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Analytics | Jul 9
Dann Albright on September 11, 2018 • 14 minute read
While results will certainly vary depending on the ad, the product, industry, etc., 31% of marketers tell Databox that their average cost-per-click on AdWords is between $1-$2.
Other notable findings were the 24% that reported an average CPC under $1 (good on you!) and conversely, the 19% that reported a CPC of over $5.
Depending on what you’re promoting, those reported numbers will either sound really cheap, or fairly expensive. (We’re lookin’ at you, $5 CPC’ers.)
Like anything else worth reporting, the qualitative reasoning behind the responses is where the real treasure lies.
There are so many factors to consider when determining the success of your paid ads strategy. (And at least as many that go into analyzing your campaigns.)
It’s easy to lose sight of the importance of foundational AdWords metrics like CPC in the midst of clicks, likes, comments, shares, etc.
But ultimately your CPC will determine the overall success of your efforts. The lower your CPC, the lower your cost-per-acquisition (CPA), which is the ultimate goal.
So, how can marketers go about improving their CPC? We asked dozens of paid marketers to share their thoughts on experience on the things that work best.
Here’s what we learned.
*Editor’s note: Want an easier way to track your CPC? Grab this free template and analyze your campaigns, ad groups, keywords, and engagement metrics to improve your overall ROI.
Google assigns a quality score to every advertisement. That score is multiplied by your bid to find your rank in the ad auction. The higher your quality score, the higher they’ll place your ad.
Want to see the quality score of your ads? Wes Marsh, director of digital marketing at Solodev, outlines the process:
“[N]avigate to the Keywords Tab on a single ad group for one your Search Campaigns. . . . [T]hen modify columns and add the option for Quality Score. I also recommend selecting the Ad Relevance, Expected CTR, and Landing Page Experience to get a better understanding of how these impact your quality score.”
That’s a lot of information. But it’s crucial for lowering your CPC.
“If your quality score is high, you can afford to lower your bid,” says Jason Scott, digital marketing specialist at Archway Cards.
Scott also points out that if your quality score is high, you can outrank competitors with higher bids. So it’s definitely worth taking the time to address.
Taikun founder Collin Slattery enumerates the three factors of quality score: ad relevance, landing page experience, and ad click-through rate (CTR).
Ad relevance, Slattery says, is determined by how closely related the information in your ad is to the search term.
“Raising the ad relevance score is easiest,” said Slattery. “Low ad relevance means the information in the ad isn’t closely related to the search terms you’re looking to target. Rewrite them to be more relevant and keep your ad groups tight with a limited number of closely related keywords.”
Also, your landing page needs to contain relevant and contextual information related to the search term.
“The information on your landing page should be closely related to the query and provide relevant and contextual information,” said Slattery. “If someone is searching for “wholesale coffee” and you’re a coffee roaster, you don’t want to send them to the homepage because that’s not relevant. You want to send them to your wholesale coffee page. Also, make sure the page loads quickly and is using HTTPS.”
Wes Marsh also gave some great advice on improving each aspect of your quality score:
You can also address your quality score on an ad group level, says Tony Capetola, marketing manager at Sales & Orders:
“Campaigns or ad groups should be configured thematically based on the keywords you are targeting. Think about grouping like keyword variants together and creating 3–4 ads per ad group that are more specific to your keyword variants.”
Landing page quality is part of your quality score. And we had several marketers tell us that those pages are a good place to focus.
Moises Cardenas, digital strategist at Mountaineer Technology Consultants, suggests creating landing pages focused on a single keyword. When he does so, “my CPC is generally less than when I target that keyword to a page on my website that features that keyword and 50 others.”
Cardenas says this increases the relevance score of the ad and lowers the CPC.
“I don’t think nearly enough people focus on the landing page and website experience that comes with driving traffic to your paid pages,” says Trinity Insight founder Craig Smith.
