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Staying Ahead Of The Game: Industry-Specific Key Trends And Insights From The 2023 Google Ads Benchmarks Report

It’s common knowledge that search ads are an excellent way to increase visibility and drive business growth online. When properly optimized, pay-per-click (PPC) advertising can generate a remarkable return on investment (ROI) of 200%, earning $2 for every $1 spent.

But here’s the real question: Are your search campaigns performing at their highest potential? When you invest your advertising budget, you want assurance that your campaigns are working and thriving.

Imagine if you could peek into your competitors’ accounts to see how your campaigns measure up. While that may not be feasible, we have an even better solution.

 

Compete on Google Ads

 

After extensive analysis of 17,253 search advertising campaigns in the United States, from April 1, 2022, to March 31, 2023, we proudly present our comprehensive search advertising benchmarks for 23 diverse industries. Our benchmarks primarily focus on Google Ads data, with Microsoft Ads accounting for about 20% of the information, while the remaining 80% comes from Google Ads.

 

 

Key Trends in Search Ads Benchmarks

Although the data is incredibly vast, we can zoom out and highlight the significant trends that emerged.

Here are the essential trends that you should be aware of:

Click-through rate (CTR) increased YoY for 21 industries. Except for Business Services and Industrial and Commercial, which experienced slight decreases.

Cost per click (CPC) rose YoY for 61% of industries (14 industries). Decreased for 35% (8 industries), and remained steady for only one industry (Apparel, Fashion, and Jewelry). This statistic is not shocking since our data reflect a consistent increase in CPC throughout 2022.

For most industries, conversion rate (CVR) witnessed a significant YoY decline. Only two industries experienced an increase in CVR (Beauty and Personal Care and Education and Instruction), which means that 91% of the industries saw a decrease in CVR and an increase in cost per lead (CPL).

YoY, the CPL increased across all industries except Automotive Sales and Beauty and Personal Care. This finding indicates that 91% of industries now spend more on acquiring a lead through search ads. However, our latest data for 2023 suggests a slowing trend compared to the YoY increase witnessed in 2022.

The evident trend from our findings is that the search ads landscape is becoming increasingly challenging. However, if navigated skillfully, it can also be hugely rewarding.

 

 

 

 

Comprehensive Search Ads Benchmarks for All Industries

Let’s begin the data deep-dive with a comprehensive presentation of the Microsoft Ads and Google Ads benchmarks covering all four metrics across various industries:

 

Search Advertising Benchmarks 2023

Average CPC, CPL, CTR, CVR

 

 

Ready to take a closer look? Let’s go through a break-down of each metric:

 

 

Analyzing Average Click-Through Rate in Search Ads

Examining your average click-through rate can provide valuable insights into the effectiveness of your search ad quality. A higher ad rank and compelling ad copy will likely attract more clicks, ultimately increasing your chances of conversions.

To calculate your average click-through rate, divide the total number of clicks by the total number of impressions.

 

In Google Ads, the average click-through rate for 2023 is reported to be 6.11%.

Business Category Avg. Click-Through Rate
Arts & Entertainment  8.12% 
Animals & Pets  6.46% 
Apparel / Fashion & Jewelry  11.78% 
Attorneys & Legal Services 4.76% 
Automotive — For Sale¬† 8.77%¬†
Automotive — Repair, Service & Parts¬† 5.91%¬†
Beauty & Personal Care  6.87% 
Business Services  5.11% 
Career & Employment  6.67% 
Dentists & Dental Services  5.34% 
Education & Instruction  6.41% 
Finance & Insurance  6.18%
Furniture  6.19% 
Health & Fitness  6.44% 
Home & Home Improvement  4.80%
Industrial & Commercial  5.57%
Personal Services (Weddings, Cleaners, etc.)  7.54%
Physicians & Surgeons  6.73% 
Real Estate  9.09%
Restaurants & Food 8.65%
Shopping, Collectibles & Gifts (General) 6.39% 
Sports & Recreation  10.53% 
Travel  10.03% 

 

Industries with the lowest click-through rates are Attorneys and Legal Services at 4.76%, Home and Home Improvement at 4.80%, and Business Services at 5.11%.

However, the industries with the highest click-through rates are Arts and Entertainment at 11.78%, Sports and Recreation at 10.53%, and Travel at 10.03%.

