Running ads online is one of the quickest ways to reach new customers. But before you start spending, there’s one important step every business owner should take: know your benchmarks.
This means understanding what kind of results you can expect based on your industry. Without this, it’s hard to tell if your advertising is working or wasting money.
In this guide, we’ll explain what benchmarks are, why they matter, and how they can help you build smarter and more effective ad campaigns.
What Does “Know Your Benchmarks” Mean?
When you run a paid ad, it produces data. You can see how many people saw your ad, clicked on it, or took action like making a purchase or booking a service.
But how do you know if those numbers are any good?
That’s where benchmarks come in. A benchmark is a standard or average result that other businesses in your industry are seeing. It gives you something to compare your own results to.
So when we say “know your benchmarks”, we mean: Understand what normal ad performance looks like in your field.
It helps you figure out what’s working, what needs fixing, and how to improve over time.
Why Knowing Your Benchmarks Matters in Advertising
Starting a paid ad campaign without knowing your benchmark is like driving without a speedometer. You’re moving, but you don’t know how fast or if you’re going in the right direction.
Knowing your benchmark helps you:
- Set clear and realistic goals – You’ll know what to aim for based on industry standards.
- Measure your success – You’ll have real numbers to compare against.
- Spot problems early – If your ads are underperforming, you’ll know it quickly.
- Make better decisions – You can adjust your strategy based on what the data tells you.
- Avoid wasting money – You’ll know if you’re overspending or if your ads are off-track.
Without benchmarks, you’re left guessing. And guessing often leads to poor results.
The Key Advertising Benchmarks to Understand
There are a few important metrics to pay attention to when starting any paid advertising campaign. Here are the key ones you should know:
Click-Through Rate (CTR)
CTR shows the number of people who viewed your ad and decided to click on it. It’s a basic way to measure how appealing your ad is.
A higher CTR shows that your ad is catching attention and speaking to what your audience cares about.
Cost Per Click (CPC)
CPC is the amount an advertiser pays every time someone clicks on their ad. It tells you how expensive it is to get potential customers to visit your website.
Keeping CPC low while maintaining quality traffic is one of the main goals of a successful campaign.
Conversion Rate
Conversion rate shows the percentage of people who took action after clicking your ad. This might be making a purchase, filling in a form, or calling your business.
It helps you understand how effective your ad and landing page are at turning interest into action.
Cost Per Acquisition (CPA)
CPA tells you how much you’re paying to get a new customer. It’s a critical number for every business owner.
You want your CPA to be lower than the value a customer brings to your business. Otherwise, you’re losing money.
Return on Ad Spend (ROAS)
ROAS shows how much revenue you earn for every dollar you spend on advertising.
A strong ROAS means your ads are profitable. A weak one means it’s time to make changes.
How to Find Your Industry Benchmarks
You don’t need to guess your benchmarks, there are plenty of sources that publish industry averages.
Here’s where you can look:
- WordStream Benchmark Reports: A trusted source of online advertising data for small and medium businesses.
- Databox Benchmark Reports: Provides up-to-date Google Ads, Facebook Ads, and marketing performance benchmarks, allowing you to compare results by metric or industry.
- Your own previous results: If you’ve run ads before, your past performance is the best benchmark to build from.
Compare your current numbers with the averages. If your results are similar or better, you’re likely on the right track. If not, it might be time to adjust your strategy.
Using Benchmarks to Guide Your Ad Strategy
Once you’ve gathered your benchmarks data, it’s time to put it to use.
Here’s how:
Set realistic targets
Benchmarks give you a solid starting point. You can create goals based on what’s typical in your industry, rather than guessing or aiming too high too soon.
Build a clear budget
If you know the average cost per click or cost per acquisition, you can plan how much to spend and what results to expect. This helps avoid overspending or underperforming.
Track your ads with purpose
By comparing your performance to the benchmark, you can see what’s working and what’s not. You can then make smart decisions to improve your ads.
Improve over time
Benchmarks don’t just help at the start, they help throughout the life of your campaign. Use them to regularly check progress and make small improvements that lead to better results.
Mistakes to Avoid When You Skip This Step
Not knowing your benchmarks can lead to some costly mistakes. These are the common ones we see:
- Spending too much per click without realising it’s above average
- Ending campaigns too early because you don’t recognise that they’re performing well
- Wasting money on poor-performing ads that could have been fixed
- Setting unrealistic goals and feeling disappointed when they’re not reached
- Making poor decisions because there’s no real data to compare against
Avoiding these mistakes starts with one simple step: know your benchmarks.
Conclusions:
If you are a business owner, your time and money are valuable. You want to make sure every bit of it counts when you advertise.
That’s why taking the time to know your benchmarks is so important. It gives you the insight you need to launch better ads, measure performance, and grow your business with confidence.
Start smart. Start with data. And let the benchmarks guide your way.