“Over the past few years, a lot of industry experts (even Larry Kim) have been downplaying the value a Quality Score plays on keyword CPCs,” said Smith. “Having a high Quality Score is nice, but it’s not really something that most advertisers can change overnight. It’s not something you can adjust in your settings or change your algorithm to account for, which frustrates advertisers who are used to instant gratification in the paid search world. However, a high QS shows just how positive the overall experience is for the customer.”
Smith recommends maintaining alignment between your paid search teams and web development, design, and SEO teams.
“We’ve worked with companies where the paid search team offices were located on the opposite side of the building from the SEO, web design, and development teams,” said Smith. “Your best bet to lower CPCs is to work with your design team. Show up to their meetings. Request landing pages. If your website has something valuable to offer once people click, Google will reward you for it.”
Smith added: “A client recently redid their website and their quality scores increase significantly (along with metrics like bounce rate, time on site, and average pages viewed). Audiences stayed on the pages because they were easy to navigate and had valuable content. Meanwhile, their average CPCs dropped significantly as more people saw the new website.”
Bulldog Digital Media‘s head of strategy Lee Dobson recommends two things for high-quality landing pages:
If you can ensure both of those on your landing pages, your ads will not only work better but get higher quality scores. And that results in lower CPCs.
In the end, it comes down to thinking about the user, says Tim Jones, founding partner of Eternal Works. “How would they feel if the ad they click on is very different from the page they land on?”
So a high quality score will raise your ad ranking without requiring a higher CPC. But you can also take advantage of a high score to lower your bid, says Blake Aylott, digital strategist at RideYellow.
“The bids that Google suggests are always inflated, so lowering your bids slowly over time” will decrease your CPC, he says. Aylott suggests that you “maintain a high quality score and lower your bid for that keyword by 10 cents every week.”
Your keywords play a big role in how well your ads work and how much you pay for them. By targeting a search with less volume, you’ll get a lower CPC.
That’s where long-tail keywords come in.
These keywords are often correlated with higher purchase intent. “The top one- or two-word keywords are always going to be more expensive than a six-word search, but the six-word searcher has an idea of what they want,” says Bryan Pattman, junior SEO analyst at 9Sail.
Your Doctors Online VP of marketing Stephen Seifert also focuses on quality leads. “[Targeting long-tail keywords] allows us to sidestep the high-cost primary keywords and attract better, more qualified users to our website.”
Here’s a great example from Marina Dolcic, an analyst at Morningscore:
“[A] person searching for ‘cupcake’ might be looking for anything—images, recipes, decorating ideas, etc. But someone looking for ‘cupcake bakery in Chicago downtown’ is in a completely different stage of the buying process.”
It’s important to remember that Google is making a lot of money from these keywords, says Evo Strategies‘ digital marketing strategist Athena Bond.
“Typically, the prices indicated by AdWords Keyword Planner is for common 2– 3-word keywords,” she says. “The best keyword is actually a phrase, not a single word. AdWords profits by only showing you short keywords because they’re more common and usually cost more.”
Bond also gave us some great advice on creating long-tail keywords:
Even though these keywords are less common than shorter alternatives, they’ll get you better results. These are the kinds of searches that people who need information use. And if you can give it to them, they’ll click on your ad.
Cardinal Digital Marketing CEO Alex Membrillo made a very interesting point about long-tail keywords: that the increase of voice search is making them even more important.
“With the increases in voice search results, long tail keywords are beginning to have even more relevance, especially for mobile Adwords campaigns,” said Membrillo.
Definitely something worth keeping in mind.
(If you’re not sure how to find the best keywords for your PPC ads, check Ahrefs, says Alan Santillan, community outreach specialist at G2 Crowd. Find high-value keywords with low volume to create specific targets.)
Google Ads offers specific match types for your keywords. And selecting different match types can have a big effect on your results.
Interestingly, we had a variety of advice from marketers on this issue:
Lightning AI co-founder Colette Nataf also shared her ideal campaign structure:
“The perfect campaign structure for AdWords has 1 keyword and 1 match type per ad group. This means if your keyword is ‘advertising,’ you would have 3 ad groups targeting the word ‘advertising,'” said Nataf.
