Using Google as a tool to keep your home services business running with a constant flow of leads is vital. You either have an in-house marketing team or outsource to a PPC vendor or marketing agency. Over the past several months, have you noticed the number of leads has dropped or become more expensive? If so, you’re not alone.

Conversion rate is a good metric for how well an ad campaign is performing. It’s the percentage of users who have completed the desired action. In the case of your ad campaign, they’ve clicked to the landing page and filled out the contact us form or called your business via click-to-call on their mobile device.

Google is one of the most effective paid media channels but is also one of the most competitive, so it’s important to monitor campaign performance and adjust as needed.

This is certainly a complicated time between the economic volatility and changing digital landscape due to privacy concerns. Search advertising remains one of the most effective forms of marketing for new customers.

As you are evaluating your campaign’s performance, here are industry benchmarks. This can be affected by seasonality as well as location.

  • Average Cost Per Click $6.11
  • Average Cost Per Lead $54.05
  • Average Click-Through Rate 4.62%
  • Average Conversion Rate 11.21%

Average cost per click (CPC) is a simple measure of how much you are paying each time a user clicks on your ad. Since this is set up as an auction, the competition level of a keyword can affect your CPC.

The typical cost per click for search ads is $6-$8 per click and is on the higher end compared to other industries. The CPC is driven up due to not surprising lower click-through rates. This is a competitive industry with higher marketing costs and longer decision cycles, but also a higher value placed on each individual conversion since these services tend to be more expensive.

If we compare the average cost per click to 2021, there is a 6% increase in cost. The first thing to improve on is the Quality Score. Make sure the ads match the content on the landing page. You may want to consider not sending traffic to your website’s homepage. |

Not all keywords have the same value. Some phrases have higher intent than others. For example, ‘window replacement companies near me’ has a buying intent which makes it more expensive than the phrase ‘how to install a new window’, which has an informational intent.

Click-through rate (CTR) is an indicator of how relevant your ads are to the viewer. This ratio between the ad clicks and how many people have seen the ad averages at 4% in 2021. However, the average CTR jumped 10% to 4.4%.

If your click-through rates are lower, try these tips.

  • Refine your keyword list
  • Are the targeted keywords relevant to your business?
  • Experiment with different ad copy

In 2021, the average conversion rate was 11.21% but that dropped 15.3%. That means fewer people are acting once they land on your website page. This metric ultimately affects the cost per lead (also known as cost per action or cost per acquisition). The home services industry has seen the cost per lead increase 13% in 2022 compared to 2021.

A high cost per lead can be the result of lots of clicks that aren’t ultimately converting. Prequalifying users with your ad copy and targeting more specific keywords are two ways to improve your PPC lead quality.

Looking at the data in aggregate, we see some clear patterns. Year over year, cost per click has remained relatively stable, while the click-through rate has increased. What might be leading to the increase in cost per lead across multiple industries?

Most businesses have increased their advertising budgets. Compared to 2020 and early 2021, most advertisers have increased their digital advertising budgets in the past year as the economy recovered from initial pandemic conditions. Higher budgets lead to higher costs per acquisition. This is a trade-off most businesses are willing to make for a higher number of leads to grow their business.

Google advertising continues to stay very competitive. That’s because it puts businesses in front of consumers when they have the highest intent to purchase. Did you know that 89% of consumers begin their buying with a search? With a high success rate, many businesses flocked to ads to keep their business running.

None of these trends change the fact that search advertising is one of the highest ROI paid marketing channels there is. PPC typically returns $2 for every $1 spent.

If you’re not totally satisfied with your search ad results, schedule an advertising review with one of our specialists.