#Search ad costs rise, conversion rates decline again in 2024
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Search ad benchmark report finds advertisers are paying more for leads and clicks, while Google continues to report record profits.
Feeling déjà vu? I sure was after reading LocalIQ’s annual search advertising benchmarks report, which was released today. It’s basically more of the same story as 2023.
The 2024 edition once again features data on the average conversion rate, cost per lead (CPL), click-through rate (CTR) and cost per click (CPC).
Why we care. Advertisers are paying more for leads and clicks, while Alphabet, Google’s parent company, keeps reporting record profits. While LocalIQ said this is due to “increased competition and intensified monetization of the Google SERPs,” it’s hard not to wonder what “levers” Google potentially may be “tuning” behind the scenes as Google keeps finding ways to justify higher prices despite not delivering equally greater returns for bigger investments from advertisers.
Conversion rate: 6.96%. Conversion rates increased in 12 out of 23 industries examined by LocalIQ.
- Industries with big decreases were Finance & Insurance (down 32.40%) and Dentists & Dental Services (down 19.57%). Industries with significant increases were Apparel / Fashion & Jewelry (up 112.01%) and Career & Employment (up 80.97%).
- The average conversion rate was 7.04% in 2023 and 7.85% in 2022.
CPL: $66.69. CPL increased by 25%, on average, in 19 of 23 industries. However, this is a slightly lower year-on-year increase than last year (27%).
- The average CPL was $53.52 in 2023 and $44.70 in 2022.
CTR: 6.42%. CTR increased by 5%, on average, for 70% of industries.
- The average CTR was 6.11% in 2023 and 5.91% in 2022.
CPC: $4.66. CPC increased by 10%, on average, in 86% of industries.
- The Real Estate, Sports & Recreation, and Personal Services industries saw increases of over 25% year-over-year.
- CPCs increased for 60% of industries, but only by 2%, on average.
- The average CPC was $4.22 in 2023 and $4.01 in 2022.
2024 search advertising benchmarks. Here’s the data, broken down by category (Note: a higher resolution image is coming):
The report. Search Advertising Benchmarks.
Danny Goodwin has been Managing Editor of Search Engine Land & Search Marketing Expo – SMX since 2022. He joined Search Engine Land in 2022 as Senior Editor. In addition to reporting on the latest search marketing news, he manages Search Engine Land’s SME (Subject Matter Expert) program. He also helps program U.S. SMX events.
Goodwin has been editing and writing about the latest developments and trends in search and digital marketing since 2007. He previously was Executive Editor of Search Engine Journal (from 2017 to 2022), managing editor of Momentology (from 2014-2016) and editor of Search Engine Watch (from 2007 to 2014). He has spoken at many major search conferences and virtual events, and has been sourced for his expertise by a wide range of publications and podcasts.
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