What Are PPC Benchmarks?

Pay-per-click (PPC) advertising has tremendous potential for businesses of all sizes, with roughly 63% of people having clicked on a Google ad. It can propel a small business with no online presence into a global powerhouse and keep established companies on the cutting edge of their industries. 

But with so many fluctuating metrics to track, how do you know what results are good or bad? Enter PPC benchmarking. PPC benchmarking is the process of comparing the metrics from your campaigns against industry averages and best practices. Having benchmarks gives context to your numbers, helping you interpret performance as above, below, or on par.

There are two main types of PPC benchmarks to consider:

• Internal benchmarks - Refers to your own historical metrics that you track over time. Comparing month-to-month or year-over-year allows you to measure personal growth.
• External benchmarks - Industry averages and competitors' PPC metrics. Seeing how you stack up against the market to scale your competitiveness.

Why PPC Benchmarks Matter

Benchmarks provide insights you don't want to miss. They allow marketers to make smarter, data-driven decisions. Here are some of the key reasons why benchmarking should be an integral part of your PPC strategy:

• Measure Progress: Enables you to gauge improvement over time. You can determine if initiatives are moving the needle.
• Identify Gaps: By comparing your PPC metrics against industry averages, you spot areas where you fall short of competitors. It reveals opportunities for improvement.
• Set Realistic Goals: You can set practical goals for certain PPC metrics based on what's realistically attainable.
• Allocate Budget: Determine if search or display deserves more budget. This decision is based on relative performance data.
• Save Money: Optimizing to improve metrics will make campaigns more efficient. The result is PPC cost savings.

Key Metrics to Benchmark in PPC Campaigns

Tracking a few key metrics can help you see how your PPC campaigns are really performing. Here are 4 top ones to keep on your radar:

Click-Through Rate

CTR shows how often visitors click your ad when they see it. To find it, simply divide clicks by impressions.

(Clicks ÷ Impressions) x 100 = CTR

Marketers watch CTR to get a sense of how compelling their ads and landing pages are. Low CTR often means issues like weak keyword targeting or a mismatch between ads and what searchers want.

Cost-Per-Click

CPC is what you pay each time your ad gets clicked. In most cases, the auction on your ad platform automatically sets this. It varies based on your bid strategy and competition. Sharply rising CPC may signal more competition or poor quality scores.

Use CPC benchmarks to:

• See if you're overpaying or underbidding for clicks.
• Spot increasing competition for your keywords.
• Compare costs across campaigns, ad groups, or competitors.

Conversion Rate

Conversion rate shows the percentage of ad clicks that convert (like a purchase). Get it by dividing conversions by clicks.

(Conversions ÷ Clicks) x 100 = Conversion Rate

This helps evaluate how effective your landing pages and messaging are. You can see if you're under or overperforming for conversions and optimize for better results.

Falling conversion rates suggest issues turning away customers.

Tracking these key PPC metrics lets you spot opportunities to improve performance! Let me know if you need any clarification or have additional questions.

Cost-Per-Acquisition (CPA)

Finally, CPA refers to the average cost to acquire a conversion. It can vary from channel to channel, so you must calculate it with the following formula: 

(Total cost for channel /number of attributed conversions) x 100 = Cost-Per-Acquisition

Since CPA accounts for both CPC and conversion rates, it summarizes PPC success in a single dollar amount. Higher than average CPA indicates challenges in converting clicks into customers. As such, it is one of the most commonly used metrics to analyze Return on Ad Spend (ROAS).

Tracking PPC Metrics Over Time

When you monitor your metrics over longer periods, you can identify patterns and set smarter goals.

Identify Trends and Seasonality

Metrics often vary predictably over months and quarters based on seasonal factors. Knowing when fluctuations occur allows you to plan ahead.

Set Goals Based on History

Use past monthly averages to set benchmarks for metrics you want to achieve. Increment goals slowly and steadily versus sudden dramatic changes.

Breakdown Metrics by Campaigns and Ad Groups

Drill into metrics for each campaign and ad group rather than just overall so you can quickly spot low and high performers.

Compare Search vs. Display

View metrics separately for search and display campaigns. You can then shift the budget between them accordingly if one consistently outperforms.

Comparing to Industry Averages

Varos provides niche and platform-specific PPC benchmarks, enabling detailed performance comparisons. You can view typical metrics like CTR, CPC, CPA, and more based on your precise business category and the platform you advertise on (Google, Facebook, Instagram, etc.).

Major PPC platforms offer general benchmarks across industries. However, niche tools like Varos allow robust external benchmarking through industry-specific averages.

Varos benchmarks provide a 360-degree view of your performance by combining internal and external data. You can compare your real metrics side-by-side with relevant niche averages. These granular insights help you evaluate your PPC strategy and expose exactly where you can improve relative to top industry players.

The level of niche specificity Varos enables creates actionable clarity. You know precisely which optimizations to prioritize to propel performance forward in your unique market.

Optimizing Campaigns to Reach Benchmarks

Once you’ve identified areas needing improvement by analyzing benchmarks, there are several optimization strategies you can implement to help reach your PPC goals.

Enhancing Keyword Targeting

One of the foundations of successful PPC is using properly targeted keywords. Be sure to thoroughly research which keywords your competitors are bidding on by using keyword research tools. Select keywords that are highly relevant to both your ads and landing pages. 

Using long-tail versions of keywords can help you achieve greater specificity in matching searchers' intent. Implementing negative keywords helps avoid irrelevant traffic that lacks conversion potential.

Crafting Compelling Ad Copy

With PPC advertising, your ad copy needs to inspire searchers to click in those crucial few seconds of attention. Use powerful, action-oriented language and incorporate keywords naturally within concise sentences. Resist the urge to overstuff copy with keywords at the expense of readability and arrange ad text in scannable formats with the most important information first. 

It's always a good idea to test different versions of the copy through A/B split tests to determine which phrasing resonates most.

Optimizing Landing Pages

Your landing page is where conversions happen, so its alignment with your ads is a no-brainer. Be sure the page content matches the keywords and messaging of associated ads. Improve page load speeds, as faster pages correlate strongly with higher conversions. 

You should also use prominent calls-to-action and clear paths guiding visitors to convert. These strategies can significantly lift conversion rates and lower cost-per-acquisition.

Get Your Clearest PPC Picture

Leveraging PPC benchmarks with Varos gives you an accurate perspective on campaign effectiveness. You see precisely how you stack up against competitors and where wins can be achieved.

Take your PPC strategy to the next level by incorporating benchmarks for smarter optimization. Book a demo to reap the benefits today.