Some time ago retailers began to receive more of their paid search clicks from shopping ads than from text ads. But as the industry increasingly towards Google Shopping ads, their click-through rate (CTR) have fallen. In fact, CTR for retailers investing in Google Shopping ads dropped by 18% last year, a decrease reflected across all retail verticals, per the new benchmark report [download page] by Sidecar.
The decline is attributed to Google offering more Shopping ad inventory last year.
That being said, the vertical which had the highest CTR was Automotive Parts (1.41%) followed by Flowers/Gifts (1.30%). Computers/Electronics experienced the lowest CTR in 2018 at 0.73% while Office Supplies and Jewelry both performed just slightly better with 0.76% CTR in 2018.
In 2017, Toys/Hobbies was the top performing vertical for Return on Ad Spend (ROAS) at 10.25. In 2018, the ROAS for Toys/Hobbies experienced a substantial decrease year-over-year, dropping to 7.31. Electronics, the second highest performer from 2017, took over the top spot this year with a ROAS of 10.09 – making it significantly more profitable than Automotive Parts, which had the second highest ROAS at 8.92.
At the other end of the spectrum, Health/Beauty experienced no change in ROAS from 2017. Its ROAS remained at 3.39, putting it at the bottom of the category rankings.
Apparel/Accessories, which sports the highest average order value (AOV) at $291, also boasts the highest conversion rate of all the verticals at 3.09%. Food/Drug had the lowest AOV ($54) while Automotive parts had the lowest conversion rate (1.12%).
Paid Search Benchmarks
By comparison, there was far more growth in CTR for Google paid search in 2018. The Food/Drug category had the highest percentage of growth (67%) year-over-year, reaching an average click-through rate of 1.21%. With its 49% growth, Health/Beauty had the highest CTR (3.24%) of the verticals analyzed.
Research from IRI revealed that Pet Supplies and Pet Food were two of the fastest growing CPG e-commerce categories in 2018. However, Pet Care experienced a 35% year-over-year decrease in CTR (with a CTR of 2.22%) for Google paid search in the same year
Here are some other Google paid search benchmarks:
- The vertical with the highest ROAS, Toys/Hobbies (14.94), also saw the highest rate of ROAS growth, at 29%. At 3.67, Computers/Electronic had the lowest Google paid search ROAS (a 15% decrease from 2017).
- Jewelry had the largest paid search AOV at $309 while Flowers/GIfts had the lowest ($53).
- When it comes to paid search conversion rates, Office Supplies had the highest, by far, at 10.07%. Jewelry experienced the lowest conversion rate at 1.49%.
The full report is available to access here.