As paid search specialists, one of the main challenges we have continued to face is the issue of rising costs of clicks. Despite customers investing at the same rate, if not more, year over year we continue to see that driving the same rates of revenue and conversions is becoming more difficult. This, in turn, is morphing paid search campaigns from a reliable contributor toward online channel performance to an often expensive tactic.
The phenomenon behind these struggles has been due to the rise in paid search campaigns’ average cost-per-click (CPC) values. This is making a user’s journey to a website more expensive for the advertiser.
While this is a trend being felt throughout the industry, don’t be discouraged. There are steps you can take to improve your CPCs! Before diving into ways we can combat rising CPC values we must first ask ourselves why average CPCs might be rising to begin with.
Reasons for rising CPCs
- Increased competition: Increasing competition is a significant reason why average CPC values have been rising. With more businesses trying to acquire their respective industry’s supply and demand needs, companies are seeing that it is becoming more expensive to acquire higher ad placements that might have been cheaper during this same time last year and in years prior.
- Issues with ad copy: Having subpar ad copy on your campaigns is a direct contributor behind increasing average CPC values. Continuing to use poor ad copy is a self-inflicted wound, because Google’s algorithm is recognizing your ad does not deliver the same quality of landing page experience for the user compared to your competitors and thus your ad is seeing lower clickthrough rates, lower ad rank, lower quality scores, and increases in average CPC to maintain the rank it has left.
- Redefined customer expectations: As the landscape of paid search’s contribution toward holistic online channel improvements has grown over the years, so have the customer expectations of your ad as well as landing page experience. Making sure your landing pages are in-line with what your advertisement is highlighting and that the landing page experience for the user is excellent is crucial, as it directly correlates with the quality score of your ad. Improving the quality of your landing page content also helps with SEO so not only will your ads perform better, but you can improve organic search as well.
Now that we understand why our average CPCs might be rising, here are some recommendations for how we can overcome this industry-wide issue.
Search marketing tips for lowering CPCs
- Using max CPC bid caps on paid search campaigns: Using max CPC bid caps on paid search campaigns is one of the most effective ways to lower average CPC figures and eliminate inefficient campaign spending. Placing a max CPC bid cap on campaigns using a manual bid strategy is important because it allows for us to have better regulation on the campaign’s spending and helps remove one-off search terms that could be spiking average CPC and spend figures without providing anything in return. Similar tactics can also be done on campaigns currently set to an automated smart bidding strategy by using a portfolio bid strategy, which allows the user to place a max CPC bid cap on the campaign while continuing to benefit from the algorithms used within the smart bidding strategy, giving us more leverage over the bid strategy’s reach.
- Improving quality score: Improving the quality score of your ad is one of the easiest solutions toward improving ad rank and lowering average CPC values. Some methods to improve this metric include aligning your ad copy with the keywords your campaign is targeting and making sure the headlines and descriptions you use in your ad copy aligns with the headlines and descriptions on the landing page itself.
- Keyword expansion: Expanding the keywords you are using by including different match types and utilizing more long-tailed keywords are two methods that can not only help reduce overall average CPC values but improve the amount of relevant traffic the landing page is receiving. If you are currently incorporating different match types and long-tailed keywords within your campaign and continue to face a rise in average CPC value, breaking out your campaign by match type is a tactic that could help your campaign turnaround.
With these tactics, you can stand out amongst the crowd and conquer the challenge that most paid search specialists are still trying to wrap their heads around. Take action today and say goodbye to inefficient campaign spending!