PPC Industry Benchmarks from 50k Campaigns

Since August, we’ve partnered with other marketing professionals to present our Master Your Marketing Webinar Series. Once a month, we bring you digital marketing experts to share actionable advice, illuminating case studies, tips, and tricks to help you develop insight and skills around different aspects of marketing.

Last month, we had the pleasure of hearing from Beth Thouin and Tamas Frajka from Acquisio. Acquisio is an online acquisition platform for AdWords, Facebook Ads, and Bing Ads that makes 2.5 million campaign adjustments per day for 400+ clients, running over 300k campaigns. Basically, they really know their stuff when it comes to PPC.

Read on for a recap of their presentation in which they reveal benchmarks and insights from over 50,000 PPC campaigns.

Acquisio’s Amazing Data Set

For Acquisio’s Industry Benchmark Report they pulled data from over 50,000 campaigns in three countries. The data comes from campaigns in Q3 2017 with a total ad spend of $124,285,412 (CAD) across twelve verticals including retail, travel, law, real estate, financial services and more. The report is designed to give advertisers medians and benchmarks for their own ad spend, giving perspective to where they fall in the marketplace and providing valuable business intelligence.

The report relies heavily on medians as opposed to averages, as medians are less susceptible to the impact of outliers. Meaning, medians are less affected by a single campaign performing radically better or radically worse than similar campaigns.

Why is it important to understand benchmarks for your industry?

Strategic planning for advertising can be difficult for small-to-medium sized companies. Often, there aren’t large sets of past data to construct a strong strategy nor extra cash to test the market or different elements of campaigns.

Industry benchmarks give companies a snapshot of their market, a better understanding of their place in the market, and much better insight to questions like, “Should we pay $1.50 or $4.50 per click on our ads?”

Let’s Look At Some Data

In the data set above, we see median cost-per-click by vertical. In this case, the median means that at least half of marketers are paying this price for cost-per-click, making this chart an extremely valuable calibration tool.

If you’re in financial services and are paying $7 or $8 per click then you know it’s time to take a step back to evaluate your campaign and search for places to add efficiency. Conversely, if you’re paying $3.50 or $4 per click you know that your campaign is outperforming the majority of your peers and you should be drawing lessons from that.

Cost-per-acquisition is another extremely valuable benchmark for all businesses. This data shows what at least half of marketers are paying per acquisition and is a very strong guide for which products or services are worth advertising.

Looking at retail, if $41.47 cuts drastically into the profit margin of a product than you shouldn’t be advertising for it. For retail, products under $100 will have a very hard time remaining profitable with PPC. Conversely, medical and dental campaigns offer a great CPA considering the clients are often worth thousands of dollars, easily offsetting the $66.79 spent on lead acquisition.

How does Machine Learning help?

Acquisio uses sophisticated machine learning to improve the performance of PPC campaigns on a mass scale. Using 30+ predictive algorithms which analyze and react in real-time, Acquisio is able to add efficiencies around bid management, budget pacing, budget distribution, and cross-publisher distribution. In short, Acquisio is at the cutting edge of a new chapter in digital marketing and advertising as things like low budgets, lack of optimization expertise, limited data and time are no longer a problem. Acquisio’s two best performing verticals are financial services and automotive where their machine learning has been able to improve conversion rates by over 200%.

Key Takeaways

The lowest CPC industries are Food + Beverage and Retailers.
The highest CPC industries are Legal and Financial.
Interestingly, Contractors and Professional Services see the best conversion rates.
Your situation is unique and you may experience different benchmarks. It’s important to investigate if you are too far off. Measure, test, iterate your campaigns.