising.

Susie noted that the conversion rates our clients are seeing are on the “higher end” from what she’s observed, which speaks to LocaliQ’s technology that optimizes campaigns based on what’s driving conversions.

6 expert tips for better search advertising results

While benchmarks are a useful tool in identifying what you might expect for your business when running search advertising, it’s important to note that there are multiple factors that influence results. These include budget, location, keywords, and more.

So we asked the PPC experts for their top tips for improving search advertising performance. Here’s what they had to say.

1. Set the right goals for your search ads

This was the top tip shared by almost every PPC expert we talked to.

“Start with your ultimate goal: How will you decide if this campaign is successful? Then build everything around that,” said Amy.

It's also important to set realistic and attainable goals based on your unique business.

“Each business has a wholly different strategy for what a customer is, how they approach getting that customer, and how much they’re willing to pay for that customer,” said Mark.

Think about what this means for your business as you’re setting your search advertising goals.

2. Run search ads on more than just Google

When it comes to search advertising, many businesses rely on Google Ads alone. While Google Ads is an integral part of a successful search advertising strategy, you can actually get better results by running your search ads across platforms, including Bing.

Bing Ads have been shown to have higher conversion rates—and the average Bing user has a higher average income than the average Google user.

Running ads across both search engines also gives you access to more inventory, meaning more opportunities for clicks and conversions, Mark said.

So when it comes to your search advertising strategy, make sure to run your ads on both Google and Bing and optimize your budget for the placements and keywords that work best on each platform.

3. Choose the right search advertising budget

It’s no secret that search advertising is all about pay to play—it’s known as pay per click for a reason! To get the best results, you have to set and optimize the right budget for your search ad campaigns. This means understanding what you’ll have to invest to get the results you want.

It's important small businesses understand they may not see these results or the same type of results immediately after starting search advertising.

When you have a new account, face low-volume keywords, or have a small budget, these results aren’t realistic. PPC is an investment, and it takes time.

4. Look for the best keyword opportunities

Certain keywords may be more expensive and may not be driving the best results for your business. By identifying the right keyword strategy, including a varied mix of keywords and keyword phrases, you can zero in on what’s working to drive the most clicks and calls for your business.

For example, you might be bidding on a broad keyword like “lawyer Kansas City,” which is a high-competition and high-cost keyword, when you could narrow your focus to “personal injury attorney Kansas City” or try a newer keyword strategy that might help you capture better searches.

Mark said this is where small businesses have an advantage over the big brands.

“The big guys are fighting against each other for the big keywords, and the smaller businesses have the opportunity to come in a lot lower for more experimental keyword strategies that the big businesses can’t or won’t try,” he said.

Additionally, Amy suggested choosing PPC keywords that align with where your customers are in the sales funnel to increase clicks and conversions.

“While we can’t always perfectly identify a searcher’s intent, we can make some assumptions about which keywords are likely to result in certain actions,” she said.

5. Create high-converting landing pages

One of the best ways to improve your click-through rate and your Quality Score (which is something Google looks at when determining both your Ad Rank and your cost per click) is to optimize your landing pages around your search advertising campaigns.

The more your landing page ties into your search ad copy, the better chance you have at converting. It’s also important for your landing page to have a clear call to action, load quickly, and be optimized for mobile devices (we’ll talk more about that next!).

Francine agrees: “If your site is not doing its job, you could have the best CPC and CTR in the world, but it will never convert.”

Get tips for building high-converting landing pages.

6. Make your search advertising mobile friendly

As more and more people search on mobile, this is a crucial piece of a successful search advertising strategy.

Grecia Maness, team lead for client success managers at LocaliQ, said this is her number one tip for clients looking to improve their search advertising campaigns.

“You need to make sure your website and landing pages are mobile-friendly and mobile-optimized,” she said. “It’s a little thing that will really impact your search advertising performance.”

Grecia suggested checking how your landing pages and website perform on mobile if you begin seeing a lag in performance.

“If I notice conversion rate start dropping, the first thing I do is check the site on mobile. If it isn’t optimized or takes too long to load, I know fixing those issues will bring better results for our search campaigns.”

What do these search advertising benchmarks mean?

Search advertising benchmarks can do just that—give you a helpful benchmark to compare your search advertising results. But, as our experts cautioned, the true measure of success is more about how your business is converting the leads you get from search advertising. Use benchmarks as a handy guide and use these tips to fine-tune your search advertising strategy to get the best results for your business.

Stephanie Heitman

Stephanie is the Associate Director of Content for LocaliQ and WordStream. She has over 10 years of experience in content and social media marketing and loves writing about all things digital marketing. When she’s not researching the latest and greatest marketing news and updates, she’s probably watching reality TV with her husband, reading, or playing with her two pups.

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