Pay-per-click ads are taking over online advertising as Google continues dominating the global search market share while owning 92% of the search engine market. So many companies flock toward a paid marketing strategy because it offers excellent conversion rates for minimal work. Unlike SEO, which can take months to see results, pay-per-click statistics show that the average company sees $2 for every $1 spent on ads, offering a nearly instant 200% ROI.
Learning how pay-per-click ads perform on average can help you make intelligent business decisions for your marketing strategy. Continue reading to explore 65+ fascinating pay-per-click statistics surrounding average costs, success rates, effectiveness, types of ads, and more.
What Is the Average Pay-per-Click Cost in 2022?
The average cost of pay-per-click Google Ads is $1 to $2 per click. This equates to approximately $9,000 to $10,000 per month or $108,000 to $120,000 per year for the average small to medium-sized business. Microsoft Advertising (previously known as Bing Ads) costs approximately $1.54 per click.
The amount you spend on your PPC bid impacts its performance. Google Ads allows you to set maximum bids determining where your ad will appear. Your max bid and your ad’s quality score (a combination of the clickthrough rate, landing page quality, and keyword relevancy) will ultimately decide your ranking among other ads for the top spot during the ad auction.
Pay-per-click recommended-max-bid cost models vary based on factors like company size, industry, keyword strategy, budget, and goals. For example, if your ad costs $1 per click, you may set a budget of $10 per day, restricting your ads to 10 clicks per day. Additionally, different industries and keywords with larger competition levels must pay more for display, retargeting, and search ads.
Retargeting pay-per-click ads will allow you to target audiences that have already interacted with your content in the past. Remarketing ads typically cost less than standard pay-per-click ads, averaging $0.66 to $1.23 per click.
Source: WebFX
Average Cost-per-Click by Industry in 2022
The most competitive industries, like legal services, can pay as much as $40 per click, while others may only require a few cents for search advertising campaigns. Insurance, financial, and legal industries typically pay the most per click because many of the primary keywords experience high traffic volumes and extreme competition levels.
- Insurance and financial industries spend the most on pay-per-click ads per year, with a total of $1.2 billion spent.
- With Amazon’s strong e-commerce presence, retail companies spend a whopping $50 million total on pay-per-click campaigns.
- Arts and entertainment industries enjoy the cheapest PPC campaigns, averaging under $1 per click.
Sources: WordStream, WebFX
What Percentage of Clicks Do Pay-per-Click Ads Get?
According to pay-per-click statistics, the clickthrough rate for paid ads on the Google Search Console is between 4 and 6%. Most website traffic comes from organic search results, accounting for 94% of clicks.
The most common demographic of people to click through a paid ad is adults over 55 because they do not realize it is an advertisement. Ads succeed when they have catchy titles that generate interest with adequate marketing toward the right target audience. Approximately 80% of people only read listing headlines before deciding whether they’re interested.
The primary reasons people prefer organic listings over pay-per-click ads are as follows:
- They don’t want to receive future retargeting ads after clicking.
- They don’t trust the accuracy of online advertising. Approximately 25% of worldwide internet users used ad blockers in 2019.
- The ad isn’t relevant to what they need.
- They’re searching for a specific brand or product.
- They fear they may get a virus if they click.
While these reasons may sound unavoidable, you don’t need to give up hope. Only 28% of people think organic ads are more reputable than advertised listings, meaning that properly crafted PPCs can still generate trust. With proper audience targeting, successful language usage, and an appropriate campaign, you can see decent PPC results.
Sources: WordStream, Protofuse, Ranktracker, Smart Insights, Statista
How Many Customers Click on Pay-per-Click Ads?
65% of customers ready to make a purchase click on pay-per-click ads. Shoppers with a high purchase intent are more likely to click through Google Ads over the visitors simply browsing for information, especially if your ad displays critical product information, details, and images. The customers that click on pay-per-click ads are also more likely to convert:
- PPC ads have 50% better conversion rates than organic tactics.
- 97% of internet consumers use search tools to find local services and businesses.
- 69% of smart device owners use them to shop online and potentially click through ads.
- Of all consumers that click on PPC ads, 52% immediately call the business after visiting the website.
- 98% of all consumers worldwide shop online.
Pay-per-click ads can have impressive clickthrough and conversion rates when done well. If you can target your ad to high-purchase intent buyers seeking your exact product, you may see more success with your paid ad.
You can view the average search intent for different keywords by using keyword research tools. For PPC ads, you should seek keywords with high transactional or commercial intents on the search engine results page (SERP) rather than informational or navigational. For example, adjusting your keywords from “What does protein powder do?” to “Buy protein powder” can help you reach people ready to purchase your product.
