CPC means cost per click and it refers to the price that one pays for each click he or she gets while running a PPC marketing campaign. There are two types of CPCs: actual and max. The former indicates the amount you end up paying while the latter indicates the maximum amount of money that your team is willing to spend per click. For example, your max CPC bid is $3.50 but you managed to secure the top position with a bid of $2.25. This means that you will only pay $2.25 per click instead of $3.50. Now, the process of setting up a PPC advertising campaign is already challenging as it is. It would be frustrating if your clicks were limited by high average CPCs. In this post, we will discuss the causes of high CPCs and what you can do to lower them.
Understanding Factors that Cause High CPCs
Below are the common factors that affect cost per click averages:
- Quality score
Google rates the quality of keywords by awarding a quality score (between one and 10). Factors that are considered include the overall relevance of the keywords, landing pages, ads, and one’s historical performance. Quality scores are important because they indicate how much money you need to pay to reach a specific position on the page. The more relevant one’s ads are, the less Google charges for you to rank higher.
Although industry trends are impossible to control, it is vital to understand them and notice patterns. To gain a basic idea of the expected CPCs for the keywords in your industry, you may consider using Google’s Keyword Planner. Oftentimes, higher average CPCs are the result of the industry having a higher value per conversion. In other words, advertisers are willing to pay more per click.
Why do Google Ads run similarly to auctions? The more bids a keyword receives, the more expensive the next bid will be.
How to Lower the Average CPC
Now that you have a clearer picture on what drives CPCs, below are several strategies to help you optimize your campaigns and reduce the average CPCs:
- Test new landing pages
A landing page influences a couple of factors in the quality score: overall landing page experience and ad relevance. If you have the budget to create multiple landing pages, you must remember to test new ones via A/B testing. Good landing pages should consist of concise sign-up forms, creative visuals, a direct approach to content creation, and focusing on one product or service at a time.
- Create specific ad groups
Business owners are recommended to separate their offerings into small, related groups and target each group individually. By creating ads tailored specifically to each ad group, one can increase their ads’ relevance. This helps boost the quality score and decrease the average cost per click.
- Include long-tail keywords
Alternatively, business owners can bid on keywords that are not in their competitors’ radars. The more specific businesses can get with their keywords (while still being relevant), the cheaper their CPCs will become due to fewer bids.
There you go, here are a few methods to improve the overall health of your PPC marketing account and drive the average CPCs down.