PPC advertising is one of the most effective ways to promote your brand and drive immediate business results by reaching targeted, high-intent audiences. Google Ads has long dominated PPC and it’s no surprise that there are no signs of it slowing down despite an increase in competition from retail media platforms like Amazon and more recently, social media platforms like Instagram and TikTok. Let’s dive into how PPC advertising is defined and each major player, what to expect for PPC cost metrics, and how to effectively measure your investment.
What is Pay-Per-Click Advertising
PPC, or pay-per-click advertising, is an online marketing model where advertisers pay a fee each time their ad is clicked. It’s a way to buy visits to your site, rather than earning those visits organically. PPC advertising relies on an auction system to determine the placement of ads. In its most simplistic form, here is how it works:
- Ad Placement: Advertisers create ads and choose keywords, phrases, or interests and behaviors related to their products or services. These keywords and audience attributes trigger the display of their ads in search engine results or on relevant websites.
- Bidding: Advertisers bid on the keywords or audiences they want to target. This bidding determines how often their ads will be shown and their position relative to other ads. Higher bids can increase the likelihood of appearing in top positions.
- Cost: The advertiser only pays when someone clicks on their ad, not when the ad is displayed. Pay-per-click metrics can vary based on competition for the keyword or audience and the quality of the ad.
- Targeting: PPC allows for targeted advertising, meaning ads can be shown to specific audiences based on factors like location, device, time of day, interests, behaviors, and more. This helps advertisers reach their ideal customers more effectively.
- Ad Format: In addition to search ads, PPC formats span text, display, video, and shopping ads. While search ads usually drive the most efficient performance, having a well-rounded mix of assets is recommended to support a full-funnel strategy.
PPC campaigns can be leveraged to increase brand awareness, drive traffic to a site, and generate sales.
PPC Advertising Statistics to Know
Often referred to as the Triopoly, Google, Meta, and Amazon represent 60% of digital ad spending while the duopoly of Google and Meta contributes to 47% of that total, according to eMarketer. These platforms usually receive the most investment and drive the most efficient PPC cost metrics and pay-per-click rates. When determining where to invest, consider not only historical benchmarks but also how your target audiences are consuming media and where they go online to discover brands and products.
Google Usage & Ads Statistics
Google Ads have the potential to reach most online daily users when you tap into their suite of ad inventory across search, shopping, display, and video.
In terms of prioritization, Google Ads on search will produce your most efficient results as the user intent is strongest. Advertisers can easily buy all inventory within a single interface to optimize their media mix in real-time.
As you plan your campaigns, here are some powerful statistics to consider:
- Google Sites received 278 million unique monthly visitors in the United States in May 2024 Statista
- In 2023, Google accounted for 91.54% of the Global Search Engine Market, with its closest traditional competitor, Microsoft Ads, at only 3.19%. The United States market leads in usage. SEMRush 2024
- 63% of Google searches occur on mobile in the United States SEMRush 2024
- In its Q2 2024 earnings release, Google Search revenue is up 13.8% YoY. eMarketer 2024
- Google’s share of search ad revenues will dwindle to 50% this year, down from about 55% two years earlier. Retail media search will capture the majority of new search ad dollars over the next few years. eMarketer 2024United States Adults spent 48.7 minutes per day on YouTube in 2023, just behind the leading social media platform, Facebook. eMarketer
- Google Display ads have a massive scale, with 80% of online users seeing a Display Network ad daily. WebFX
- Google estimates that for every $1 an advertiser spends on Google Ads, they get $8 in profit through search and ads. Google
- Google Ads metrics in 2024 reveal an average cost per click of $4.66, a click-through rate of 6.42%, and a conversion rate of 6.96% across all industries. Wordstream
- On average, advertisers pay a $2.69 cost per click for Search Ads while CTR is 3.17% and e-commerce conversion rate is 2.81%. Store Growers
- The average YouTube cost per click is $0.49, the view rate is 31.9% and CTR is 0.65%. The average conversion rate for ecommerce is between 0.05% – 0.5%. StoreGrowers
- The cost per click for Display Ads is $0.63 on average while CTR is 0.46%, and the conversion rate is around 0.59%. Store Growers
Amazon Usage & Ads Statistics
Amazon advertising is a must-have if you are selling shippable products, and businesses of any size are welcome. It offers you the ability to engage with audiences while they are in the mindset of browsing, discovering, or purchasing. With its extensive reach, it has collected vast amounts of valuable first-party shopper data that you can take advantage of. Here are some other enticing statistics to consider as you plan your paid media:
- Amazon has 38% market share while the next closest rival, Walmart, holds 6% market share. Statista
- Amazon has 236 million unique monthly visitors in the United States as of May 2024 Statista
- Amazon Prime memberships are forecasted to reach 180 million in 2024. Statista
- 2024 broke Prime Day sales records, though Amazon has yet to announce by how much. Last year, Prime Day delivered 12.9 billion in sales globally. Amazon | Statista
- Amazon’s advertising revenue grew to almost 13 billion in Q2, representing a 20% YoY increase. CNBC
- As of Q2 2023, 57% of United States consumers are starting their online shopping searches on Amazon versus 42% who are starting on a search engine. eMarketer 2023
- Sponsored Products ads are achieving an average cost per click of $1.36, a click-through rate of 0.32%, and a conversion rate of 22%. Pacvue
- Sponsored Brands ads have an average. cost per click of $1.76, a click-through rate of 0.47%, and a conversion rate of 19%. Pacvue
Meta Usage & Ads Statistics
PPC buying on Meta can be unlocked by choosing a link-click optimization goal. This means Meta will aim to deliver your ads to users who are more likely to click to a destination such as your website, app, Facebook event, and Instagram profile. Meta’s ad platform allows you to buy ads seamlessly across its properties.