Sources: WorldLead, Brightlocal, Uberall, CleverClicks, Google
How Many Ad Clicks Are from Mobile Devices?
According to pay-per-click statistics, 61.9% of all Google Ads clicks consist of mobile device users. Most people aren’t shocked by the Google mobile advertising statistics, considering how widespread smartphone devices have become.
60% of mobile search users contact the business directly after conducting their search. Features like “click-to-call” with direct and convenient CTAs (calls-to-action) make conversions a no-brainer for the consumer, allowing businesses to enjoy larger clickthrough and contact rates.
Smartphones account for most mobile device clicks, while tablets only account for 3%. Because of the high mobile conversion rates, businesses must optimise their websites for mobile compatibility:
- 51% of shoppers claim they’re more likely to purchase from brands that offer mobile apps with rewards programs, though 50% prefer to stay on the mobile browser site rather than downloading an app.
- 58% of mobile shoppers prefer websites that remember their information. For example, an e-commerce site may save the items in your cart, your checkout information, and your log-in details for future purchases.
- 63% of shoppers using their mobile devices prefer websites and search engines that offer product recommendations based on their interests.
Sources: Google, Social Shephard, Statista
Pay-per-Click Ads and Increasing Brand Awareness
Brand awareness is a key marketing component that impacts your website’s rank ability, consumer trust, target audience familiarity, and more. PPC ads can increase brand awareness by up to 80% by placing your website high on the search engine results page (SERP).
To discover this information, Google performed 61 studies across 12 industry verticals, ranging from auto businesses to retailers. For each study, 800 participants searched for specific keywords and landed on a SERP with either organic results (control group) or test results with an ad for the specific brand placed near the top. After the participants viewed the results page, the study asked which brand came to mind first after hearing their target keyword:
- On average, 14.8% of participants in the test group said the ad brand’s name.
- Only 8.2% of participants in the control group said the same brand’s name.
- The study concluded with a 6.6 percentage point increase, displaying an 80% increase in brand awareness across all results.
Source: Google
How Effective Are Pay-per-Click Ads?
One in every five marketing experts claims that pay-per-click advertising is the most effective marketing strategy because it provides the best return on investment (ROI). According to pay-per-click statistics, PPC ads provide a 200% ROI, equating to $2 for every $1 spent. Because of their effectiveness and rising popularity, more and more businesses are investing in PPC ads, with experts predicting that advertisers will spend $260 billion on this tactic in the coming year.
Paid search marketing ads are ranked fourth among the top digital advertising strategies, according to industry professionals. SEO, content marketing, and email automation strategies receive slightly more votes for the highest ROI than PPC campaigns.
While SEO and content marketing may perform marginally better long term, it’s important to note that most businesses cannot enjoy any returns on their investments for at least a few months with SEO. With PPC ads, you can see instant revenue flowing in, leaving long-term SEO ROI until website traffic increases.
Sources: Statista, Statista [2]
How Effective Are Retargeting Campaigns?
Retargeting ads can increase sales by 20% and conversions by 26% while reducing cart abandonment rates by 6.5%. While retargeting can vary from industry to industry, professionals across seven different verticals concluded that retargeting is 10 times more effective than other ad placements, like display ads.
The importance of retargeting ads revolves around the consumer’s interests. Retargeting ads only display the PPC campaign to users who have already interacted with your website or content in the past, displaying potential interest in your products. Because of prior interactions, this target audience already knows and trusts your brand, has thought about your product, and has a much higher likelihood of converting.
- 65% of online shoppers notice ads for products they’ve already seen before.
- Conversion likelihood increases by 70% with retargeting ads.
- 97% of shoppers never return to a website after visiting it the first time, though remarketing can improve this.
- 25% of shoppers enjoy retargeting reminders, and 30% feel generally positive toward them.
- Retargeting campaigns can boost ad performance by up to 400%.
- Retargeted customers cost an eighth to acquire when compared to other tactics.
- Retargeting can boost website engagement rates by 16% and brand awareness by 12%.
Most Effective Ads Platform Based on Return on Ad Spend
The most effective ads platform based on Return on Ad Spend (ROAS) is Google Ads, with an average of 13.76. The following digital advertising platforms rank just below Google:
- Facebook Ads average ROAS: 10.68
- Instagram Ads average ROAS: 8.83
- Amazon Ads average ROAS: 7.95
- Twitter Ads average ROAS: 2.7
- Pinterest Ads average ROAS: 2.7
- TikTok Ads average ROAS: 2.5
You can calculate ROAS by finding your conversion revenue, then dividing that figure by your total ad spend. So, if you spend $200 on your ads and generate $1,000, your average ROAS would be 5. Essentially, you make $5 for every $1 invested in ads.
