on March 9, 2023 (last modified on March 8, 2023) • 19 minute read
When you join a conversation about Google Ads’ efficacy, you’ll often see people fall into one of two camps. One side calls it the must-have advertising platform. The other just doesn’t get the same results — instead, they find it expensive and unsustainable to use.
But, both groups have access to the same features. Our benchmark data shows that it has reasonable cost-per-click and cost-per-conversion rates for an ad platform. So, the defining factors for Google Ads’ effectiveness seem to relate to the user.
What makes Google Ads a magic bullet for some marketers and a less effective tool for others? Let’s investigate what types of companies, campaigns, and products succeed best with Google Ads and why.
We consulted 96 Google Ads users about their experiences to better understand who gets the best use out of it. Here’s the breakdown of their industries:
Everyone who participated in our survey uses Google Ads or used it in the past. Among these respondents, 87.50% currently use Google Ads, while 12.50% don’t use it now, but used it in the past.
Most of the marketers we surveyed use other paid ad platforms in addition to Google Ads. They mainly go to social media. More than 80% use Facebook Ads, almost 50% use Instagram Ads, and about 44% use LinkedIn ads.
As you read the results from our benchmarks and survey, keep it in the back of your mind that many marketers don’t use just Google Ads. Even if it’s the main driver of their advertising results, other channels still contribute to their performance.
One of the most obvious factors to investigate in Google Ads performance for different users is industry. Does it make a difference if you advertise for a B2B or B2C company? Our Google Ads benchmark data can give us a clue.
Before we dive into each industry group’s typical performance, let’s look at our Google Ads Benchmarks for All Companies data for February 2023 to get a baseline. We decided to highlight some of the most important metrics for Google Ads — cost per click, cost per conversion, and overall cost.
Looking at data from 1,576 contributors, the median cost per click for all companies was $1.17.
Among 1,222 participants, Google Ads had a median cost per conversion of $45.16.
2,453 benchmark members paid a median cost of $1,958.06.
To see where you stand, join our Google Ads Benchmarks for All Companies for free today.
Now, how do these numbers compare for B2B and B2C businesses?
The January 2023 data from our Google Ads Benchmarks for B2B Companies shows that B2B companies spend more on clicks and conversions than their B2C counterparts and the average business.
According to data from 735 participants, B2B companies pay a median of $1.43 per click ($0.34 more than the All Companies median).
Google Ads data from 577 B2B contributors shows they pay a median of $50.44 per conversion ($9.05 more than the median for All Companies.)
B2B businesses also pay a slightly higher monthly cost than businesses in general. Data from 1074 participants shows they pay a median of $2,136.39 per month ($178.33 higher than the All Companies median.)
If you are a B2B business, join Google Ads Benchmarks for B2B Companies for free and compare metrics such as impressions, clicks, average CPC, CTR, conversion rate, conversion value, cost/conversion, and more.
According to the data from our Google Ads Benchmarks for B2C Companies benchmark group, B2C companies paid less per click and conversion than B2B companies and the average business. Yet, they didn’t pay much more overall cost per month than B2B companies, indicating they received better results from the same ad spend.
The 498 B2C companies that opted into CPC benchmarks spend a median of $0.87 per click ($0.22 less than the All Companies median).
Data from 406 contributors shows that the B2C group pays a median of $37.67 per conversion ($3.72 less than the All Companies median).
Examining data from 774 contributors, B2C businesses paid a median cost of $2,209.58 ($251.52 more than the All Companies median). This median is only $73.19 more than the B2B cost median.
To compare your performance against other B2C companies, join this benchmark group for free.
Viewing benchmark data can be enlightening, but seeing where your company’s efforts rank against those benchmarks can be game-changing.
Browse Databox’s open Benchmark Groups and join ones relevant to your business to get free and instant performance benchmarks.
Of course, Google Ads performance goes beyond raw numbers and industry. We asked survey participants about Google Ads’ effectiveness for their businesses. Most respondents — 77% — consider it very effective, while 22% think it’s somewhat effective. Just 1% reported Google Ads not being very effective for their business.
