WordStream is a tool that we commonly use to progressively optimize Google Adwords accounts. They’ve recently written a detailed blog post on Adwords Click Through Rates (CTRs) by industry. We are going to talk a bit about the averages in Technology and what they mean in practice.
A dirty little secret of Adwords is that it’s highly optimized for Google to make money. A lot of it. I’m sure that comes as a surprise to most of you. 🙂 The challenge that presents for most early stage companies is that it requires ongoing attention and management to both initiate and maintain your results. Google is constantly shifting the goalposts, Adwords is a live auction, and your competitors are competing against you for the same results. Unfortunately, we’ve seen accounts where $250,000 in annual revenue simply went away, while Google diligently continued to spend the prospects PPC budget month over month. Google leaves responsibility for your results to you.
To get an idea of where you stand, Wordstream found that the average Click Through Rate in Technology is 2.38% for Search and .84% for Display Network ads.
The problem with having an average CTR is the average isn’t particularly good. We commonly see CTRs of 5-10% on more effectively performing campaigns.
Another thing we commonly find in prospect accounts is that Conversion Tracking has not been implemented or maintained over time. Without tracking the conversion effectiveness of your landing pages, you don’t end up with an ability to accurately forecast where your leads are coming from or what they are costing you. Bummer! Wordstream was good enough to provide us with some averages for you to keep in mind. They found that Technology firms have an average Cost Per Action (CPA) of $69.80 on Search and $19.23 on the Display Network. For most B2B companies, the CPA = CPL or Cost Per Lead. We commonly target a CPL of $50 or less with our B2B clients and do see costs progress downwards over time as campaigns are progressively optimized.
The problem with CTR is that it doesn’t represent the end goal. You need to know which of your clicks are converting to leads and which of your leads are converting to pipeline. In our experience, PPC is a great source of impressions broadly across the Internet, but it frequently isn’t going to be a strong source of pipeline for enterprise-focused companies without active management and progressive optimization over time.
