As search engines and social media are fighting for their share of the pie, pay-per-click advertising is becoming more competitive by the day. A growing number of users rely on paid ads when shopping online, while staying on top of SERPs is more demanding than ever. As a result, keeping up with trends in a dynamic industry like paid advertising is a challenge of its own. A solid understanding of it, however, is far from impossible to obtain. From ROI and CTR to budget allocation and conversion rates, the paragraphs below elaborate on the latest PPC stats that shape the industry as we know it today.
One of the most interesting paid click advertising statistics relates to the reason why people click on search ads. A study from Clutch showed that the vast majority of users clicked on an ad because it helped them discover the information they were looking for more easily. Roughly one-third of the study participants said that ads gave them a direct answer to their search query.
This stat speaks for itself. These numbers are probably much higher today, as Facebook alone is home to more than 6 million advertisers, and together with Google Ads, they are the market leaders in PPC advertising.
Text ads are the most popular ad format according to PPC stats from a study from Clutch. Product listing ads and shopping ads take second place (31%), while video ads rank third with 16% of users favoring this ad format.
However, the source also pointed out that ad format preferences depend on the websites people use. So, 55% of those who use Google prefer text ads. 50% of people who use Amazon prefer PLAs and shopping lists, and 36% of YouTube users favor video ads.
Conversion rates relating to pay per click leads are 50% higher compared to ones funneled through organic search. This stat tells us that PPC advertising is not only effective in increasing website traffic but that it is also a powerful tool for converting visitors into customers.
A 2018 study from Clutch revealed that 45% of small business owners rely on PPC advertising even though their investments in PPC account for only 30% of their marketing budgets. On the plus side, the percentage of small business owners who turned to PPC saw a five-point increase compared to 2017, when 40% of them invested in this advertising strategy.
As the PPC advertising industry grows, we took a glance at the average salary for someone working in this industry. Based on the 87 answers on PayScale, we discovered that the average hourly rate of PPC managers stood at $16.66/per hour, which translates to an annual income of nearly $50000.
A recent study from Formstack showed that PPC ads are among the top three lead generation tools. The primary tools for capturing leads were on-page website conversion (23.9%), email marketing (18%), and PPC ads (17%).
To discover what percentage of clicks do PPC ads get, we referred to the data from WordStream, whereby the top 3 paid ads on Google’s SERPs get 41% of clicks. As the case is with traditional advertising, location seems to play a significant role in digital advertising as well. If we consider the fact that PPC ads are placed above organic search results, it is no wonder that paid ads get this big of a share of the clicks. For comparison, the top organic result gets a little under 9% of clicks.
The percentage of clicks that PPC ads get depends on the audience too. The average click-through rates for PPC ads are significantly lower for informational keywords provided by searchers who want to learn something rather than buy. On the other hand, AdWords’ effectiveness is best seen when it comes to commercial keywords. As a WordStream study reveals, nearly two-thirds of people who are searching for something with a purchasing intent will click on a paid ad. The remaining 35% of clicks are reserved for organic results.
To determine what is the average click-through rate (CTR) across search engines, we took a look at the one on the most popular ones, Google and Bing. On Google, the average CTR for PPC ads is 3.17% on the search network and 0.46% in the display network. The industries with the highest CTR on the search network are Dating and Personal Services (6%), Advocacy (4.41%), Auto (4%), and Travel (4.68%). The Real Estate industry has the highest CTR in the display network at 1.08%, which is more than double the average rate. When it comes to Bing, the average CTR across all industries is 2.83%. However, it is worth mentioning that, as you will see below, PPC results relating to CTR can vary based on ads’ position on Google’s SERPs.
Paid ads that rank first on the first page of Google have the highest CTR at 7.11%. This might not seem like a big number; however, it is more than 50% bigger than the one of the ads on the second position. More precisely, ads on the second position have a click-through rate of 3.01%. The click-through rates for the third and fourth position are very similar, at 2.19% and 2.15%, respectively, while the CTR rate for a PPC ad ranking ninth sits at 0.55%.