 

Average click-through rate: YoY

Here’s how click-through rates have changed in 2023 compared to 2022:

 

Search Advertising Benchmarks 2023

When analyzing the year-over-year changes in average click-through rates, we observed the following trends:

  • Business Services experienced a decline of 2.11% in click-through rates.
  • Industrial and Commercial saw a decrease of 1.94% in click-through rates.

On the other hand, several industries showed significant improvements in their click-through rates:

  • Sports and Recreation witnessed a remarkable increase of 17.65% year over year.
  • Shopping, Collectables, and Gifts experienced a significant boost of 15.55% year over year.
  • Beauty and Personal Care displayed a notable rise of 15.08% year over year.

 

 

Tips for Improving Click-Through Rates

If your click-through rates are below average for your industry, don’t worry. You can implement several strategies to improve your click-through rate effectively and quickly. Consider the following suggestions:

Review and Enhance Your Ad Copy: Assess your advertisement copy and consider methods to enhance its appeal and captivation. Integrate impactful words or emotionally evocative phrases that deeply resonate with your intended audience, ultimately enticing them to take action and click.

Think Outside the Box: Embrace your creativity and foster innovation in your approach. Dare to venture into unexplored angles or unique selling propositions your industry has yet to experiment with. This boldness can set you apart and seize the interest of prospective customers, leaving a memorable impression.

Reassess Target Audience: Take a step back and reconsider your target audience. Review your PPC keywords and consider the intent behind them. Your Search Terms Report can provide insights into whether you attract users in search of information rather than those ready to take action. Adjust your targeting accordingly.

 

 

Average Cost Per Click in Search Ads

Calculating the average cost per click in Google Ads or Microsoft Ads entails dividing the total expenditure of your campaign by the number of clicks obtained during the ad cycle. This computation offers a cost-efficient assessment of your ad performance and generates valuable insights for refining your advertising strategies. As clicks are pivotal in search campaigns, they guide ad viewers to your landing page, ultimately increasing the potential for valuable customer conversions.

It’s essential to note that each click carries a different cost, as it is calculated dynamically by the algorithms used in the Google Ads auction. Therefore, the average cost per click is a valuable reference when formulating bidding strategies, optimizing ad copy, setting budgets, and more.

Typically, accounts with higher click-through rates tend to have lower costs per click because the increased number of clicks compensates for the overall spending. However, it is important to consider that factors such as intense competition within an industry can challenge this correlation. Let’s take a look at the range of costs per click across industries for the year 2023:

 

As of 2023, the average cost per click (CPC) in Google Ads is $4.22.

Business Category  Avg. Click-Through Rate
Arts & Entertainment  $3.13  
Animals & Pets  $2.72  
Apparel / Fashion & Jewelry   $1.55  
Attorneys & Legal Services $9.21  
Automotive — For Sale¬† $2.08¬†¬†
Automotive — Repair, Service & Parts¬† ¬†$3.06¬†¬†
Beauty & Personal Care   $2.89  
Business Services   $5.47  
Career & Employment   $3.78  
Dentists & Dental Services   $6.69  
Education & Instruction   $4.10  
Finance & Insurance   $4.01  
Furniture   $2.77  
Health & Fitness   $4.18  
Home & Home Improvement  $6.55  
Industrial & Commercial   $4.35  
Personal Services (Weddings, Cleaners, etc.)   $3.90  
Physicians & Surgeons   $3.97  
Real Estate  $1.55  
Restaurants & Food  $1.95  
Shopping, Collectibles & Gifts (General)  $2.44  
Sports & Recreation   $1.77  
Travel   $1.63 

Here are some insights regarding the costs per click in different industries:

Industries with the highest costs per click:

  • Attorneys and Legal services: $9.21
  • Dentists and Dental Services: $6.69
  • Home and Home Improvement: $6.55

On the other hand, industries with the lowest costs per click include:

  • Arts and Entertainment: $1.55
  • Real Estate: $1.55
  • Travel: $1.63

 

 

Average cost per click: Year over Year (YoY)

Let’s take a look at how the cost-per-click numbers compare to last year’s data:

Compared to last year, a higher percentage of industries experienced an increase in cost per click this year (61% vs. 57%). The industries with the most significant year-over-year increases were Personal Services (up by 17.47%), Furniture (up by 12.6%), and Real Estate (up by 12.32%).

