Pay-per-click advertising is a key component of a well-diversified marketing strategy. Compared to other tactics in the toolbox, PPC is one of the few that can deliver direct and measurable results. However, it’s also a significant ongoing expense, and businesses need to be sure that they are allocating their budgets wisely.

What is the PPC Conversion Rate?

Your PPC conversion rate is one of the most telling indicators of how your ad campaign is performing. This metric measures how effectively your campaigns are converting traffic into customers. Marketers pay close attention to PPC conversion rates because weakness here can be an early sign of an ineffective strategy or poor campaign execution.

That said, there is no perfect PPC strategy. Advertising is all about braving the ups and well as the downs. But the good news is if you can figure out what’s causing lacklustre conversion performance, you can fix it.

Calculating Your PPC Conversion Rate

If you are using a tool like Google Analytics 4 —and if you are running any type of Google Ads campaign you absolutely should be— it’s easy to get key metrics like click-through rates, cost per click, and your PPC conversion rate. However, it’s also a good idea to understand where these numbers come from.

The formula for PPC is pretty straightforward; it’s your total conversions divided by your total number of clicks multiplied by 100:

Conversion rate = (Number of conversions ÷ Number of clicks) X 100

Ok, your turn!

How Does Your PPC Conversion Rate Measure Up?

Now you might be wondering, what’s a good PPC conversion rate? Unfortunately, there’s no magic number. Conversion rates vary widely across different industries and platforms; what’s great for an e-commerce company might not be as impressive for an insurance or financial services provider. PPC performance also differs quite substantially between platforms. So, before we get into average overall PPC performance, here’s an idea of how ads might fare depending on where you’re placing them.

Google Ads

Google Ads are a key part of most businesses’ ad strategies. While you can’t measure apples to beach balls, the average PPC conversion rate for Google Ads across all industries is 3.75% on the search network and 0.77% on the Google Display Network.
Keep in mind this number will vary depending on your industry, as well as how you’ve crafted your keyword targets, bidding strategy, and the ability of your landing pages to deliver on what was promised (more on that later).

Amazon Ads

For e-commerce businesses operating within the Amazon ecosystem, Amazon Ads can be a veritable goldmine for PPC conversions, with an average rate of nearly 10%. This traffic is too good to pass up, and even businesses with their own D2C channels or brick-and-mortar operations have been adopting omnichannel retail strategies that include Amazon, Google, and social media.

Social Media Ads

Social media platforms are an increasingly vital resource for drumming up interest in your business; however, which platforms deliver the best results vary significantly between products, target audiences, and industries.

For example, Facebook has a strong PPC return for products targeting Millennials, ranging between 2.31% for technology-based products up to 14.29% for fitness products and services, while TikTok performs well for products and services targeting younger audiences and LinkedIn converts at a rate of 5% to 15% and is most popular with professionals between 24 and 35. The key here is to know your audience and choose a strategy that will resonate best with the platform and your target group.

In general, a PPC conversion rate between 2% and 5% is considered successful. An exceptional ad strategy might earn you higher rates (which is great!), but if you’re converting under 2% of traffic, it might be time to investigate your PPC performance
and fix conversion issues.

What Factors Could be Derailing Your PPC Conversion Rate?

There are a few things that need to come together to run a successful PPC campaign; you need to combine strategic ad placement, a well-rounded bidding strategy, compelling copy, and landing pages that drive your targeted traffic to take a desired action. Weakness in any of these areas could be the cause of poor PPC conversion rates. But the good news is, these problems are very fixable.

Budget Side Problems

The first place you want to look for conversion weakness is your budget. You don’t necessarily need to spend more to earn better results, but you need to make sure the money you are spending is being used efficiently.

A common issue companies have with Google Ads is Google not spending their entire ad budget. But wait, doesn’t Google want your money? Yes, they do. The problem here is often not with Google, but with how your bid strategy is structured. Google Ads works on a competitive bidding system. If you have set your maximum bid too low you might not be winning as many bids as you want and your ads will not appear as often as they could, leading to missed opportunities and low conversions.

There are two metrics you’ll want to look at here to see if budget is the cause of your low conversions. The first is your Search Lost Impression Share (Budget). This metric tells you how many ad places you lost due to insufficient budget; a high number here indicates your keywords are getting traffic, but your bid isn’t competitive enough to win a spot. The other is your Ad Group level Performance Graph, which shows how specific ad groups are performing and spending.

If either of these metrics shows that you’re losing ad impressions due to budget constraints, the solution is to either manually reduce your cost-per-click (CPC) or loosen Smart Bidding targets like return on ad spend (ROAS) to capture more traffic.

Keyword Setbacks

The performance of your PPC campaign relies heavily on your target keywords so it’s likely that you spent a great deal of time researching and refining your keyword targets, negative keywords, and match types. However, this is also an area that needs to be continually monitored and adjusted. If you’ve noticed a drop in PPC conversions underperforming keywords could be to blame.

Regularly check in with PPC search term reports to see how your keywords are performing and adjust your spending accordingly. Poor PPC conversion rates are often the result of targeting overly broad keywords that bring in irrelevant traffic or highly competitive (and expensive) keywords that drive traffic but fail to convert.

To fix this problem you can try focusing on long-tail keywords that are more specific to your audience’s intent as well as creating a balanced mix of keyword match types including broad, phrase, and exact match results.

Mismatch Between Ad Copy and Landing Page Content

If your ads are getting impressions but still failing to convert, the problem may be a disconnect between your ad copy and your landing page content. When you’ve promised one thing in your ad and delivered something else on your landing page users might feel misled and leave without taking further action. Not only have you now paid for a non-converting click (and lower your conversion rate), but you may have also left a lasting negative impression on a potential future buyer, both situations you’d probably prefer to avoid.

To help boost your PPC conversions, ensure that the message, language and offers in your ad copy are mirrored on your landing page. Both your ad and landing page should prominently feature the same (or very similar) CTA, and keywords, and even maintain visual consistency to create an overall cohesive user experience.

Investing Before Testing

Testing is a crucial part of running a successful ad campaign. Ideally, you want to run A/B testing before you launch a PPC campaign, but if you are struggling with low conversions experimenting with two or more alternative versions of your ad copy or even land pages can help you narrow down what’s wrong so you can make the appropriate corrections.

There are three areas you really want to focus on. First, your ad copy. Review your headlines and CTAs and test different variants to see which offers the highest engagement. Next, evaluate your landing pages, experimenting with layout, images, and even long-form vs short-form content to see how users respond. And finally, consider testing different keywords to see if you are indeed targeting the right ones and which perform better.

Remember, the key to successful A/B testing is to limit your testing to one thing at a time so you can pinpoint precisely where your issue lies.

Keeping an Eye on The Prize

Every click counts in the competitive landscape of PPC advertising and while sinking PPC conversions might be enough to trigger panic, it’s important to remain calm and figure out what is the cause of your poor performance before enacting a complete campaign overhaul.

By carefully examining factors like your budget, keyword targeting, ad copy, and landing page alignment, you can uncover the root issues impacting your performance and refine your approach to better meet the needs of your audience and market. Remember, PPC success isn’t about quick fixes, it’s about gaining insight to help turn more clicks into conversions.