An average e-commerce ROAS is around 2.87, equalling a 287% return on investment. Certain industries, like baby products, typically enjoy larger average returns, while others, like beauty products, fall below the average. Many industries view ROAS between three to four as good, making Amazon, Instagram, Facebook, and Google pay-per-click statistics excellent.
According to a recent survey with 1,440 marketers, 87% prefer Google and Facebook, with Instagram as a close third.
Sources: Amazon, Amazon [2], Sellerapp
How Much Do Businesses Invest in Pay-per-Click Ads Monthly?
The average small to medium-sized business spends approximately $9,000 to $10,000 per month on pay-per-click ads, averaging $1 to $2 per click. These brands invest around $108,000 to $120,000 per year on PPC campaigns.
A large determining factor in ad spending is company size. The average PPC investment budgets for small-to-large businesses are as follows:
Size | Average PPC cost per month |
Startups | $300 to $1,000 |
Small businesses | $1,000 to $2,000 |
Mid-sized businesses | $7,500 to $10,000 |
Large businesses | $10,000 to $50,000 |
Company size directly impacts ad spending because of marketing budget allocations. Most businesses typically use 7 to 10% of revenue for marketing efforts. Therefore, large organisations with higher revenue streams can spend more on monthly ad campaigns. The type of ad you create, your target keywords, your content’s quality, and your company’s size and industry will all impact how you fall within the above cost averages.
Most Common Types of Pay-per-Click Ads
Paid search ads are the most common type of pay-per-click ad, with 93% of surveyed brands using them. Many advertisers start with search ads, allowing you to select target keywords that will display your ad when users search.
The most effective ads for brands include the following:
- Paid search ads: Paid search ads account for 93% of PPC campaigns, according to surveyed brands, with a 65% effectiveness rating. Google and other search platforms place search ads on the SERP based on an auction system that considers your max bid, keyword relevancy, ad quality, and more.
- Display ads: 79% of surveyed brands use display ads. Display advertising shows your ad to users while they browse various internet sites, typically resulting in lower conversion rates but higher brand awareness.
- Remarketing ads: 82% of marketers in the survey use remarketing ads. Remarketing displays ads to users who’ve previously interacted with your content. This tactic can increase your sales by up to 20% and conversions by up to 26% making it popular among many brands.
- Video ads: 85% of marketers use video in their marketing techniques and 92% advocate for its effectiveness. YouTube is one of the most popular platforms for video advertising, allowing you to publish paid or organic videos.
- Shopping ads: Shopping ads look like search ads but show a product picture with more detailed purchase information, like the price. 33% of surveyed marketers use shopping ads.
- Social media ads: Social media advertising is the second most popular campaign method, with 83% of surveyed marketers using it. With social media ads, you can display advertisements to your target audience while they browse their favourite apps, like Twitter, Facebook, Instagram, TikTok, and more.
- Gmail sponsored ads: Gmail ads let you advertise on Google, which you can combine with other Google advertising methods.
- Amazon ads: 206 million people shop on Amazon daily, making it an excellent place for advertising products. You can create sponsored product ads, headline search ads, and product display ads with Amazon.
Sources: Hanapin Marketing, MotoCMS, Wyzowl, Statista
How Much More Likely Are Pay-per-Click Visitors To Buy Than Organic Visitors?
According to marketing statistics from Unbounce, users visiting your website through a PPC campaign are 50% more likely to purchase than organic website visitors. Users clicking on PPC ads have high purchase intentions, know what they need, and want to buy what you sell.
Source: Unbounce
What Is a Good Pay-per-Click Rate?
Average cost-per-click rates (CPRs) vary on many factors, though most businesses should shoot for a 20% (or 5:1 ratio) cost-per-acquisition. Brands must consider their target ROIs when finding goal CPRs. You can find the CPR by dividing your total costs by total clicks.
Source: WebStrategies
Conclusion
PPC advertising can offer instant, dependable results with an average 200% ROI equalling $2 returns on every $1 spent. Of all the pay-per-click statistics covered above, the most shocking may be how effective retargeting campaigns can be, offering 400% performance boosts and 70% conversion likelihood increases. Before strategising your next campaign, review our statistics and consider integrating a retargeting ad into your plan.