“On the other hand, specific industries achieved significant cost savings in terms of cost per click this year compared to last year. Finance and Insurance, with the help of PPC Beast, had the most substantial decrease, dropping 11.48% in cost per click. Additionally, Auto Sales saw an average cost-per-click reduction of 8.37%, and Dentists and Dental Services experienced a decrease of 7.60%.

 

 

Improving Your Cost per Click:

There’s no shortage of methods to decrease your cost per click, but the key is identifying what works for you and achieving a balance in your optimization approach. Reducing your average CPC shouldn’t come at the expense of quality clicks and conversions.

However, a good starting point is examining your Quality Score. If you offer viewers a top-notch landing page experience and serve them with a pertinent ad, Google will likely reward you with less expensive clicks since your ad is the best alternative option for the users.

Another option to consider is reassessing your bidding strategy. Depending on the optimization goal, several strategies may cause you to pay more or less for a click. Refer to our comprehensive analysis of the advantages and disadvantages of every Google Ads bidding strategy, including the use of a PPC agency, for further insight.

PPC specialist and Google Customer Success Manager Alessandro Colarossi agrees that bidding can impact your cost-per-click performance. “Consider using machine learning-based bid strategies such as Google’s Target ROAS to boost your PPC results,” said Colarossi. “These advanced Google Ads features employ artificial intelligence to optimize your campaigns, resulting in more efficient targeting, bidding, and ad placement.”¬†

 

 

Average Conversion Rate in Search Ads:

The average conversion rate in search ads is a measure of how frequently the clicks from your campaigns result in conversions. It is calculated by dividing the total number of conversions by the total number of clicks.

The conversion rate is an important metric that can directly impact your business’s overall performance, as increasing conversions can help offset your lead costs.

According to Colarossi, a digital marketing expert, the conversion rate is one of the most important metrics to measure success in a PPC (pay-per-click) campaign. It provides valuable insights into how successful the campaign is in converting leads into customers, which is often the primary goal of most PPC Beast campaigns.

When the conversion rate is high, it demonstrates that the campaign is effectively resonating with its target audience and motivating them to take the desired action. Therefore, the conversion rate offers a direct insight into the campaign’s success in achieving its primary objective.

 

As of 2023, the average conversion rate in Google Ads is 7.04%.

Business Category Avg. Click-Through Rate
Arts & Entertainment  13.41%
Animals & Pets  1.57%
Apparel / Fashion & Jewelry  3.03%
Attorneys & Legal Services 7.00%
Automotive — For Sale¬† 5.72%
Automotive — Repair, Service & Parts¬† 12.61%
Beauty & Personal Care  8.16% 
Business Services  4.94%
Career & Employment  3.11% 
Dentists & Dental Services  10.40%
Education & Instruction  7.07% 
Finance & Insurance  4.11%
Furniture  2.57%
Health & Fitness  8.40% 
Home & Home Improvement  10.22%
Industrial & Commercial  7.91%
Personal Services (Weddings, Cleaners, etc.)  8.70%
Physicians & Surgeons  13.12%
Real Estate  2.88%
Restaurants & Food 5.06% 
Shopping, Collectibles & Gifts (General) 3.69%
Sports & Recreation  5.69%
Travel  3.87%

 

The industries that had the lowest average conversion rates were Apparel, Fashion, and Jewelry (1.57%), Furniture (2.57%), and Real Estate (2.88%).

On the other hand, the industries with the highest average conversion rates were Animals and Pets (13.41%), Physicians and Surgeons (13.12%), and Automotive Repair, Service, and Parts (12.61%).

 

 

Average Conversion Rate: YoY

Let’s examine how conversion rates have changed year over year.

The average conversion rate experienced the most significant decline for the Arts and Entertainment category, with a decrease of 36.22%. Similarly, the Apparel, Fashion, and Jewelry industry decreased by 34.78%, while the Career and Employment sector experienced a decline of 32.04%.

In contrast, the Education and Instruction field saw the highest increase in conversion rate, rising by 18.86% year over year. The Beauty and Personal Care industry followed with a growth in conversion rate of 10.76%.