In addition, we asked respondents to share their experiences with using Google Ads versus other platforms.
Looking at their open-ended answers, Google Ads is more effective for generating leads rather than brand awareness, and it may have a slight advantage for B2C businesses. As you test Google Ads for your business, watch lead metrics like conversions versus brand awareness metrics like clicks, followers, or newsletter subscribers.
We’ll explore responses by the level of effectiveness reported in the open-ended answer (which may not reflect the respondent’s answer to the closed-ended question about effectiveness.)
Businesses that found Google Ads very effective valued the platform for its ability to bring in high-quality leads. Since they show ads at the top of search results, people with a certain goal in mind respond to them best. Some of these respondents use Google Ads as part of a greater search strategy that involves organic tactics.
Eyeglasses.com’s Mark Agnew is one such person who gets results from using Google Ads as part of a holistic search strategy: “I have seen better results come through from Google Ads when compared to other ad options we’ve pursued. Overall, the results have been quite good and continue to bring consistent results, actually. I think Google has a more effective algorithm and brings more people to our ad with a higher click-through rate once those people have found us. For a specific product site like ours, Google has been extremely effective in both ways, organic and paid. Another added benefit to using Google Ads is the double coverage you might receive if you have a strong organic SEO strategy. For my company, I appear twice on the front page for specific keywords. One is the Google Ad and the other is from my organic SEO work that has helped my website appear very high in the rankings for certain keywords. With both strategies working for me, Google is a powerful engine for my business.”
Related Reading: What Percentage of Organic Search Should Be Converting into Leads? | Databox Blog
Jeff Moriarty of Moriarty’s Gem Art gets good performance from Google Ads’s shopping ads for his ecommerce store.
“Google Ads are our second highest source of revenue behind organic search. While it is the platform we spend the most of our budget on, the revenue it equates to more than pays for it. We use text ads, display ads, and shopping ads for our company. Google Shopping is the majority of spend and sales though. This year already, 20% of our sales have come through Google Ads.”
Head of Marketing at Moriarty’s Gem Art
Warner Quiroga from Prestige Homebuyers finds Google Ads best for lead generation. “This is because people searching for homes on Google generally have a higher intent than people who are browsing social media on their phones. As a realtor, I was able to get more leads from search results (where my ads were being shown) than from Facebook and Instagram,” Quiroga explains. Quiroga also appreciates the cost-effectiveness of its pay-per-click (PPC) model, ease of use, and location-based targeting.
ParamountQuote’s Tim Connon also gets high-value leads from Google Ads and chalks it up to its ad positioning. Connon says, “Google Ads result in much higher-intent leads for our representatives to speak with. They appear at the top of the search engine for the specific keyword that consumers are searching for. This results in a high-intent lead being generated that wants the product. Comparing this to Facebook Ads, for example, the lead gets an ad on their feed that they were never searching [for. Compared] to Google, this means you can get lower-quality leads from those other marketing channels. We have had four leads ready to sign up for our product from Google, and one out of every seven leads of our Facebook Ads were never wanting to sign up in the first place. That has been our experience.”
Out of all the platforms Ryan Scollon of Ryan Scollon & Co uses, Google Ads brings the best results. “Google Ads is becoming more and more competitive as the years go on, but there’s no better platform to get in front of potential customers who are actively searching for your product or service. I run Google Ads campaigns for my clients along with Bing Ads, but I also use it to promote my own business. I have been running some experiments using Facebook Ads, and while they do return a healthy number of leads, the quality is questionable. Two in three leads are spam or low quality, which results in a lot of wasted time sifting through them,” Scollon tells us.
Gates Little from altLine Sobanco attributes Google Ads’ success to its status as an established platform. Little says, “Google search ads and Google display ads tend to work well in our industry. This is mainly because of the sense of trust and legitimacy consumers have already invested in Google, so there is trust that they are being shown relevant and safe ads. Because the user experience is so customized and can be managed by the audiences themselves, our ads get seen by people who need to see them more than on social media platforms. While we have used some social media ads, it is mainly when approaching from a content marketing standpoint.”
