Google Ads has begun showing advertisers how their ad spending and performance compare with businesses the platform considers similar to theirs.

The new feature is a Spend Benchmarks report that appears in the Google Ads account Overview. It compares an advertiser's weekly spending and clicks with those of its peer group.

One account, for example, was shown spending €284 per week against €268 among its peers. The same account generated 912 clicks, versus 765 for the peer benchmark.

Google says the peer comparison factors in criteria including the advertiser's industry and where it advertises.

Context for budget decisions

Advertisers have long had visibility into their own budgets and results. Benchmarking against comparable businesses adds a new layer of context, indicating whether an account is spending and generating traffic above or below its peers.

But "similar" businesses are not necessarily comparable businesses. Two advertisers operating in the same industry and market can have significantly different margins, average order values, conversion rates, customer lifetime values and growth strategies.

There is also a commercial catch. The benchmark can arrive alongside recommendations to increase spending to generate more results. That framing can make a peer-spending comparison feel like a target rather than a neutral point of reference.

Underinvesting or overspending?

Spending less than comparable advertisers does not necessarily mean an account is underinvesting, just as spending more does not necessarily mean it is overspending. The economics of the individual business still determine whether additional ad spend makes sense.

The Spend Benchmarks report could give advertisers a useful reference point for understanding the competitive environment around their accounts. Peer spending is best treated as context, while profitability, incremental returns and business objectives determine whether there is actually room to increase the budget.

The update was first spotted by paid search expert Thomas Eccel, who shared the new feature on LinkedIn.

Source: Search Engine Land (https://searchengineland.com/google-ads-is-showing-advertisers-how-their-spending-compares-with-peers-488937) / Source: linkedin.com (https://www.linkedin.com/posts/thomaseccel_ppc-googleads-activity-7505513279964839936-JUQf/)