According to a Google Ads Specialist, it is not unexpected to see a decline in conversion rates, even when there is an increase in click-through rates (CTRs). Gabbert explained that advertisements are often displayed for informational purposes rather than commercial intent, leading to higher CTRs but lower conversion rates. For example, when multiple ads appear for low-intent queries like “marketing ideas,” the high CTRs can be attributed to the strategic ad placement. However, the conversion rates tend to lower as most audiences seek quick and easily accessible information.

This trend may be attributed to the increasing use of broad match as the primary match type in campaigns, reducing advertisers’ control over which queries their ads are displayed for. To address this challenge, many advertisers rely on their Search Terms Reports and negative keyword lists to manage lower-intent traffic effectively.

 

 

Tips to Enhance Your Conversion Rate:

If your conversion rates are below industry standards, various reasons may exist beyond them. Assuming that your other PPC metrics, such as average cost per click or click-through rate, are aligned with industry averages, checking if you’re drawing enough clicks with your PPC agency to boost the conversion rates is imperative.

Next, please take a closer look at your landing pages and ensure they have been optimized for mobile devices, complying with essential website guidelines for accessibility. If you have a PPC agency handling your advertising efforts, they can assist you with making any necessary updates. You can also test your conversion flow like a user and verify if the desired actions are explicit on the page and easy to complete. Finally, updating your landing page content with unique features and compelling call-to-action phrases may help improve your conversion rate.

After optimizing your landing pages, it’s essential to assess other aspects of your Google Ads plan, including the choice of keywords, ad copy, target audience, and working with a PPC (pay-per-click) agency. Failing to align these components could negatively impact your conversion rate, as it may interfere with users’ intent. Thus, ensuring all your ad elements work cohesively, with the help of a PPC agency, is advisable to maximize your advertising campaigns’ success.

Jyll Saskin Gales, a Google Ads expert and marketing coach, believes that a drop in the conversion rate isn’t alarming. Business owners should review their website analytics to find the most resilient channels and deploy retention marketing tactics.

 

 

The Average Cost Incurred Per Lead in Search Advertisements.

It’s a crucial metric that advertisers pay close attention to. It indicates the amount of money spent on advertising per conversion. It offers valuable knowledge of the performance and productivity of PPC campaigns.

In 2023, the average cost per lead in Google Ads is $53.52.

 

 

Search Advertising Benchmarks 2023

Business Category  Avg. Click-Through Rate
Arts & Entertainment  $23.57  
Animals & Pets   $72.24  
Apparel / Fashion & Jewelry   $76.71  
Attorneys & Legal Services  $111.05  
Automotive — For Sale¬† ¬†$42.52¬†¬†
Automotive — Repair, Service & Parts¬† ¬† $21.12¬†¬†
Beauty & Personal Care   $36.97  
Business Services   $87.36  
Career & Employment  $132.95  
Dentists & Dental Services  $65.37  
Education & Instruction   $62.80  
Finance & Insurance   $90.02 
Furniture   $108.85  
Health & Fitness   $51.42  
Home & Home Improvement   $66.02  
Industrial & Commercial   $59.74 
Personal Services (Weddings, Cleaners, etc.)  $40.85  
Physicians & Surgeons  $37.71  
Real Estate  $66.02  
Restaurants & Food $34.81  
Shopping, Collectibles & Gifts (General)  $31.50  
Sports & Recreation   $31.82  
Travel   $62.18 

 

The sectors that incurred the highest cost per lead were Career and Employment ($132.95), Attorneys and Legal Services ($111.05), and Furniture ($108.85).

On the other hand, the industries with the lowest cost per lead were Automotive Repair, Services, and Parts ($21.12), Animals and Pets ($23.57), and Shopping, Collectibles, and Gifts ($31.50).

 

 

Average Cost Per Lead: YoY

Although we are aware that the average cost per lead has increased for most industries this year, here’s how this trend compares to the previous year:

 

Search Advertising Benchmarks 2023

The industries that experienced the largest year-over-year increases in cost per lead were Career and Employment (up by 52.19%), Arts and Entertainment (up by 49.18%), and Real Estate (up by 46.22%).

