The Most (& Least) Expensive States for PPC - New Data

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Whether you’re managing paid search for a local business or you’re the VP of Marketing for a national brand, you’ve certainly discovered that entering a new market can always be a daunting undertaking. Our country is a melting pot of different demographics, interests, and what we’re searching for differs in each state.  

Well, this all plays into how smart advertisers structure their campaigns and ultimately what they pay per click in each state. How much PPC costs, it turns out, depends on what state you live in. What states cost us the most per click? We dug into the PPC cost data and created this infographic showing the most and least expensive states for paid search advertising based on average local cost per click (CPC):

PPC Costs by State

Click the image to enlarge

Below are all 50 states, ranked in order of the average CPC in each state from highest (most expensive) to lowest (least expensive):

  1. Alabama has an average CPC 78 percent greater than the US average.
  2. West Virginia has an average CPC 60 percent greater than the US average.
  3. Maine has an average CPC 48 percent greater than the US average.
  4. Alaska has an average CPC 43 percent greater than the US average.
  5. Louisiana has an average CPC 34 percent greater than the US average.
  6. Washington has an average CPC 27 percent greater than the US average.
  7. Idaho has an average CPC 26 percent greater than the US average.
  8. North Dakota has an average CPC 24 percent greater than the US average.
  9. Missouri has an average CPC 21 percent greater than the US average.
  10. District of Columbia has an average CPC 21 percent greater than the US average.
  11. Ohio has an average CPC 21 percent greater than the US average.
  12. Texas has an average CPC 19 percent greater than the US average.
  13. Mississippi has an average CPC 15 percent greater than the US average.
  14. Indiana has an average CPC 14 percent greater than the US average.
  15. Connecticut has an average CPC 11 percent greater than the US average.
  16. North Carolina has an average CPC 9 percent greater than the US average.
  17. Oklahoma has an average CPC 8 percent greater than the US average.
  18. Pennsylvania has an average CPC 6 percent greater than the US average.
  19. Georgia has an average CPC 5 percent greater than the US average.
  20. Colorado has an average CPC 3 percent greater than the US average.
  21. Vermont has an average CPC 3 percent greater than the US average.
  22. Oregon has an average CPC consistent with the US average.
  23. California has an average CPC consistent with the US average.
  24. Wisconsin has an average CPC consistent with the US average.
  25. Montana has an average CPC 1 percent less than the US average.
  26. South Carolina has an average CPC 1 percent less than the US average.
  27. Florida has an average CPC 1 percent less than the US average.
  28. Kansas has an average CPC 2 percent less than the US average.
  29. Maryland has an average CPC 2 percent less than the US average.
  30. Michigan has an average CPC 4 percent less than the US average.
  31. Virginia has an average CPC 5 percent less than the US average.
  32. Arizona has an average CPC 5 percent less than the US average.
  33. Illinois has an average CPC 6 percent less than the US average.
  34. Tennessee has an average CPC 8 percent less than the US average.
  35. Massachusetts has an average CPC 8 percent less than the US average.
  36. New Jersey has an average CPC 11 percent less than the US average.
  37. Iowa has an average CPC 20 percent less than the US average.
  38. Hawaii has an average CPC 22 percent less than the US average.
  39. New York has an average CPC 23 percent less than the US average.
  40. New Mexico has an average CPC 25 percent less than the US average.
  41. Nevada has an average CPC 27 percent less than the US average.
  42. Utah has an average CPC 28 percent less than the US average.
  43. New Hampshire has an average CPC 28 percent less than the US average.
  44. Kentucky has an average CPC 28 percent less than the US average.
  45. Arkansas has an average CPC 32 percent less than the US average.
  46. Minnesota has an average CPC 37 percent less than the US average.
  47. Wyoming has an average CPC 38 percent less than the US average.
  48. Rhode Island has an average CPC 42 percent less than the US average.
  49. Delaware has an average CPC 45 percent less than the US average.
  50. Nebraska has an average CPC 45 percent less than the US average.
  51. South Dakota has an average CPC 65 percent less than the US average.

Average CPC by US State: Methodology

To determine the relative CPC for each state, I used our free keyword tool to create a list of over 15,000 high volume English search keywords across over 20 different industries. I then took this list and ran it through the Google Keyword Planner to get average CPC estimates for these keywords in each state & the entire US to see how Google estimated their costs per clicks would differ in each state. With this list of estimated CPCs by state, I then indexed it and compared each state’s estimated CPC against the estimated CPC of the whole US to complete this analysis.

