AdWords Tips

What to Do When Your AdWords CPCs Are Too High

By Tom Demers July 18, 2011 Posted In: AdWords Tips Comments: 2

An issue that is becoming more common as PPC gets increasingly competitive is escalating costs per click (CPCs) in niches that had previously been relatively uncompetitive. The problem here is that PPC campaigns that had once been profitable or that may have been viable become untenable for advertisers. If a conversion becomes profitable for you at $75 and you’re paying $15 a click, it’s very difficult to run a profitable campaign.

In this post, we’ll look at five things you can do to try to push down those AdWords costs per click.

1. Focus on Improving Quality Scores

We usually like to start here, as a focus on Quality Score affords you an opportunity to compete in the auctions you want to be in for a reduced rate without shifting your keyword or network targeting. Many times if you’re taking over a new campaign, re-organizing the highest volume campaigns to focus on click-through rate as well as conversion and creating more relevant groups can greatly improve your Quality Scores and lower your costs.

Obviously regular readers of the blog know Quality Score is a frequent topic at WordStream, and our Quality Score toolkit is a great collection of resources on how to increase your Quality Score. You can also try using the free AdWords Performance Grader to measure how your campaign performs on metrics such as Quality Score.

2. Find Alternative Keywords to Target

Many times, despite your best efforts to improve Quality Scores, an auction may still just seem too competitive and expensive for it to make sense for your product or service. In these instances, you may just be targeting the wrong terms. You can expand your keyword list in either of two ways in these instances:

  • Wider – Target a new niche. By identifying a tangential keyword vertical to the one you’ve been attempting to drive traffic around you might find a less competitive, more cost-efficient means of driving qualified traffic.
  • Deeper – By getting more specific and targeting longer-tail, more granular variations of your core keywords, you can often find highly qualified traffic for significantly less money.

3. Allocate More Spend to the Content Network

If you’ve attempted to lower your Quality Scores and have exhausted alternative keyword targeting strategies, you might try to find more volume from the content network (or get started with a display campaign or AdWords retargeting campaign). Often times even when competition is high and CPCs are sky-rocketing on the search network, the content network can offer less competition and lower costs per click, and might actually convert well and generate acceptable costs per acquisition for you.

4. Allocate Some of Your Budget to Another Network Altogether

Similarly to focusing more of your budget on the content network, trying out platforms such as adCenter, Facebook, and LinkedIn that generally have fewer advertisers vying for clicks than AdWords can often allow you to get similar quality traffic for lower CPCs. Obviously if your content network campaigns are also handicapping you on AdWords, networks like Facebook and LinkedIn might be problematic as well, and you might want to revisit the fundamentals of your display targeting and ads. Similarly, if your campaigns aren’t well-optimized for Quality Scores and conversion on AdWords, moving to adCenter likely won’t solve your issue, but if competition is the main factor driving up CPCs, any of these networks may allow you to find more volume for lower costs.

5. Revisit Your Conversion Flow

Finally, if all else fails, you may simply have to revisit your conversion flow – from your ad copy all the way through to goal completion. It may be that the only way to make the economics of your pay-per-click campaign work is to focus your efforts on landing page optimization and convert more of that expensive traffic you’re driving.  If you’re aiming for $75 conversions and are paying $15 a click, rather than lowering your CPCs, you might be able to nudge your conversion rate up to 30% and make your campaign profitable that way. Check out this list of 20 great conversion rate optimization resources for more ideas on how to improve conversion.

Ultimately, even though paid search is becoming highly competitive because of the targeted nature of the channel and the great results many advertisers are seeing, you can still find ways around high CPCs to create profitable campaigns in many crowded niches.

AdWords Performance Grader




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Comments

Thursday March 22, 2012

Rick Noel (not verified) Said:

Great piece Tom. All 5 tips will help. Increase distribution on the content network for highly competitive keywords is a great idea. Your point about optimizing the conversion is well taken. If you cost per visitor across channels is somewhat fixed, then CRO is the way to get. Thanks for the link to the 20 CRO resources.

Thursday March 22, 2012

Elisa Gabbert Said:

Glad you found it helpful, Rick!

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