PPC Search Ads: Costs are Rising, Conversion Rates are Declining
Posted: Tue Feb 11, 2025 9:08 am
PPC search ads are becoming too expensive for advertisers given their high conversion rates. Learn more about this issue in our article.
Costs are rising, conversion rates are falling, and Google is rejoicing
Marketing firm LocaliQ has released its annual PPC search benchmark report, which shows that advertisers are seeing their costs per lead and ad click increase while conversion rates are falling, even as Google posts record profits.
LocaliQ’s annual report states that the increased advertising costs are a result of “increased competition and increased monetization of Google search results.” However, it’s hard to resist speculating about what steps Google is taking behind the scenes to justify higher ad prices while failing to deliver a corresponding return on investment for its advertisers.
Development of key trends
Conversion Rate: There is a year-over-year decline in most in iceland mobile database dustries. Conversion rates increased in 12 of the 23 industries surveyed, with an average conversion rate of 6.96%. The largest increase was in Apparel/Fashion (up 112.01%), while Finance & Insurance saw a decrease (down 32.40%).
Tip for you: If you want to improve your conversion rate, it's worth applying a CRO strategy .
Cost per click (CPC): Increased by an average of 10% across 86% of industries. Its average value was CZK 109.13. The highest increases were recorded in the real estate, sports and recreation, and personal services industries.
Click-through rate (CTR): Increased by 5% on average across 70% of industries. Its average value was 6.42%. It is still increasing year-on-year. In 2022, it reached 5.91%, in 2023 it reached 6.11%.
Cost per lead (CPL): Here too, there was a 25% growth in 19 out of 23 sectors. This is a slight decrease in the growth rate compared to 2023. The average CPL has been 1,561.62 CZK so far this year. In 2023, it reached 1,253.23 CZK and in 2022, only 1,046.81 CZK.
What impact does this have on advertisers and Google?
Rising CPL and CPC costs have a negative impact on advertisers, as they have to spend more money to acquire a potential customer, and advertising costs them more money. This trend can put pressure on marketing budgets. This is especially disadvantageous for companies that are struggling financially.
In contrast, Google benefits from this situation, as it shows increasing profits, which raises questions about what steps it is taking to justify higher prices for PPC ads . It does not provide advertisers with a higher return on investment for the increasing costs.
Costs are rising, conversion rates are falling, and Google is rejoicing
Marketing firm LocaliQ has released its annual PPC search benchmark report, which shows that advertisers are seeing their costs per lead and ad click increase while conversion rates are falling, even as Google posts record profits.
LocaliQ’s annual report states that the increased advertising costs are a result of “increased competition and increased monetization of Google search results.” However, it’s hard to resist speculating about what steps Google is taking behind the scenes to justify higher ad prices while failing to deliver a corresponding return on investment for its advertisers.
Development of key trends
Conversion Rate: There is a year-over-year decline in most in iceland mobile database dustries. Conversion rates increased in 12 of the 23 industries surveyed, with an average conversion rate of 6.96%. The largest increase was in Apparel/Fashion (up 112.01%), while Finance & Insurance saw a decrease (down 32.40%).
Tip for you: If you want to improve your conversion rate, it's worth applying a CRO strategy .
Cost per click (CPC): Increased by an average of 10% across 86% of industries. Its average value was CZK 109.13. The highest increases were recorded in the real estate, sports and recreation, and personal services industries.
Click-through rate (CTR): Increased by 5% on average across 70% of industries. Its average value was 6.42%. It is still increasing year-on-year. In 2022, it reached 5.91%, in 2023 it reached 6.11%.
Cost per lead (CPL): Here too, there was a 25% growth in 19 out of 23 sectors. This is a slight decrease in the growth rate compared to 2023. The average CPL has been 1,561.62 CZK so far this year. In 2023, it reached 1,253.23 CZK and in 2022, only 1,046.81 CZK.
What impact does this have on advertisers and Google?
Rising CPL and CPC costs have a negative impact on advertisers, as they have to spend more money to acquire a potential customer, and advertising costs them more money. This trend can put pressure on marketing budgets. This is especially disadvantageous for companies that are struggling financially.
In contrast, Google benefits from this situation, as it shows increasing profits, which raises questions about what steps it is taking to justify higher prices for PPC ads . It does not provide advertisers with a higher return on investment for the increasing costs.