“[O]ne with broad match modifier, the second as phrase match, and the last as exact match. You also need to exclude the other match types, so if you’re running on phrase match you would exclude exact match.”
This structure helped Lightning AI reduce the CPC for one of their clients by 68% and increase the conversions of another client by a factor of ten.
“To lower your CPC on AdWords, in my opinion, the best strategy is to use negative keywords,” says Growth Hackers co-founder Jonathan Aufray.
These keywords tell Google which searches you don’t want your ads to appear on. And they can make a big difference in your CPC.
Aufray explains: “Let’s say we use PPC for Growth Hackers and we want to target people searching for ‘growth hacking services’ and its variations. We want to make sure that we don’t show up for keywords like ‘hacking services.'”
Jonathan Alonso, director of digital marketing at CNC Machines, points out that you can use negative bids for more than just keywords.
“I would separate the areas and create a negative bid to the zip codes, city, or states with no conversions. This lets you focus on locations with better conversion rates.”
If you’re using branded keywords, you may want to use a specific strategy for those keywords.
Jon Davis, CEO of Shape Integrated Software, uses the “Mind the Gap” strategy. “For non-brand-name keywords, focus on attaining position 2 by lowering CPC bids,” he suggests.
“When competing against larger brands, you’re paying a premium to achieve position one against companies with massive ad budgets,” Davis adds. “Targeting the second position allows you to show your ads above the fold on mobile phones and near the top of desktop/tablet screens, while dramatically lowering your cost compared to the first position.”
Mike Strmic from Auto Accessories Garage says “customers using search queries including branded terms are further along the purchase path so it’s worth bidding more on these terms. Bids can be reduced on non-branded queries with lower conversion rates.”
Experiment with negative and branded strategies to see what works best for you.
Besides narrowing the down the keywords that your ads target, you can also tell Google what time of day to show your ads.
“Check various metrics like impressions, conversion rate, and CPC during any day of the week or time of the day,” says Mike Khorev, growth lead at Nine Peaks Media. “Your aim is to find the timeframe with the lowest CPC but decent CTR and conversion rate.”
“If you are a B2B company, usually your CPC will be higher during business days/business hours, but the CPC will be lower during the weekends and after hours,” said Khorev. “However, the conversion rate will also be lower during the weekends in most cases, so you will need to find the right balance.”
While Google’s automatic bidding can help you get your ad in front of people, it can also drive up your costs. “It requires a lot of tweaking and experiments as well as time,” says Srajan Mishra, CEO of TSI Apparel, “but in the end it really helps in lowering CPC.”
“Manual bidding helps you to prioritize keywords that will convert better for you. Lower your bids on poorly converting keywords while increasing the bids for high-converting ones,” Mishra adds.
On a related note, says PPC strategist Matt Wheeler of Knowmad Digital Marketing, make sure to pause or remove inefficient keywords. “Often times when Knowmad takes over an existing AdWords account, I’ll find that a good portion of the client’s monthly spend was being allocated to a costly keyword or two that aren’t generating leads.”
Wheeler pointed out that there are other factors involved, “but this is a great place to start and isn’t terribly technical for people who don’t have a wealth of AdWords knowledge.”
You can also bid by position to get the best value from your ads. “One of the most effective ways to lower your organization’s CPC’s in Google Ads is to reduce bids for any competitive phrase in position above 1.9,” says Evolve Digital Labs copywriter Ian Revling. “This is efficiently done by targeting long-tail search phrases.”
Once you’ve started drawing conclusions about ads and ad positions, you can start experimenting with other options, says Stacy Caprio, freelance online marketer. “This will allow you to keep testing and improving the ad CTR and consequently the CPCs in your account.”
Some of the strategies we heard were very complex. But Tim Absalikov, co-founder of Lasting Trend, brought things back to earth for us:
“The most basic way would be to lower your bid. A lower bid = a lower max CPC Google can charge per click.”
All these are viable strategies for companies with different advertising goals, bidding strategies, and budgets. Analyze your current performance, identify where you can improve, and start experimenting.
Have you found a good tactic for reducing your CPC on pay-per-click ads? Share your advice in the comments below.
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