Cost Per Acquisition, or “CPA,” is the aggregate cost that you incur when your ad converts – essentially when the goal of your ad is accomplished. The goals can, of course, be one of many types, depending on what your agenda was to set up an AdWords campaign in the first place – clicks to your website, an app install, a phone call (special mobile ads) and some more complex conversions.
CPA has always been known to be relative to a number of variables – the biggest ones (avoiding competitive and seasonal variables like bidding rates and holiday seasons) being the objective of the ad, the geography where the ad is being served, and the industry you belong to. Having said that, it has also been a perpetual quest of marketers to find CPA values for their respective industries which they can use as benchmarks to compare their results to.
WordStream has conducted an immensely helpful research towards benchmarking CPA metrics across twenty industries: Advocacy, Auto, B2B, Consumer Services, Dating & Personals, E-Commerce, Education, Employment Services, Finance & Insurance, Health & Medical, Home Goods, Industrial Services, Legal, Real Estate, Technology, and Travel & Hospitality.
I have looked into the data in detail and combined it with my own insights and numbers from other experts in the field to come up with a comprehensive report. Let’s dig in!
Click-Through Rates (CTR) benchmarks
Before we get to CPA, let’s first consider Click-Through Rates.
CTR is a very important KPI that fundamentally connects to your end CPA. This is where most of the optimisation efforts go. I have personally seen CTR rates around the 0.5% to 1% to around 2% to 5% even. How do you know if you are performing badly or your ads are hitting the perfect notes? Let’s look at the big picture.
The average CTR across all industries is only 1.91% for Search and 0.35% for Display. However, these numbers can be really misleading because they are averaged out across multiple industries and the data varies significantly.
For instance, 1.91% or even something around the 2.5% mark CTR on the search network, while amazing for most industries, is much lower than the average CTR in the dating category where the benchmark is 3.4% – the highest among all researched industries. On the display network, it is 0.52%. A distant second is the B2B industry where search CTR is 2.55% and display CTR is 0.22%.
Legal services and eCommerce suffer the most.
With all the restrictions placed by Google in the legal services category, marketers need to be really crafty with their ad copies. It has an average search CTR of 1.35% and eCommerce is at 1.66%.
It’s well known amongst most marketers that in general, search network performs better than display. The only exception to that is Technology, where the average Display ads CTR is 0.84%.
industries with the best search network CTRs:
- Dating and Personal – 3.40%
- Finance and Insurance – 2.65%
- B2B – 2.55%
- Consumer Services – 2.40%
- Technology – 2.38%
- Education – 2.20%
INDUSTRIES WITH THE worst SEARCH NETWORK CTRS:
- Law – 1.35%
- Industrial Services – 1.40%
- eCommerce – 1.66%
- Advocacy – 1.72%
If you are in the Employment Services, Consumer Services or Education business, you should rethink display network ads or keep a very close eye on the ads’ performances if you must run display ads. These industries, on average, are the worst perfoming in the display network.
THE WORST INDUSTRIES FOR display network:
- Employment Services – 0.14%
- Consumer Services – 0.20%
- B2B – 0.22%
- Education – 0.22%
- Real Estate – 0.24%
Cost Per Click (CPC) Benchmarks
When it comes to CPC, “Lawyer” and “Attorney” are among the 10 most expensive keywords. It’s no surprise that Law Services is the most expensive industry in terms of CPC – the average is £4.12, as much as 40% higher than the second most expensive industry, Employment Services, which is at £2.94.
When it comes to the display network, Employment Services suffer the most at £1.16 CPC. It is, of course, a corollary that most of the high CPC industries stem their high costs from the fact that they have the lowest CTR. The average cost per click in AdWords across all industries is £1.63 for search and £0.41 for display.
INDUSTRIES with the highest CPC on the search network:
- Legal Services – £4.12
- Employment Services – £2.94
- Consumer services – £2.64
- Finance and Insurance – £2.61
- Home Goods – £2.24
INDUSTRIES WITH THE lowest CPC ON THE SEARCH NETWORK:
- Dating and Personals – £0.13
- eCommerce – £0.62
- Automobile – £1.00
- Travel and Hospitality – £1.09
- B2B – £1.15
Cost Per Acquisition (CPA) benchmarks
Let’s take a look at the big numbers now.
All the above KPIs lead to the essential acquisition that you have been paying money for. No surprise here, dating has the lowest average CPA from the search network at £4.84 CPA, forming the lowest rim of the average £41.47 for search and £42.57 for display networks across all industries.
The averge is skewed due to the immensely high CPAs of Legal Services (£94.71), Medical Services (£88.49) and Employment Services (£73.99). On the display network, technology gets easy win – its CPAs are the lowest at £13.47.
Industries with the lowest CPA
- Dating and Personals – £4.84
- Advocay – £26.16
- Real Estate – £28.84
- Education – £29.53
- eCommerce – £32.30
(Image courtesy: WordStream)
Check out the full research on WordStream.