Having this data be as unbiased as possible was a priority for me. The decision to use estimates from the Google Keyword Planner data protects this research from any biases from individual clients who target different states or use geo bid modifiers. The volume of keywords considered across different industries protects this analysis from a bias of a rogue keyword or industry with spiked regional interest.

Notable Trends in Average PPC Costs

There are some interesting trends in this regional CPC data.

Rural Regions Have Higher CPC

The top 5 states (Alabama, West Virginia, Maine, Alaska & Louisiana) fill out a much more rural profile than the US average. With fewer nearby businesses, it’s very likely that these states’ residents more frequently turn to Google when they look for a service or product. Consequently, advertisers have more to gain from bidding aggressively in these markets.

The Biggest States Fall in the Middle

Of the 10 most populated states, not a single one made the top 10 or the bottom 10. For instance, the most populated state, California, sits nearly directly in the middle at #23 with a CPC similar to the US average. This is likely telling us that many advertisers targeting these regions are doing so in the same campaigns targeting the rest of the nation – driving their average CPCs closer to the national average.

Low Unemployment Rates Mean Low PPC Costs

I thought this was interesting: 9 of the 10 states with the lowest average CPCs also have unemployment rates below the national average – in most cases by a comfortable margin (Rhode Island was the sole exception here). Full employment is typically a sign of lots of local businesses in the area – so there’s less need for local users to need to turn to Google to fulfill their needs and advertisers don’t need to be as aggressive with their bids.

Do you see any other interesting trends in the data? Are you seeing similar trends in your accounts or in your industry?

About the author:

Mark is a Data Scientist at WordStream with a background in SEM, SEO, and Statistical Modeling. Follow him on Twitter, LinkedIn, and Google +.

 

 

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Comments

andy
Jun 09, 2015

Did you use Google's suggested bid as the max CPC when getting the estimates for the CPC you'd be expecting?

Ian Sherk
Jun 11, 2015

I was wondering the same thing. I'd think setting the bid to ~$200 would secure the top spot in most auctions. Taking the ad position variable out of the equation could help with data integrity. Either way, this is a great creative article.

Ian

Mark Irvine
Jun 11, 2015

Hey Andy & Ian,

Exactly. Bids were kept at a high constant value in all 50 states. In nearly all cases, the high bids normalized ad position in the top position for each state. In the rare few that a keyword wasn't in top position, ad positions were normalized across states within 0.1 position.

Good question! Glad you liked the article.

Ron Marshall
Jun 09, 2015

Nice work. I'm having a problem with this paragraph:

"I thought this was interesting: 9 of the 10 states with the lowest average CPCs also have unemployment rates below the national average – in most cases by a comfortable margin (Rhode Island was the sole exception here). Full employment is typically a sign of lots of local businesses in the area – so there’s less need for local users to need to turn to Google to fulfill their needs and advertisers don’t need to be as aggressive with their bids."

The second sentence controverts your findings as stated in the first sentence. Please explain.

Hashim Warren
Jun 11, 2015

you beat me to the punch

Mark Irvine
Jun 11, 2015

Hey Ron & Hashim,

I think this may be a semantic confusion.
Low unemployment also means high employment.

I make the assumption that lots of jobs also means lots of local businesses. And since there are lots of local businesses, people may not need to search as aggressively to find products or services. Just a theory. Open to other ideas, of course :)

Everestebook
Jun 09, 2015

Really inspiring and informative post…
thanks for share….
Very Unique idea of post…

jay
Jun 11, 2015

Where can I get similar state wise information for south africa and india

Mark Irvine
Jun 11, 2015

That's a good idea for a future post! Thanks!

Tony Griego
Jun 17, 2015

Hi Mark,

I was curious about which industries were measured in your study, then I saw your link "across over 20 different industries." That link leads to a top 10 list, were the additional 10 subsections of those bigger categories or industries that were not on that list?

Thanks!

Eric Ellen
Jun 18, 2015

Dont understand why Alaska would be 43% higher than average? Is there high unemployment there?

John
Jul 23, 2015

Hugely informative article Mark. Thanks for the time you put in. I have this bookmarked now when I can't explain why a CPC is higher than expected!

I found an interesting trend I think. I was curious to see how the 10 most innovative states would stack up against your research. I found on article on bloomberg.com about the 20 most innovative states and took the top ten, and aside from CT and WA the other 8 (CA, MA, OR, NY, NJ, CO, MD, & MN) were all number 20 or higher on your list. So the most "innovative" states leaned toward a lower CPC. I credit us search marketers!

Mark
Jul 23, 2015

John,

That's really fascinating! Thanks for sharing. I also credit us search marketers out there, lifting quality score, and lowering CPC!
I mean, what else could it possibly be ;)

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