A concern on the minds of advertisers, agencies, & businesses alike is the trend of rising CPCs. Despite our best efforts to drive efficient costs & maximize results in paid advertising, we are often subject to high Costs Per Click.
We must consider several culprits in our strategy to maximize our clients’ results and mitigate rising costs on Google Ads.
What Impacts CPCs?
Quality Score:
Quality Score is a vital metric directly impacting how much each click costs. This diagnostic tool from Google aims to quantify every keyword in the account on a scale of 1-10 (1 being poor, 10 being excellent), based on 3 key components:
- Expected Click-Through Rate: How likely will your ad be clicked on when shown?
- Ad Relevance: Is your ad relevant to the intent of a user’s search?
- Landing Page Experience: Is your landing page useful & relevant once a user clicks on your ad?
With these 3 factors combined, Google will set a score of 1-10 for each of your keywords. While Quality Score is not a KPI metric, it is aggregated based on historical data & context & is an indicator of room for improvement.
*A Quality Score of 5 or lower can lead to a 400% increase in CPC!
Competition:
As advertisers, we ensure that our accounts are set up to maximize quality scores across all keywords, show ads for the right users & take them to the right landing pages to mitigate rising CPC. However, bidding competition directly impacts CPC for all businesses.
When bidding on non-branded keywords such as “denver advertising agency” in Booyah’s case, we are fighting for ad serving against other agencies in our area. Google will automatically set our CPC bid at each ad serving, & depending on the amount of demand for these keywords combined with the level of investment from Booyah & our competitors, CPCs can skyrocket.
While branded keywords such as “booyah advertising denver” are typically cheaper, as users show intent & familiarity with our brand, it is not uncommon for advertisers to bid directly on competitor keywords or match to them via broader keyword match types.
Bid Strategy:
Within Google Ads, it is a tried & true best practice to leverage a Smart Bidding strategy across all campaign types. This will better guide Google to prioritize your main business goals when bidding on searches.
While we highly recommend setting the right bid strategy for a client’s goals, this can increase CPC as well.
For example, many of our clients’ bottom-line goal is to maximize their revenue volume. In this case, we leverage a ‘Maximize Conversion Value” bid strategy, telling Google to prioritize searches likely to yield a purchase & revenue. While this strategy will maximize revenue, as its name suggests, it will deprioritize CPC efficiency if the signals behind the user’s search are likely to yield a purchase.
Inversely, while a ‘Maximize Clicks’ bid strategy will help guide Google’s algorithm to gain as many clicks as possible & preserve CPC efficiency, this will likely drive lower revenue volume.
My Google Ads cost went up; what can I do?
Choose the Right Keywords
Knowing how competitive the search landscape can be, it is crucial to make sure you are bidding on the right keywords to maximize your bidding power. At Booyah, we are regularly reviewing performance & making pauses at the keyword level to identify bad apples with high CPC, low Quality Score, & inefficient results. This ensures that our client’s budget is spent on our best-performing keywords to achieve their KPIs and keep costs efficient.
Additionally, keyword negation is just as important. Even if your keyword pool is streamlined, Google’s phrase & broad match keywords can match your ads to queries for irrelevant topics, products, and locations. We regularly audit our search terms & add negative keywords to prevent bidding on irrelevancy.
Improve Your Ad Experience
A robust keyword pool is only half of the battle. Your Search ads must be driving to a landing page that is relevant to the search & offers a streamlined path to purchase/conversion. We work with our clients to determine the best landing pages on their site to drive each of our campaigns to, as well as provide insight to make the path to conversion more seamless.
Outside of your ad landing page, advertisers can leverage extensions like sitelinks, callouts, & images to guide users to other important & exploratory pages, as well as improve the visual experience of the ad.
Lean Into Automation
Once your keyword pool & ad experience are up to par, Google offers several automated tools to find relevant users to keep CPCs down & supercharge your results. Google has continued to evolve into a more automated landscape, & while this sometimes goes against the hyper-controlled environment search advertisers live & breathe in, Booyah has tested these machine-learning tools & seen impressive results.
Use Broad Match Keywords
Broad match keywords go beyond our traditional phrase & exact match keywords to identify relevant queries outside of the phrase included. For example, a broad match keyword for ‘denver advertising agency’ will match for ‘denver paid search experts’, while phrase & exact match will likely miss this query.
Broad match has helped our campaigns capture relevant traffic outside of our standard keyword pool, & with it has brought better KPIs & lower CPCs than our phrase match keywords.
Leverage Performance Max
Performance Max campaigns, by their namesake, leverage all the tools in Google’s utility belt, dynamically serving ads on all Google channels (Search, YouTube, Display, Discover, Gmail, & Maps), pairing strong creative & messaging with Google’s machine learning to serve ads to users across the funnel in their journey.
Google’s Power Pair, Search & PMAX, is the foundation for most of the accounts we manage at Booyah. According to Google, advertisers who leverage both campaign types together may see an average of 27% more conversions at a similar CPA/ROAS than solely leveraging Search campaigns. Not only can PMAX boost your results, but PMAX sees much lower CPCs than Search campaigns. As PMAX ads hit users across the funnel, we see much more efficient reach across the multiple platforms PMAX offers.
How Do I Reduce My CPC on Google Ads?
We’re glad you asked!
While Search offers some of the most precise user intent on Booyah’s menu of advertising platforms, reach is often expensive, especially as we see competitive headwind. To keep CPCs efficient & maximize results, it’s integral as advertisers that we are leveraging all the tools in our arsenal.
At Booyah, we understand what causes rising CPC, regularly monitor our keyword performance, and set up our accounts optimally with the best of Google’s product catalog to maximize our results while keeping CPCs efficient. Reach out to our experts to continue learning about reducing your CPCs.
