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Search Ad Conversion Rates Decline, Cost per Lead Increases in 2023


In the ever-evolving landscape of paid search advertising, 2023 has brought significant changes. A recent benchmark report from LocalIQ’s WordStream reveals a concerning trend: conversion rates have dropped across nearly all industries, leading to higher costs per lead (CPL). While the increase in cost per click (CPC) has been somewhat tempered compared to previous years, businesses must take note of these shifts to optimize their paid search strategies effectively.

Conversion Rates: The average conversion rate for search ads stands at 7.04%, with only two industries, Beauty and Personal Care, and Education and Instruction, managing to avoid a decrease. However, some sectors experienced significant declines, such as Arts & Entertainment (down 36.2% YoY) and Apparel, Fashion, and Jewelry (down 34.9% YoY).

Industries with the highest conversion rates include Animals and Pets (13.41%), Physicians and Surgeons (13.12%), and Automotive Repair, Service, and Parts (12.61%). Conversely, Apparel, Fashion, and Jewelry (1.57%), Furniture (2.57%), and Real Estate (2.88%) reported the lowest average conversion rates.

Cost per Lead (CPL): The average CPL has risen to $53.52, impacting 91% of industries with increased CPL and decreased conversion rates. However, Automotive Sales (-8.6%) and Beauty and Personal Care (-3.9%) were the only industries to witness a CPL decrease.

Industries with the highest CPLs include Career and Employment ($132.95), Attorneys and Legal Services ($111.05), and Furniture ($108.85). On the other hand, Automotive Repair, Services and Parts ($21.12), Animals and Pets ($23.57), and Shopping, Collectibles, and Gifts ($31.50) reported the lowest CPLs.

Click-Through Rate (CTR): Overall, the CTR has seen a positive trend, increasing to 6.11% for most industries. While Business Services and Industrial and Commercial sectors experienced slight decreases, the impact was not as significant as the CTR increases observed in other industries.

Industries with the highest click-through rates include Arts and Entertainment (11.78%), Sports and Recreation (10.53%), and Travel (10.03%). Conversely, Attorneys and Legal Services (4.76%), Home and Home Improvement (4.80%), and Business Services (5.11%) reported the lowest CTRs.

Cost per Click (CPC): The CPC has shown mixed results, with an increase in 14 industries, a decrease in 8 industries, and no change in Apparel, Fashion, and Jewelry. Industries with the highest CPCs include Attorneys and Legal Services ($9.21), Dentists and Dental Services ($6.69), and Home and Home Improvement ($6.55). In contrast, Arts and Entertainment ($1.55), Real Estate ($1.55), and Travel ($1.63) reported the lowest CPCs.


The 2023 search advertising benchmark report highlights the challenges faced by businesses in terms of declining conversion rates and rising costs per lead. Advertisers must closely analyze their performance metrics, compare them with industry benchmarks, and adapt their strategies to achieve better results while optimizing costs. Stay informed and make data-driven decisions to navigate the dynamic landscape of paid search advertising successfully, by getting us to run your digital ads.

For more detailed industry-specific insights and trends, refer to WordStream’s Google Ads Benchmarks 2023: Key Trends & Insights for Every Industry.

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