This trend is not unexpected considering the current state of the economy. Mark Irvine, the Director of Paid Media at SearchLab, explains that the recent rise in interest rates is impacting digital campaigns across various industries. While interest rates are at their highest since 2008, the digital landscape in 2023 vastly differs from the last time advertisers dealt with high-interest rates. Major consumer purchases, such as real Estate, finance, and education, often involve loans and are significant decisions. As a result, consumers are investing more time in researching and comparing options within these industries.

On the other hand, the industries with the biggest year-over-year decreases in cost per lead were Auto Sales, which decreased by 8.62%, followed by Beauty and Personal Care, which saw a 3.90% decrease compared to the previous year.

 

To improve your cost per lead

If you want to reduce your cost per lead in Google Ads, consider your cost per click, as it directly affects the individual conversion cost. Additionally, your conversion tracking strategy plays a significant role in determining your cost per lead. Incorporating more user actions on your website can increase conversions and balance your lead costs.

However, remember that cost per lead isn’t the only metric to measure your search advertising campaigns’ effectiveness. A Google Ad Specialist suggests that the quality of leads is also important to consider. You might have a high cost per lead, but those leads could be valuable for your business, making them worthwhile investments.

 

 

Here are the implications of the search ads benchmarks and trends for your business

How you can utilize this data to take actionable steps for your account. Here are the main findings from our report:

 

1. Adapting budgets to remain competitive

In the past year, average costs per lead and clicks have risen across various industries, making it increasingly challenging to stretch a limited Google Ads budget. Advertisers must invest money to generate returns to keep pace with these rising costs. While increasing the marketing budget may only sometimes be feasible, there are strategies to work smarter, not more complicated when it comes to budgeting.

Flexibility in your budget can lead to success in cost per click and cost per lead. You can maintain competitiveness by being prepared to reallocate the campaign budget based on your specific needs and market trends. The key is to maximize the potential of effective campaigns for your business.

According to our Google Ad Specialist, highlighting the significance of accurate budgeting: “Regardless of having a website with high conversion rates, an optimized list of keywords, and captivating text ads, your campaign cannot achieve success without a fitting budget to compete in the auction. Allocating a budget is essential to obtain the necessary impressions for conversions, effectively bid on keywords, and sustain your efforts during peak periods.”

To ensure your budget strategy remains flexible, consider utilizing spend-tracking tools. For instance, the Google Ads budget report and the PPC Beast Marketing Dashboard (illustrated below) can provide valuable insights into how your budget is allocated across campaigns.

 

2. Evolving customer search journey

With the average conversion rate declining in 91% of industries, it is evident that the buyer’s journey is undergoing significant changes. Consumers are more mindful of economic factors like inflation, making them more cautious in purchasing decisions. This shift is likely the reason behind the decrease in conversion rates, even though click-through rates have generally increased year over year.

As the customer’s search behavior evolves, search advertisers must understand the real-world implications of their prospects’ search intent, even if the keywords have stayed the same in the past year. Advertisers must adapt and be prepared for longer conversion paths, extending well beyond the initial ad impression.

Moreover, in today’s digital landscape, customers can engage with businesses through multiple channels before purchasing. Search advertising plays a role in capturing the attention of potential customers at the top of the funnel, while other strategies guide them closer to conversion.¬†

Advertisers should explore how they can integrate their Google Ads strategy into all potential touchpoints.

According to Leiman, it’s crucial to incorporate search advertising into a cross-channel marketing strategy to achieve optimal results. Navah Hopkins, an expert in PPC, recommends customizing Google Ads based on buyer behavior by building out buyer personas and aligning campaigns to them. Hopkins advises using audience exclusions as audiences are now part of a broad match.

To ensure a comprehensive marketing strategy, creating creative content that caters to all funnel stages, including display and video ads, is essential, as only some prefer text-based content. Irvine offers additional strategies for targeting the right audience and refining ads for more likely to convert users. Advertisers can leverage a remarketing or custom-intent audience to improve the effectiveness of their search campaigns.

 

3. Boosting click-through rates with enhanced search ads

The surge in click-through rates across various industries reveals a growing tendency among individuals to engage with advertisements. This shift can be attributed to the adoption of innovative features in search campaigns, such as the default utilization of responsive search ads and the availability of additional ad assets. As a result, these improvements have significantly elevated the ads’ quality on the search engine results page (SERP).

