When you look back at your Cost per Click (CPC) figures over the past 12 months, how do they appear? It’s likely they have risen unless you’ve only focused on mobile devices or very niche or declining industries.
If you’re a retail or seasonal business you’ll likely be seeing a seasonal increase in CPCs as everyone competes for the ad space in the Google results or indeed any other platform. This is normal, but looking back over each month of the year you likely see a steady increase. So how do we combat it? Let’s find out.
There have been times this year when I’ve seen some pretty dramatic short term increases for a few weeks. Whilst this was just limited to a small number of accounts, I wanted to know more – what’s the cause for the rise in CPCs?
There are a number of factors that can contribute to the rise. There are many that believe that Google manually inflate prices to grow revenues, which of course they would never admit to; and in any case, if they did, then they could charge whatever they wish as it’s their audience and platform.
Here are few more realistic causes for rising CPCs:
- Increased competition – AdWords is a bidding platform, if your competitors are bidding more, you’ll pay more if your default bid is high.
- New competitors – Likewise, more businesses entering your market and starting to bid on keywords you’ve already been targeting will cause bids to increase.
- Ad Text Changes – Changes to ad text could make your ads less relevant and therefore cost more to get a good position.
- Webpage Changes – Has your landing page content or website code and hosting changed? This can affect Quality Score.
Let’s look at some changes you can immediately action to help combat rising click costs in your Google AdWords campaigns.
Limiting Bids
If you regularly notice that your ads lack in traffic, then it’s likely you’ll have your bids too low. However many people set their bids much higher to compensate for the risk of not showing high enough.
Although you’ll only pay just over the price of the competitor’s bid that is showing below you, if you’ve set your maximum CPC bid to a higher amount, this could potentially spend more because your competitors may increase theirs substantially.
Controlling bids more carefully can help maintain your traffic whilst maintaining CPC. To do this I recommend reviewing the actual CPC alongside your average advert position for each keyword. You could start by comparing time frames from this year to last to identify the keywords that have seen the biggest changes in CPC and position.
If your keyword has been appearing in positions 1.0-1.5 then it’s relatively safe to lower your max CPCs to around what the actual CPC has been. This will prevent any unexpected increases in CPC and maintain traffic.
Keyword Matching
Having mainly short, broad match keyword targeting in your campaigns means your targeting is less precise than if you were using phrase or exact match keyword targeting.
Broad match keywords can trigger your adverts for searches you may not want to show for. These keywords could cost more than you’d pay for a relevant match if your bids are set quite high. Therefore you’ll be paying over the odds to appear for a keyword that perhaps isn’t relevant to your product or service. Try to use exact and phrase match keywords targeting more regularly and use broad match modifier if you need to target more variations without being matched to too many possibly unrelated broad match search queries.
Continuity Of Keywords & Ad Text
Relevance is key to having good performing CTR. Change Ad Text to match the exact keyword phrases you are targeting, if possible. This can improve your CTR which ultimately rewards your account with lower CPCs.
To have more relevant ad text you should use an Ad Group for each variation of your target keywords. Even having slight differences in keyword and ad text wording can affect the CTR significantly.
Landing Page Quality
Ensuring your landing page content is as best it can be with highly relevant bodies of text that describe the product or service in detail will help reduce the amount your pay clicks.
But it’s not just about improving your landing page content, technical factors are now more than important than ever before. With Google’s focus on site speed and usability, applying these principles to your PPC landing pages is really important and will also affect your Quality Score. Improving your landing page load times can help your advert appear higher up for no extra cost due to the increase in Quality Score.
Overall Account Quality
A better account wide CTR helps bring down the cost for each click. This is because your account is seen as more relevant overall. So when you’re performing general optimisation on your account, don’t only focus on certain campaigns. Aim to improve CTR across all of your campaigns, this way you’ll get more traffic for likely the same cost.
One tip to help boost overall CTR is to bid on your brand name. These usually generate high CTR for very little cost.
Auction Insights Report
If you’ve made changes to your targeting and aren’t starting to see the reduction in CPC, or an increase in CTR for the same CPC, then there’s a report in Google AdWords you can use to help identify who else you are advertising alongside for the same keywords.
Using the Auction Insights Report, you’ll be able to identify the URLs of other advertisers and compare where they appear and how often they appear above you and so on.
From here you can then do some research into how their ad text appears and what their landing page is like. You could also run some webpage speed tests and see how they compare to your webpage load times.
The goal is to make sure your targeting, relevancy and landing page quality is better than your competitors. Then you’ll have a much better chance of paying less per click to appear higher than them in the search ads.
Summary
It’s unlikely CPCs will ever decrease, so it’s important to take action on reducing your CPCs otherwise you’ll be making losses quickly and have to stop utilising this highly flexible and growing online marketing channel. In many cases it’s a process of testing various bids and seeing how it affects your ad position, CTR and quality of traffic. I wouldn’t rely on Google Keyword Planner’s bid recommendations that much, stay on top of bids and take advantage of AdWords automated bid rules if needed.
For more information on AdWords PPC, don’t hesitate to get in touch, today.
Image Credit by BigStock Images.
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Really great article. The costs in Adwords are getting wild and in my point of view the Adwords campaigns have to be more targeted oriented to leads. Of course it depends on the client but still with this CPC increase of costs must be really analyze.
The other problem is the lack of competition in this space….the only real alternative is Facebook with its own limitacions…..I wonder what will happen in the next years in this space
Thanks for the article!
I agree with your summary that it is unlikely CPCs will ever decrease due to inflation in every industry whether it is search engine marketing or gasoline. However, it was very helpful listing all of the items that you can do in order to help decrease cost per clicks. This could be a great check list for those reviewing campaigns and looking to really hone in on making changes in order to have little wins here and there that lead to major success in a campaign. Great post Dean.
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