To monitor and improve the performance of your Google Ads campaigns, you can spend hours running a variety of reports and compiling selected metrics manually into one dashboard. Or, you can pull all your data automatically into one dashboard with Databox.
You can instantly review all of your campaigns and drill down on important metrics, such as:
Now you can benefit from the experience of our Google Ads experts, who have put together a plug-and-play Databox template showing all the key insights you need to optimize your Google Ads campaigns for conversion and ROI. It’s simple to implement and start using as a standalone dashboard or in PPC reports, and best of all, it’s free!
You can easily set it up in just a few clicks – no coding required.
To set up the dashboard, follow these 3 simple steps:
Step 1: Get the template
Step 2: Connect your Google Ads account with Databox.
Step 3: Watch your dashboard populate in seconds.
Many businesses that had some success with Google Ads found that its performance depends on their goals. Niche businesses may need to experiment more than others to get better results. Companies that received middling results from Google Ads also tended to get the best performance when they pursued leads over brand awareness.
Liz Teague of 3Gi Technology Ltd has varying results with Google Ads. “As a business looking for clients at a pivotal point in their Digital Transformation journeys, we find that Google Ads can be extremely hit and miss in terms of success rates. Marketing to a niche market can be compared to baking a cake: you may have the right ingredients and set the oven to the right temperature, yet still get varying levels of success. We have seen varying levels of success across several campaigns we have run, but found Google Ads to be most effective for more broad-term searches.
Teague also uses LinkedIn ads, which seem to provide more consistent results. “Our other main channel we use is sponsored LinkedIn posts, which when targeted to the right decision makers see a more consistent level of success,” Teague says.
WPSpeedFix.com’s Brendan Tully gets pretty good performance from Google Ads but at the cost of losing organic performance due to algorithm changes. “Ads are effective for us, BUT this is largely because Google has changed the SERP layout over time, so organic performance is significantly worse than it was five or more years ago. A typical SERP today has four ads at the top, often a featured snippet, Youtube videos, or a map pack, which means the traditional organic results can be halfway down the page, and even worse, on mobile! One frustrating feature of Google Ads is that we now need to advertise for our own brand terms simply because of the combination of reduced organic effectiveness and competitors bidding on brand terms.” Tully’s insight brings to light the impact major platform changes can have on overall marketing strategies.
Nathan Hawkes of Arcane Marketing highlights Google Ads’ potential for leads and brand awareness versus social advertising platforms. “Some of the campaign settings allow for different styles of management based on budget and our goals. None of the other platforms have these options for better support and goals on how you’d like to use your budget most effectively. Google Ads is presently the single most effective paid platform in my experience. It’s certainly the very best for people who are searching. It’s more of a ‘pull-marketing’ strategy,” Hawkes says of Google Ads.
Hawkes continues, “However, social media networks have done a great job of getting people’s attention to bring brand awareness. It’s where people’s attention is in abundance. Social media does a better job with demographic and interest targeting than any of the search platforms do presently. Lastly, I’ve experienced that Google Ads does the very best with conversions for people with buying intent and ready to make that decision. It’s a great bottom-of-the-funnel part in a sales funnel.”
Recommended Reading: Facebook Ads vs. Google Ads: Which Is Best for Your Business?
Chris Fawcett from Third Marble says that Google Ads’ effectiveness “…depends on the product or service, as well as the value proposition the website presents. For most ecommerce websites and B2C services, I would say Google Ads is by far the most effective at driving relevant leads and sales. If you would have looked up that business in the Yellow Pages 20-30 years ago, Google Ads is probably your most effective and scalable ad platform.”
