Q4 SEM/PPC Benchmarks

Feb 13, 2025 | By Sarah Simmerman

I'm thrilled to introduce a new blog series for 2025! To complement our popular Quarterly Online Sales Benchmarks, we're excited to unveil a brand-new series: Quarterly SEM/PPC Benchmarks!

Leveraging data from our partnerships with over 90 home builders nationwide, we've meticulously aggregated and weighted these benchmarks by click volume to provide you with the most accurate industry insights.

Before we jump into the data, it’s important to understand how these metrics work with each other and can be influenced by outside factors. I have provided ranges instead of a concrete number for each metric below. Your market and your product greatly influence metrics such as CPC & CTR. A builder with communities in a highly competitive market, like Austin, can expect to have considerably higher CPC than a builder in a smaller market with less builder competition. The same goes for CTR; if your homes are within the higher pricepoint for your market, you can expect to have a lower click-through rate from your ads in most instances.

A balance must be struck between maximizing efficiency on paid platforms and achieving the builder's overarching business objectives. While efficiency is crucial, there will be instances where a more aggressive approach is necessary to meet sales targets. Ultimately, fulfilling the sales plan remains the priority.

Let's explore these benchmarks, analyze the data, and see what the next quarter might bring.

The average CPC (cost per click) is about 9% higher than we experienced in the previous quarter. Why? Mainly seasonality and an increase in competition for the best search terms. Toward the end of the year, we see a perfect storm of fewer people actively searching for new homes online and builders willing to be a bit more aggressive in terms of bids to meet their year-end sales goals. Looking back at the whole year, we saw a 16% average increase in CPC overall compared to 2023. I think we can all agree that it was more difficult to fill the funnel in 2024 than in previous years.

I anticipate Q1 will see a lower CPC as people restart their home search after the holidays. More opportunities to serve ads will reduce competition and, in turn, reduce the amount you have to pay for each click. Historically, we have seen between a 5-10% decrease in CPC between December and January.

The CPC range is fairly large and is predominantly dictated by the market. If you are in a highly competitive market, you should expect to be at the higher end of that range. A smaller market with little competition will have a much lower CPC, although you will still notice seasonal and market fluctuations.

With Google Ads, you can choose more aggressive bids or automated bidding strategies that will maximize results but will also impact your overall CPC.

Click-through rates have remained relatively stable in most markets, with Q4 being about 2% lower than the previous quarter. Year over year, we have seen a larger decrease. The fourth quarter of 2023 had a higher average CTR by about 15%. This decrease happened fairly slowly throughout the year.

After analyzing a number of accounts, this shift seems to be mainly market driven. While CTR is decreasing, we are seeing increases in impression share. With fewer people in the market actively searching for a home, builders have started to bid on more broad terms. These generally cost a bit less per click, but the ads may not be relevant to the same percentage of people being served ads for more specific terms, meaning you have less chance to get them to click. As long as the people who click are “quality traffic,” I do not have a problem with this trade-off as long as you are using a bidding strategy that only charges you when someone does click.

If you are seeing a larger decrease in CTR or are below 5% across the majority of campaigns, I suggest auditing and making improvements to your ad copy and keyword strategy. A disconnect between search terms and ad copy or a broad keyword strategy can cause lower click-through rates. I would also take an honest look at your product and pricing with a competitive analysis. If you are priced higher than your competition, you will likely experience lower click-through rates.

The range in CTR, like CPC, is very broad, affected by pricing, location, the market, and your ad copy. Find your average and use that number to monitor performance and changes throughout the year.

CTR does not generally fluctuate dramatically at the beginning of the year. I expect to see CTR increase as search volume for more specific terms picks back up, allowing builders to place more focus on highly targeted keywords.

We saw an average 5% increase in CPC for display ads, mainly due to builders choosing to launch additional display campaigns as part of their strategy. We have seen more and more builders introduce or expand display in their marketing strategy to capture more top-of-the-funnel awareness. Established campaigns have remained relatively steady, with low CPCs.

The Click-through Rates on display ads vary wildly, and overall, the increase was roughly 30% compared to the previous quarter. So, let’s look at some of the types of ads that have the highest CTRs:

Regional Remarketing Ads (or community level, for larger master-plans)
Promotion or Incentive Remarketing Ads
Display Ads Promoting Individual Inventory Homes

In most cases, remarketing ads win in terms of CTR. Most obviously because they have already shown an interest in your homes. I do want to call special attention to number two. Q4 inevitably brings with it numerous end-of-year promotions; display ads featuring these ads perform much more efficiently to a remarketing audience. Buying a home is definitely a purchase made with the heart, so introducing your builder to a new audience with numbers is not generally an effective use of your budget.

As anticipated, Meta campaigns experienced an average CPC increase of 15% quarter over quarter. We always expect this as we head into the holiday shopping season. Unlike Google, we compete for eyeballs against all advertisers, not just home builders. This inevitably causes a spike in CPC over Black Friday, as shown in the screenshot below.

We are already seeing CPC levels fall back to their pre-holiday levels, so I anticipate a decrease between 5-18% in January and the coming months.

The holidays are a busy time for everyone, and many people will hold off on their home purchase decision unless they are already lower in your sales funnel. It is not a surprise that we saw CTR slowly decline since Thanksgiving since Meta ads are primarily a top-of-the-funnel strategy. Prior to Thanksgiving, CTR was stable compared to previous months, and we have started to see these numbers return to normal since the start of the New Year.

I hope these insights empower you to refine your digital marketing strategy for Q1 and beyond. Remember to regularly analyze your campaign performance and stay updated on the latest industry trends to ensure your efforts remain effective and impactful. I'll be back next quarter with fresh data and insights to help you further optimize your digital marketing campaigns.