Published in the DMinsite Newsletter
Paid Search Benchmarks
If you’re a cataloger, you probably have a sense of the typical benchmarks for catalog response rates, return rates, average order size, etc. But most online marketers are in the dark when it comes to similar benchmarks for paid search programs.
Take this quick test:
* Do you know what you currently pay per click for your “brand” (site/company name) versus non-brand terms?
* How well do visitors who use paid search to return to your site convert? How does this conversion rate compare to all returning visitors?
* What is the bounce rate (percentage of visitors who exit after visiting only one page) of your paid search program versus all other traffic to your site?
Because we manage many of our client’s paid search we have access to some benchmarking data. Since there is no “average” site, use the statistics below as a guideline to help you identify potential areas of opportunities. As a point of clarification, one of the adgroups we create for our clients specifically targets their “brand” or company/site name. For example, Agri Supply has a “brand” ad group that contains over many variations or potential misspellings of their brand name. When I refer to “non-brand” campaigns below, I mean all other campaigns.
* The average CPC paid by our clients is $.29. While non-brand names are purchased for $.31, the CPC for brand names are only $.10. Some merchants don’t like to bid on their own names. However, since we see 50% of clicks on brand names coming from returning visitors, we strongly recommend that you bid on your brand name to remind your existing customers how to find you (and prevent a competitor from hijacking your customers!)
* Returning visitors from paid search ads convert at 8% on average, which is significantly greater than the 5.5% conversion rate of all returning visitors.
Bounce rate is a commonly missed (or misused) metric that can help you evaluate paid search keywords, ad copy and landing pages. Quite simply, this metric shows you the percentage of people who clicked through to a landing page on your site, but immediately left. It’s kind of like knowing who received your catalog in the mail, looked at the front cover, and immediately threw it away. Consumers who type in your brand names leave immediately only 14% of the time, while those who type in non-brand terms ”bounce” 25-30% of the time. Search terms, ads and/or landing pages with bounce rates of over 40% almost never pay off. Note: you can see your bounce rate for all three components of your paid search campaign in Google Analytics.
Here are a few quick tips to improve the performance of your paid search:
* Think of other ways your target audience spells your company’s name.
* Consider other product brands that you can legitimately bid on. Include these under a separate campaign to more effectively attract and promote.
* Search on your best and worst keyword ads on a consistent basis. Is the landing page consistent with the product promoted? Do you have search on the landing page for the relevant product or go to the site search box to find the product?
Please let me know about search trends or statistics you’d like me to review. I’d be more than happy to spend time diving into the numbers of the growing search market.
