A few days ago, a friend of mine who runs a business online told me some good news: his conversion rate in Google Search network climbed to 1.7% from 0.8% last month. It sounds like incredible news if you don’t know the nitty-gritty.
Bur, is it really worth the enthusiasm?
In some aspects, yes. His business is doing good. But if we will look into a broader perspective, this statistic may be a nay.
Merely comparing your historical data regarding your business’s performance online with how it is doing today, like what my friend did, does not necessarily help you determine its success. In business, you are competing with yourself and others (a lot of them).
I’m not saying that conducting a comparative study using past data is unnecessary. However, you should go beyond that practice and examine your business performance and the others in the same industry. Doing both is still the best option.
So, I explained this to my friend. We decided to dig into a broader perspective and all. And alas, we found out that his business ads are not converting as well as he initially thought they did.
Now, maybe you’re like my friend too — spending a lot on Google advertisements only to realize that business performance is not up to par statistically.
Suppose you are already making meaningful comparisons of performance, then good for you. But if you wish to determine your account and investments on ad statuses accurately, I suggest you keep on reading as I elaborate on some crucial points you must know to propel your business forward
So, what is Conversion Rate (CVR)?
Average conversion rates or CVR reflect the number or proportion of online users that are persuaded by your business’ ads on Google in the way of purchasing or clicking your link. To put it simply, these are the people who were ‘converted’ after looking at your advertisements.
Five types of Google Ads are currently circulating Google affiliates. This article will tackle two prominent campaign ads: the Search Network and Display Network. These will be our basis for distinguishing your business’ performance in its respective industry.
Before that, let me provide you a foundation in understanding the CVR of varieties of industry.
In 2018, the Google Premier partner, WordStream, ran an extensive analysis involving 14,197 client accounts to seek figures about the cost per click (CPC), expense per action (CPA), click-through rate (CTR), and conversion rates by market. The objective was to demonstrate benchmarks on conversion rates for both Search Network and Display Network.
The cross-platform advertising solution company used the data of Google ads spending by the clients summing up to more than $200 million.
The analysis involved different markets/ industries: Advocacy, Auto, B2B, Consumer Services, Dating and Personals, E-commerce, Education, Employment Services, Finance, and Insurance, Health and Medical, HomeGoods, Industrial Services, Legal, Real Estate, Technology, and Travel and Hospitality.
Search Network Figures (CVR)
The average conversion rate of Search Network peaked at 3.17%, inching up a bit from the previous tally.
So, how does this benchmark can help you in knowing more about the business’ performance? You see, this data represents the companies’ collective performance in the same industry you are in. Basically, it is the standard standing point of how well a company’s ads convert.
Getting back to my friend’s case, the 1.7% he recorded is comparably below the average conversion rate. The good news is not that good after all; in fact, it is quite disturbing. Keeping in mind the Search Network’s CVR, his rate is merely almost half below the average of what most businesses in the same industry usually reap from Google Ads. Yikes!
As business owners or digital marketers, you should draw a line that sets objective metrics to recognize your entity’s performance. Aim for that average or, better, go beyond that.
Having such criteria in your company would significantly affect how you see financial results and decision-making.
Digital Network Figures (CVR)
In the same study, Digital Network ads’ average conversion rates also increased to 0.46%. Little the CVR may seem when put beside Digital Network’s, it has actually gained more than its previous tallies.
Digital Network is the right choice for a company that is looking forward to boosting their brand awareness. According to ComScore, advertisements under this campaign run reach 90% of online users. That is an excellent right footstep towards letting your presence be felt!
However, it is worth noting Digital Network Ads are not always behind the line. Some companies may have failed to leverage their sales through this platform, but that is just a fact in business, right? Others, on the one hand, reaped a fair amount of benefits from this campaign run.
How did they do it? Well, there are multiple ways to achieve that. But I think having a practical and creative display that can convert online users’ attention to sales is as good a place to start as any.
Meanwhile, the other points lie more on what the prospect sees — the industry you are participating in.
Top Converting Industries
As some existing industries remained on the top spot for having the highest conversation rates, others showed significant improvements over the years of market analysis. There are just those things that are hard to predict.
The highest CVR tallied in Search Network is found on Dating and Personals with 9.64% ranking higher than Finance and Insurance that only got 5.10%. The list is followed by the Legal industry, 6.98%, and Customer Solutions with 6.64%.
Meanwhile, in Digital Network, Dating and Personals surprisingly topped the game again, stamping a 3.34% conversion rate passing through e-commerce, technology, and even customer solutions. This is followed by Legal with 1.84% and Employment services garnering an average of 1.57%.
I presented you this data not to force you into joining or shifting to these top converting industries. It is your choice. If you are already in the mentioned markets, then good for you and keep it up. If your business belongs to the lowest converting ones: there is always room for improvement!
Being aware of the market statuses and benchmarks is an imperative tool a business should have. Identifying and comparing such data illustrating your company with the global standard could bring you more comprehensive insights. You’d know your strengths and weaknesses. It is essential to match the right amount of effort and consistency to convert that into useful means from this phase.