Digital Advertising in 2023: What You Need To Know

In today’s digital landscape, search advertising has proven to be a powerful tool for businesses seeking to promote their products and services online.

With an average return on investment of 200% (or $2 for every $1 spent), pay-per-click (PPC) advertising has become a go-to strategy for marketers. 

However, as marketing costs continue to rise, it’s crucial to optimize your search campaigns to ensure they deliver the desired results.

In this blog, we’ll explore the latest data and insights to shed light on the evolving trends and benchmarks in search advertising in 2023.

Unveiling Google Ads Benchmarks

The National Positions team researched and found a comprehensive analysis of 17,253 US-based search advertising campaigns spanning from April 2022 to March 2023. The study focused on 23 industries and compiled data primarily from Google Ads, with a smaller percentage from Microsoft Ads. 

These benchmarks provide valuable insights to help businesses gauge the performance of their search campaigns and make informed decisions to maximize their advertising success.

Key Trends We Are Considering in 2023

Let’s start by zooming out and examining the big-picture trends that emerged from the analysis:

– Increased Click-Through Rates (CTR): In 22 out of 24 industries, CTRs experienced a year-over-year increase. While Business Services and Industrial & Commercial sectors witnessed slight decreases, the overall upward trend was more significant across other industries.

– Rising Cost Per Click (CPC): CPCs increased for 61% of industries, indicating the impact of inflation and increased competition. However, 35% of industries experienced a decrease in CPC, while the Apparel, Fashion & Jewelry industry maintained a stable CPC throughout the year.

– Declining Conversion Rates (CVR): Most industries observed a decrease in conversion rates, with only two exceptions—Beauty & Personal Care and Education & Instruction. Consequently, 91% of industries witnessed an increase in cost per lead (CPL) alongside a decrease in CVR.

 – Increasing Cost Per Lead (CPL): With the exception of Automotive Sales and Beauty & Personal Care industries, CPL increased for all other sectors. This trend reflects the rising costs associated with acquiring leads through search ads. However, the data suggests that the year-over-year increases in CPL have slowed down compared to previous years.

Implications for Your Ecommerce Brand

These trends indicate that the search ads landscape is becoming more challenging for businesses. However, when executed effectively, search advertising remains a powerful marketing tool.

It is crucial to navigate these challenges and leverage the insights provided by National Positions’ benchmarks to optimize your search campaigns and drive better results.

Taking Action

Here are some actionable takeaways for your business based on the findings:

 – Budget Flexibility: Given the increasing costs, consider allocating sufficient budget to compete effectively in the auction and maximize your campaign’s reach. Flexibility in budget allocation allows you to optimize your campaigns and adapt to changing market conditions.

 – Evolving Customer Journey: As the buyer’s journey evolves, it’s essential to understand your audience’s search behavior and adjust your Google Ads strategy accordingly. Integrating search advertising into a cross-channel marketing approach can help capture users at different stages of their journey, ensuring a more holistic and effective advertising strategy.

 – Highly Clickable Ads: With the rise in click-through rates, focus on optimizing your ad copy and leveraging multiple ad assets. Platforms like Google Ads now offer responsive search ads and additional ad assets, enhancing the quality and appeal of your ads to users.

– Tracking and Reporting: Ensure your tracking and reporting mechanisms are in place to monitor your campaign’s performance effectively. Benchmark your own progress against industry averages and use the data to make data-backed marketing decisions. This will help you identify areas of improvement and optimize your campaigns accordingly.

AdBeacon – Your Greatest Asset

Just over a year ago AdBeacon was launched and has been invaluable in tackling rising costs and third-party ad platform data limitations.

An underlying factor in rising costs is Google and Facebook’s reliance on third-party data—fractured data that is passed onto ecommerce brands and advertisers. 

AdBeacon’s focus on first-party conversion data gives us (and you) a huge advantage in optimizing and scaling successful ad campaigns. Using this tool, we have been able to cut optimization times in half, scale campaigns faster, and all with greater accuracy. 

If you have not seen AdBeacon in action yet, we highly recommend you check out what they can do for you.

All new National Positions paid media clients automatically have AdBeacon applied to their campaigns. It’s great for our teams that manage campaigns and even better for our clients.

The Year Is Far From Over

As marketing costs continue to rise in 2023, it’s essential for businesses to stay informed and adapt their strategies to maximize their search advertising success. 

If you need some help navigating these changes, contact our team today and we will be more than happy to look under your paid media hood and get you back on the road to success.