Paid Search Marketing

Five Ways to Lower Your AdWords & PPC Costs

By Tom Demers May 09, 2011 Posted In: Paid Search Marketing Comments: 0

This is the last installment in a three-part series on achieving specific goals within your paid search accounts. In the prior installments we’ve covered:

And today we’ll cover a third, somewhat less frequent objective: lowering your PPC costs.

It seems like lowering your PPC costs should be a pretty common objective, but in actuality lowering your CPA is usually a much better goal. After all, for most businesses you’ll take as many cost-effective leads and sales as you can get, so the concern is more how much you’re paying for each lead rather than how much you’re paying total. But as most PPC managers know, in the real world there are various factors that sometimes cause businesses to want to quickly lower the global cost of their PPC program:

  • Budget Allocation – They may have a finite amount of budget to spend on marketing, and other channels may be proving more efficient than PPC.
  • Resources in Other Departments – I’ve seen instances where increases in PPC lead flow – even cost-effective instances – had to be slowed because a company’s inside sales team simply wasn’t equipped to handle the new lead volume. Just because scaling a cost-efficient margin is theoretically a good thing doesn’t mean every business is ready to scale indefinitely.
  • Fundamental Shifts in the Business – Maybe the margin the business told you isn’t applicable anymore – shipping costs are up, they’re paying more for goods, the sales staff is costing them more than they’d originally budgeted – there may be various reasons, but if a business struggles the PPC campaign may be forced to adapt, even if it had been running at what the business itself had deemed an effective rate.

So when you’re faced with the task of “cutting PPC budget” what can you do? Here are five ideas.

Idea 1: Weed Out Underperformers

Most PPC managers are at least aware of negative keywords and the potential benefit they can have on a campaign. That said as with many paid search optimization tasks, negative keyword research often goes overlooked and underemphasized.

When you’re tasked with lowering your budgets, however, this is a great way to ruthlessly cut underperforming spend from your account without giving up too much of your profitable PPC spend. Here are some great resources for learning more about negative keywords:

Idea 2: Slow Down Underperformers

Similarly, you can identify high-volume ad groups, ads and keywords that are generating a lot of leads or sales, but doing so somewhat inefficiently and work to lower the cost of these segments of your campaign. Many times pay-per-click advertisers are working to balance volume with cost and as such are reluctant to make aggressive bid changes on high-volume groups for fear they’ll sacrifice volume. In this case, however, we have specific marching orders to tone down cost, and so we can think about attacking these high-volume areas by:

  • Lowering bids across ad groups and/or on specific keywords
  • Pausing keywords that are driving leads, but at a higher CPA than other areas of the account
  • More aggressively qualifying ad text such that you may sacrifice some volume from a high-volume ad, but will maintain qualified traffic at lower costs

Idea 3: Increase Quality Score

A focus on improving Quality Score is a tactic that’s come up in every instance – Quality Score improvements, when properly executed, can really be a win-win for your campaigns. As we mentioned in the previous installments of the series, a great way to identify problem areas in your account from a Quality Score perspective is to make use of our Quality Score Toolkit to crunch the numbers around your account’s Quality Scores. The kit also includes a white paper and other tools to help you determine how to actually take action on Quality Score underperformers. Increased Quality Scores can offer you a similar amount of traffic at a discounted cost, in many cases, and can help alleviate some of your budget issues.

Idea 4: Stop Experimenting

When you have bandwidth and budget, experimenting with new keyword verticals and slightly riskier ideas makes a lot of sense, but if you’re tasked with cutting budget a good approach may be to kill off some of your experiments and some of the “fringe” elements of your campaigns that drive lower quality leads or accrue budget while you find out if they’ll be winners: focus your spend on the stuff you know will work.

Idea 5: Look at Networks, Day Parting & Geo-Targeting

In many campaigns, elements such as which network (Google.com versus the search network) is performing well, which times of day drive more conversions, and which parts of the country and the world go overlooked as campaign managers focus on bids, ad copy, keywords and landing pages. As you look to trim costs, examine these elements and see if there are regions, networks, or times of day that are dramatically underperforming where you could be saving on costs.

Bonus Tip: Which of These Things Are Like the Others?

As we wrap up the series, let’s take a quick look at which tips are common across multiple of these objectives:

  • An emphasis on click-through rate and increasing Quality Score was prevalent regardless of objective – creating a more relevant, well-organized campaign is basically universally applicable.
  • Keyword analysis (in the form of keyword expansion, negative keyword mining, or identifying more specific terms to target) is another lever that affects each of these objectives
  • Bidding also plays a role in multiple objectives as manipulating your bids can certainly have a major impact on leads and costs
  • And ad text and landing page optimization played a common role as well, as getting more traffic and conversions from your existing campaign often means creating more compelling ads and landing pages

Ultimately which of the levers you decide to pull depends mainly on what your pay-per click objectives are.

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