Moreover, the seamless integration of ads into the organic results on Google’s latest interface has made them more appealing to users, increasing the likelihood of clicks. Search advertisers should prioritize crafting highly optimized ad copy and utilizing multiple ad assets to enhance their ads to stay competitive.

Saskin Gales also highlights the impact of new ad formats on click-through rates. The increase in engagement can be attributed to advertisers effectively serving engaging creative to relevant audiences, which has been facilitated by implementing automated solutions like Performance Max and dynamic search ads.

Currently, the only distinguishing factor between ads and organic results is the bold “sponsored” text. This lack of clear differentiation can mistakenly lead individuals who typically avoid ads to believe that the ad is a high-quality organic result. As a result, they may be more inclined to click on the ad, unaware that it is a paid placement.

 

4. The significance of tracking and reporting

The report emphasizes the critical role that tracking and reporting play in achieving overall success in Google Ads. It is essential to stay updated on benchmarks within your industry to gain insights into key trends. Additionally, benchmarking your progress enables an accurate evaluation of your business’s performance compared to competitors, especially when working with a PPC agency.

Scanlan also highlights the value of benchmark reports and your account’s performance and goals in making data-driven marketing decisions. By analyzing metrics, you can optimize your Google Ads Manager campaign and make changes that yield a return on investment (ROI). However, it’s crucial not to focus solely on metrics like pay-per-click, cost-per-click, and click-through rate to indicate success, as these metrics alone may not guarantee the desired ROI. Nevertheless, they serve as helpful guidelines during optimization processes.”

McHale’s top recommendation is to focus on structuring your account and campaigns based on your goals to improve PPC results. Prioritize the metrics closely aligned with your PPC advertising objectives and organize your ad account to maximize the performance of those specific metrics.

Scanlan also highlights the value of benchmark reports and your account’s performance and goals in making data-driven marketing decisions. By analyzing metrics, you can optimize your Google Ads Manager campaign and make changes that yield a return on investment (ROI). However, it’s crucial not to focus solely on metrics to indicate success, as a good cost-per-click and click-through rate alone may not guarantee the desired ROI. Nevertheless, these metrics serve as helpful guidelines during optimization processes.

Colarossi echoes this sentiment, emphasizing the significance of essential metrics such as cost per click, click-through rate, conversion rate, and cost per lead in digital marketing and online marketing. These metrics enable you to assess the effectiveness of your ad campaigns, particularly when working with a PPC agency. By monitoring and tracking these metrics, you can identify which ads generate the most clicks, leads, and conversions. This information allows you to adjust and optimize your strategies to enhance performance. Through continuous monitoring and optimization based on these metrics, you can improve the efficiency and ROI of your campaigns, effectively achieving your business goals.

 

 

Leverage the Benefits of Microsoft and Google Ads Search Advertising Benchmarks

While these benchmarks serve as a valuable starting point when revamping your strategy, it’s important to recognize that there is no one-size-fits-all approach to promoting your business on Google or Microsoft. Each advertiser’s account is unique and will differ from others.
However, benchmarks like these can act as guiding indicators to maximize your search advertising return on investment (ROI). If the data from this report has prompted you to consider giving your account some attention, it’s completely normal. Improvement is always possible in marketing. By implementing our best practices and recommendations outlined here, you can unlock the hidden potential of your campaigns. Furthermore, if you need help with a specific metric or optimization hurdle, remember that our digital marketing solutions provided by PPC Beast are always available to assist you in making the most out of your search advertising efforts!

 

About the Data

This report is based on 17,253 US-based search advertising campaigns active between April 1, 2022, and March 31, 2023. Each industry category includes a minimum of 89 unique PPC Beast campaigns. The reported averages are technically median figures to account for any outliers.

 

 

Dominate Your PPC Advertising with PPC Beast – Your Trusted PPC Agency

Are you seeking to elevate your digital advertising and increase your click-through rate? Look no further than PPC Beast, the top online marketing and PPC agency available today. Connect with our Google Ads specialists to schedule a consultation. Together, we can leverage your marketing strategy and the power of Google Ads Manager to reach your desired outcomes. Let us help you turn your entrepreneurial ambitions into actualizations!

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