Monday, August 20th, 2018
Facebook ad benchmarks matter, especially when your goal is business growth. Companies large and small in almost every industry are scrambling for attention on Facebook. How do you know if your ads are working? We’d all love to have what we’d consider high click-through rates (CTRs) and low cost per action (CPA), but how do we know how we’re stacking up? How are our metrics comparing to those of our competition and our industry in general? Wouldn’t it be great to have access to industry averages to measure your results against? Luckily, our friends at WordStream have made that information available to everyone in their Facebook Advertising Benchmark report which includes click-through rate, cost per click (CPC), conversion rate (CVR) & cost per action data across 17 industries. Let’s take a look!
Facebook Ad Benchmarks by Industry in 2018
Click Through Rate (CTR) By Industry
The first Facebook ad benchmark we’ll look at is CTR. Average click-through rate of all industries is 0.90%. You’ll see that the legal industry has the highest average CTR at 1.61% followed closely by retail at 1.59%. The highest ranked may come as a surprise to some. After all, legal has nothing in common with some of the other industries with high CTRs like retail, apparel, beauty or fitness. Consumers in these industries are more apt to be swayed by eye-catching, creative ads. Many of them make impulse purchases. Legal counsel isn’t exactly going to be an impulse buy.
Bringing up the rear of the industry field is employment and job training with the financial industry just slightly ahead. Social media marketers in industries like financial services have it harder than most. People aren’t often in the market for a mortgage home equity loan. This is why it’s so important for these marketers to build sales funnels and lead customers and prospects through the sales process. We’ll cover this important topic in a future blog.
Cost Per Click (CPC) By Industry
So, we know how often our ads should be getting clicked, but how much should it cost? According to Facebook ad benchmarks, the average CPC of all industries together is $1.72. Financials, consumer services & the home improvement industry top the charts in terms of highest cost per click. This makes perfect sense. Marketers in these industry groups are willing to pay more because a conversion can result in a much more significant return on investment. $3.77 per click when we’re talking about attempting to convert on a $200,000 mortgage loan is much easier to swallow than if we paid the same to try to sell a t-shirt for $19.99 (apparel has the lowest CPC).
Conversion Rate (CVR) By Industry
Now let’s talk conversions as they pertain to Facebook ad benchmarks. Remember, at the end of the day, clicks don’t pay the bills, conversions do! The average CVR is 9.21%. Companies in the fitness and education industries enjoy the highest CVRs at 14.29% & 13.58% respectively. Tech and travel & hospitality are our CVR bottom feeders with CVRs under 3%. Often times social media marketers can achieve average to high CTR & CPC metrics but experience a drop off when it comes to conversions. This may be the result of poor ad targeting, bad creative or an over-complicated landing page. It may also be as simple as putting a re-marketing plan in place. Re-marketing is another topic our social media marketing team will cover in the near future.
Cost Per Action (CPA) By Industry
Conversions are great, but we need to know how much they cost. If we’re paying more for a conversion than it’s worth, it’s time to go back to the drawing board. Or invest that money in other platforms where we’re achieving a higher ROI. The average CPA across all industries is $18.68. It’s most expensive for tech companies to sell products and services or obtain leads via Facebook. They pay over $55 per action! Organizations in the educational industry are only paying an average of $7.85. This is why it’s important for our tracking to be on point. It allows us to make decisions based on the return our Facebook ads are providing, not our cost.
Facebook ad benchmarks – the takeaway
To wrap this all up, is it helpful to know what the average Facebooks ad benchmarks are in your industry? Yes, of course. This important information can offer insight as to how well you stack up from a metrics perspective and provide an idea of where you need to improve. Just remember that what’s most important is the return on social media investment. Businesses and organizations are unique, even those competing within the same industry. Set up your tracking and know your numbers. It doesn’t make sense to throw money at any form of advertising if there’s no return. If you’re looking for help improving the performance of your Facebook ads, contact us. We’re always happy to help new clients get on the right track!Tags: advertising benchmarks, average click through rate, average conversion cost, average conversion rate, average cost per action, average cost per click, effective facebook ads, facebook ad benchmarks, facebook ad industry benchmarks, facebook ad performance, Facebook ads, facebook advertising, facebook advertising benchmarks, facebook marketing, high performing facebook ads, social media marketing