Digital Advertising Benchmarks All Agrimarketers Should Know in 2022
W Whether you are a PPC (pay-per-click) novice or a seasoned digital marketing veteran, it can be difficult to determine how well your digital advertisements are performing. This is especially true for advertisers in the agriculture industry. For many years, simply having a digital presence was enough for many ag companies. However, as we see more digital adoption throughout the industry (and thus, more online competition and sophistication), it’s increasingly important to establish a baseline by which ag brands can measure the success of their digital marketing initiatives.
So, we set out to develop benchmark performance metrics for the agriculture industry.
To do so, we analyzed over 1700 campaigns that ran over the last four years and dug deep into digital ad performance data to understand how our clients (and others in ag) stack up. These campaigns targeted farmers in North America for a variety of brands and products, including seed, crop protection, fertilizer, machinery and finance.
We gathered data from the Google Ads platform (which includes Google Search, Google Video and Google Display), the Facebook Ads platform (which includes Facebook and Instagram), the Twitter Ads platform, as well as direct-to-publisher placements (advertising directly on popular ag publications).
Average Clickthrough Rates for the Agriculture Industry
The average clickthrough rate for digital ads in the agriculture industry is 2.45% for search, 0.69% for display, and 0.89% for social advertising.
These search rates are lower than those reported from other industries, while the display rates are significantly higher (other industries see a CTR of 3.17% for search and 0.46% for display as per benchmark rates reported by WordStream; social advertising was not included in their report).
Search advertising tends to have a much higher clickthrough rate because search users exhibit high intent. With search advertising, we can target individuals who are actively researching a particular brand, product, problem or opportunity. These users are looking for solutions and are thus much more likely to click on ads delivered in this context.
Video advertising (especially on the Google video/YouTube platform) tends to have a much lower clickthrough rate. This is due to the nature of how users interact on a platform like YouTube: because users expect to have information delivered to them within the platform itself, they tend to elicit fewer clicks to off-site sources.
Direct-to-publisher ads saw much lower performance in our analysis. This is at least partially due to the nature of the platform: with direct-to-publisher, we don’t benefit from the sophisticated algorithms and machine-learning that allows other popular advertising platforms (e.g. Facebook, Twitter, etc.) to find and target an audience that is more likely to click on an ad.
This is magnified further when we split up performance based on objective. With programmatic advertising (such as Google Ads and social advertising), you set campaign objectives and the ad network delivers your ads to users that are more likely to take the desired action. Direct-to-publisher advertising will almost always be awareness based, because an advertiser is simply purchasing a block of impressions and not able to optimize based on a desired action.
Traffic-based objectives deliver a higher-than-average clickthrough rate. This ought to be the case, as we rely on algorithms provided by objective-based programmatic advertising. This data demonstrates the ability of these algorithms to deliver the desired outcomes.
Average Cost Per Click for the Agriculture Industry
Cost per click is the average price that an advertiser pays to drive a single click on a digital advertisement. This measures how efficiently an ad or campaign can deliver clicks.
The average cost per click for digital ads in the agriculture industry is $2.49 for search, $0.30 for display and $0.65 for social advertising.
Again, the agriculture industry outperforms all other industries when it comes to cost per click on search and display. The benchmark rates reported by WordStream are $2.69 for search and $0.63 for display.
The reason that ag is able to more efficiently drive clicks is likely due to competition: because there is less competition for clicks and impressions, it costs less to deliver clicks to farmers in North America. As we see more agriculture companies increasing their digital marketing presence, we should expect the CPC to rise accordingly.
In the chart above, you’ll notice the average CPC for direct-to-publisher campaigns is over three times higher than for other platforms. With direct to publisher advertising, an advertiser purchases a block of potentially qualified impressions, however, there is no way of focusing on users who are more likely to click on our ads and visit a website. When contrasted with programmatic advertising options, which allow us to use platforms that can optimize advertising performance based on the desired outcomes, direct to publishers offers a less efficient use of marketing dollars, especially when our objective is to drive traffic to a website.
Average Cost Per Mille for the Agriculture Industry
Cost Per Mille (CPM) is the average cost to deliver 1,000 impressions. This is a measure of how efficient an ad or campaign is at delivering impressions. Most direct-to-publishers advertising is charged on a CPM basis, meaning that an advertiser purchases impressions in blocks of 1,000.
CPM allows us to measure the efficiency of awareness-based campaigns.
The average CPM for the agriculture industry is $2.09 for display, $5.78 for social and $24.45 for direct to publisher (we don’t typically report on CPM for search campaigns, as they are always focused on clicks or conversions).
Direct to publisher has a higher CPM because these are considered “premium” inventory. Because the placement and inventory are being direct purchased, it is much more controlled. When it comes to programmatic advertising and social advertising, there is less control of the context in which the advertisement is seen.
Next Steps: Measuring Campaign Performance
This analysis provides a surface-level overview of digital ad performance metrics for the North American agriculture industry. Feel free to use these benchmarks to measure the performance of your digital marketing campaigns, but remember: there’s a lot of nuance within this data, so it’s important to consider your specific goals and objectives when planning, optimizing and reporting on your digital marketing campaigns.
If you have questions about this data and would like to discuss your digital campaigns, feel free to book time with me directly in my calendar.
Eric Postma is the VP Digital at Think Shift. He oversees the digital marketing initiatives for all of Think Shift’s clients. In his spare time, Eric teaches Digital Marketing at the Asper School of Business at the University of Manitoba.
This report is based on a sample of advertising accounts and over 2,000 campaigns that targeted farmers in North America (representing more than $3 million in aggregate spend) between July 2017 and June 2021.