To determine how much is pay per click on different ad platforms, we took a look at the average cost per click (CPC) across three of the most prominent ad networks; Google, Bing, and Facebook. The average CPC in AdWords - which is also the highest among the three - is $2.69 on the search network and $0.63 on the display network. Next in line in descending order is the average CPC of a Facebook Ad, at $1.72. Even though close to Facebook’s, Bing ads’ average CPC is the lowest of the three, at $1.54.
As you can see, the average cost per click by industry greatly differs both within a single platform, as well as across different ad platforms. In relation to the case in point, the average CPC for a keyword from the Financial Services and Insurance vertical on Facebook is $3.77. The CPC of a keyword in the same category on Google Ads is slightly lower at $2.04. Finally, the CPC for a keyword of the like on Bing is the lowest at $1.82.
Retails is on top of the list of industries that spend the most on advertising. Last year, retailers invested $23.50 billion in paid advertising. EMarketer forecasts that the industry will make an even higher investment in 2019, estimated at $27.58 billion.
Other industries that make substantial investments in paid advertising include Automotive and Financial Services verticals. The investments of these two industries account for nearly one-quarter of the total US ad spend, whereas its counterpart for the retail sector alone makes up for 21.9% of the entire US ad spend.
‘Insurance’ ranks as the keyword with the highest CPC, at $54.91, while the ‘gas/electricity’ keyword costs $54.62. The keyword ‘loans’ is somewhat more affordable with a CPC of $44.28. Other expensive keywords are ‘mortgage’ and ‘attorney’. Bidders can expect to pay $47.12 and $47.07 for a click on these two keywords respectively.
Based on the numbers above, Google Ads have an ROI of 200%. Note that this is the average as there are several factors that impact the ROI in Google Ads. However, it seems to be a good enough reason for small businesses to continue investing in paid advertising. In fact, based upon research results published on WordStream, the average small business invests between $9,000 and $10000 per month in Google Ads campaigns.
To gain a better insight into AdWords statistics, we took a glance at Google’s audience and the search engine’s share of all searches in the US. Google dominates the US search market with nearly 63% of all desktop searches. Bing, as the second most popular search engine, is responsible for roughly one-quarter of all desktop searches in the US.
Google is the world’s most popular search engine, and according to advertising statistics, 2016 recorded more than 160 billion searches a day. As Search Engine Land reported, Google handled around 63,000 search queries per second in 2016, which translates to 167 billion searches per month. Today, the average number of searches per second is 73,854, which means that in 2019, more than 191 billion searches will occur on Google every month.
In 2018, digital ad spending in the US stood at $108.64 billion. Traditional media ad spend, on the other hand, was somewhat higher at $114.84 billion. This year, EMarketer forecasts that the online ad spending would climb to $129.34 billion leaving traditional media behind, for which the source predicted would generate $109.48 billion in 2019. Based on the same forecasts, Google Ads will continue to be the platform of choice for PPC advertising this year as well.
Google Ads statistics show that the tech giant is the market leader holding a share of 38.2%. Facebook is following close behind with a 21.8% market share. Amazon is still trailing behind the duopoly with 6.8% of the market. However, EMarketer also predicts that Amazon would see a 2 point increase in the online ad revenue share this year which would, in turn, diminish Google’s dominance by 1%.
Last year, Google’s revenue was $136.22 billion, while tech giant’s advertising business was responsible for $116.3 billion of it. These numbers translate to 85% of Google’s total income.
Google owns the largest display advertising network in the world with more than 2 million sites. In previous years, this network reached over 80% of the global internet audience. That number currently sits at 90% according to the latest Google AdWords statistics.
In Search Ads Pause Studies, Google’s team revealed that search ads don’t stand in the way of organic traffic. It’s quite the opposite. They discovered that when search ads were put on pause, organic clicks failed to replace 89% of the traffic generated through them.