At Mo Works Creative Agency, Emma King evaluates Google Ads’ performance differently depending on multiple factors. “With a range of B2C and B2B customers, different types of Google ad types are better for each target. For B2B customers, we have found that Performance Max ads have been the best in terms of CPL. For B2C customers, it has been clear that search campaigns were the best as these customers are more likely to take to Google Search when looking for their solution,” King says.
King continues, “When you compare this with other available platforms, we have seen Facebook as the majority strongest B2C platform and LinkedIn as the majority strongest B2B platform. Google is that happy medium platform that can work for everyone, but isn’t the strongest when comparing to other platforms.”
One business had an open answer related to a lack of effectiveness from Google Ads, and it follows trends from the previous two categories. This company values brand awareness, which it doesn’t get as much from Google Ads as it does from social media ads.
For our brand, social media ads tend to perform better than Google ads because our goal is to grow our audience. Our brand relies heavily on tutorials via Reels, as well as sharing photos of recipes to entice our audience to visit our website. We are placing ads that meet our desired customers where they are, and our visual assets are put to better use on social media than on Google Ads alone.”
CEO at My Bartender
While Google Ads’ performance for different businesses mainly depends on their goals and industry, the platform’s usability can also influence performance. We asked survey participants what changes they would make to Google Ads to make it more effective for their business. Here are the features they recommended to make the platform better for everyone.
Google Ads has a high degree of campaign customization, but Paweł Strykowski from WhitePress believes it could add more business and industry-specific customization to improve the experience.
“I would like to see Google Ads become more customized and tailored to individual businesses. For example, I would like to be able to customize the bidding strategies that I use for different campaigns and types of content so that I can get the most out of my budget,” Strykowski says.
Strykowski continues, “Additionally, it would be useful for Google Ads to provide better analytics on how my campaigns are performing compared to others in my industry, allowing me to make better decisions about how best to optimize my ad spend.”
A few respondents wanted to dig deeper with their campaign keywords and data, asking for more granularity from Google Ads.
Marketer Laura Hera is one marketer who wants this but has doubts about it happening. “I would like to see more granular data, but it seems that won’t happen. Instead, Google is offering less and less data about users,” Hera said. These changes relate to Google’s discontinuation of third-party cookies, but changes to keyword targeting could make up for the slack while maintaining users’ privacy.
As CRM Picker’s Rowen Gilliam explains, Google Ads has less specific keyword targeting than it did in the past: “A few years back we had a lot more control over our search keywords, with exact matching being only the keyword you have inserted. Nowadays it also takes ‘similar’ keywords. And Google’s trend of giving out less control can be worrying. But we’re still early in the process and it could be that this new way of Google is actually better. So let’s wait and see.”
Jamie Irwin of Windproof Gazebos also wants better keyword targeting, as well as deeper analytics. Irwin says, “A broader keyword selection is one of the most important changes I would like to see. Sometimes our businesses’ products or services need to fit into existing search terms, and we cannot target potential customers effectively.”
On top of this advanced targeting and better affordability, Irwin would also prefer more advanced analytics: “While recent additions such as local campaigns have made it easier to reach nearby consumers, I would also love to see more advanced analytics and reporting that would help us better assess which campaigns and ad placements generate the highest ROI. With these few enhancements, Google Ads can become an even more powerful tool to drive business growth.”
Besides faster loading speeds, Matthew Goulart of Ignite Digital would also like more granular targeting options. “Expanding deeper into interests or behaviours of users and targeting them would be helpful. Google has a vast library of signals, and opening more of that to allow even better-tailored campaigns would increase not only increase better-performing campaigns but user experiences would increase (you are receiving more specific ads to your specific needs/wants),” Goulart says.
Ad platforms like Google Ads don’t come with benchmarks to help you know if you’re getting a good return on investment. To help you know where you stand, we created Benchmark Groups. In exchange for sharing your anonymized ad results with others, you get to see the average performance of companies like yours.
Some of our groups for Google Ads include:
You can join as many groups as you want for free as long as you meet the criteria (in terms of company size, business type, and industry). Give it a shot by signing up for a Databox account now.
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