- As of May 2024, Facebook has 178 million users in 2024 in the United States, reaching 52% of the population while Instagram has 143 million users. eMarketer
- In 2023, United States adults spent over an hour each day across Meta platforms, averaging 30.9 minutes on Facebook and 33.1 minutes on Instagram. eMarketer
- The majority of Facebook users (81.8%) access the platform exclusively through mobile devices, making it one of the most downloaded apps. Statista
- In Q2 2024, Meta ad revenue reached $16.8 million in the United States and Canada, a 17% YoY. Meta
- Facebook Lead Generation campaigns achieve an average cost per click of $1.88, a click-through rate of 2.53%, and a conversation rate of 8.78% across all industries. Wordstream
- Traffic campaigns on Facebook have an average cost per click of $0.77 and a 1.57% click-through rate.
- On Instagram, advertisers can expect a cost per click between $0.50 – $0.95. Wordstream
Key Metrics for Evaluating Success
Understanding the key metrics in Google Ads and PPC campaigns will be crucial to success. Focusing on these metrics will help you gauge the effectiveness of your PPC campaigns, make data-driven decisions, and ultimately achieve better results from your advertising efforts. Here are some of the most important metrics you should focus on:
- Cost Per Click (CPC)
- Definition: Arguably the most important of the PPC marketing metrics, CPC represents the amount you pay each time someone clicks on your ad. In most PPC systems, advertisers set a maximum CPC bid, which is the highest amount they are willing to pay for a click on their ad. However, the actual CPC can be lower than the maximum bid, depending on the competition and ad quality.
- Why It Matters: Understanding CPC helps in budgeting and assessing the cost-effectiveness of your campaigns and keywords. A lower CPC means you’re getting more clicks for your budget, which can improve the return on investment of your advertising spend (ROAS).
- Impressions
- Definition: The number of times your ad is shown to users.
- Why It Matters: Impressions help gauge the visibility of your ads and can be used to understand the reach of your campaigns.
- Click-Through Rate (CTR)
- Definition: The percentage of users who click on your ad after seeing it.
- Why It Matters: A higher CTR indicates that your ad content is relevant and compelling to your audience and they want to find out more. It can also impact your Quality Score.
- Quality Score
- Definition: Metric determined by the relevance of your keywords, ad copy, and landing page.
- Why It Matters: A higher Quality Score can lead to lower CPCs and better ad placement.
- Search Impression Share
- Definition: The percentage of impressions your ads received compared to the total number of impressions they were eligible to receive.
- Why It Matters: Impression share indicates how well your ads are competing in the auction and if there’s potential for increased visibility.
- Ad Position
- Definition: The average position of your ad on the search results page.
- Why It Matters: Higher ad positions improve your visibility and result in higher CTRs.
- Bounce Rate
- Definition: The percentage of visitors who leave your site after viewing only one page.
- Why It Matters: A high bounce rate may indicate that your landing page isn’t engaging or relevant to users.
- Conversion Rate (CVR)
- Definition: The percentage of clicks that result in a conversion (e.g., a sign-up, download, or purchase).
- Why It Matters: CVR helps measure how effective your landing page is at getting users to convert, providing insight into the overall user experience.
- Cost Per Acquisition (CPA)
- Definition: The cost associated with acquiring a new customer or lead.
- Why It Matters: This metric helps evaluate the efficiency of your ad spend and assists in gauging the profitability of your ads.
- Return on Ad Spend (ROAS)
- Definition: The revenue generated for every dollar spent on advertising.
- Why It Matters: It provides insight into how well your advertising investments are performing in terms of generating sales or other desired actions. ROAS also guides decision-making in terms of which strategies will maximize profitability. A ROAS greater than 1 indicates a positive return, with revenue exceeding the cost of the ads.
Conclusion
PPC can be an effective way to drive visibility and generate traffic and conversions, but it requires ongoing management to optimize keyword and ad performance, adjust bids, and ensure a good return on investment.
Discover how we can help you implement a cost-effective PPC strategy by visiting our PPC Management Services page today.
For more information on our full-service capabilities, visit our Paid Media Services page, and see how we provide a 360 turn-key integrated approach to building campaigns that perform.
Written By: Kiki Frizol, Director of Paid Media