Putting PPC ROI average values aside, Google proved that the potential of paid ads doesn’t only lie in its power to reach a broad internet audience and increase traffic. Ads are also a vital tool for raising brand awareness. The study was based on the answers of 800 consumers divided into the Test and Control group that ran a search for a specific keyword. Consumers from the Test group were shown PPC links with a test brand atop Google search results, while consumers from the other group didn’t see ads. The result?
When asked to name a brand based on the keyword, the Test group was more successful in recalling the test brand than the Control group. Google highlighted that search ads showed a 6.6 point increase in raising brand awareness, i.e., 80%.
According to a 2018 survey, when searching for products online, 35% of US consumers are turning to Google, which is one of the reasons Google Ads ranks among the top pay per click advertising platforms.
However, the same source discovered that US online shoppers favor Amazon for product searches with 46.7% of them starting their product hunt on this platform. Even though Amazon wins the battle in terms of product searches, Google users are quicker to purchase something after the research part, which usually happens within 20 days. The buying journey for Amazon users lasts almost 26 days.
Based on PPC statistics that illustrate users’ preferences when it comes to ad sources, the highest percentage of users would click on a Google ad, while with Bing ads that probability is nearly ten times lower (6%).
Not everyone uses Google for their advertising endeavors. Although Bing’s share of search queries in the US stands at 24.5%, the search engine still has a large user base. As ComScore reported, Microsoft sites have 208,795 unique visitors compared to Google’s 255,967. Unlike it is the case with Google PPC advertising, Bing is not that competitive. It has fewer users and searches but, in turn, CPCs on Bing are usually cheaper than the ones on Google.
Apart from providing more affordable cost per click rates across numerous industries, one study showed that Bing Ads have better conversion rates too. According to the study, Bing Ads had a conversion rate of 10.39%, while Google Ads conversion rates stood at 8.65%.
The source ran the same campaigns on Google and Bing, and what really drew our attention is that, apart from higher conversion rates, Bing also had higher click-through rates.
Last year, SocialMediaToday published a study on SMM spending. When asked about the platform they are currently advertising on, 91.69% of survey respondents said that they had navigated their marketing efforts towards Facebook. With these numbers in mind, it’s not a surprise many businesses use Facebook to generate pay per click revenue. Instagram was the second most popular advertising platform, whereas LinkedIn and Twitter were the next two most popular choices.
This year, PPC budgets will increase according to nearly two-thirds of marketers. In contrast, only 35% of marketers won’t make any changes in their PPC spending. As far as ad formats go, 49% of marketers plan to invest more in social ads, while the percentage of those who will increase investments in text ads sits as 60%.
One of the ways to determine how good your conversion rates are is to compare your business with other businesses from your industry. However, this can be a little tricky, as small companies cannot have the same conversion rates as large enterprises. So, the best thing to do is to keep the average industry conversion rates as a reference and focus on increasing your own. If you do this right, they should grow along with your business.
The simplest way to can calculate your ROI in AdWords campaigns is to compare the money you invested in ads to the money you earned from them. The formula for calculating ROI in Google Ads is: (Revenue - Cost of goods sold) / Cost of goods sold = ROI
If we took a look at SEO vs. PPC statistics, we would find that both of these strategies have facts and figures behind them that prove their efficiency. So, how do you decide on whether to opt for PPC or SEO? Look at the pros and cons of each of them.
On one hand, SEO takes time to show results, while PPC ads offer instant results. On the other hand, if you’re familiar with the best SEO practices and implementation techniques, this marketing strategy can be quite affordable as opposed to PPC advertising which depends on your budget.
Upon summation of the PPC stats analyzed above, one of the many takeaways is that pay per click advertising has a lot of potential in generating traffic and even more so in increasing conversions. That, as well as the reason that it shows near instant results, are the most prominent reasons why both marketers and small businesses alike are continuously investing in it, as well as raising the bar of their paid advertising budget.