There are few variables as important to your PPC campaign as your cost per click (CPC).
It represents what you’ll pay for each user who clicks on your targeted ads – which means a difference of even a few cents can add up to thousands of dollars in a large-scale campaign.
Unfortunately, you can’t directly manipulate this variable the way you can, say, the number of ads you run or the total budget of your campaign. Your CPC is determined by Google (or the advertiser of your choice, though we’ll be mostly focusing on Google in this guide).
But you can influence your CPC with the right strategies.
And if you’re persistent, you can bring it down to a very reasonable number.
So how do you do it?
Why You Should Lower Your Cost Per Click in PPC Advertising
Why should you care about lowering your cost per click in PPC?
The obvious benefit is that it can save you money.
Think about it; if you can maintain a consistent conversion rate, with a consistent conversion value, a lower CPC will lead directly to a higher ROI for your strategy. It’s a lower cost basis, with all other factors being (mostly) equal.
Lower CPCs can also help you target better keywords more aggressively, make the most of a thin budget, and compete with rivals that would otherwise outspend you easily.
Two Approaches to Lower Your Cost Per Click in PPC
In this guide, we’ll focus on several tactics that can help you lower your CPC. These factors can be grouped into two main categories:
- Improving your Quality Score. In Google Ads, your Quality Score is a measure of the quality and relevance of your ads and target keywords. A high Quality Score isn’t just a flattering comment; higher Quality Scores are associated with better ad positions and – you guessed it – lower CPCs. If you can boost your Quality Score enough, your average CPC should go down.
- Avoiding competition. Like all other goods and services, the price of advertising fluctuates in response to changes in supply and demand. Since advertising supply is practically unlimited in the digital world, demand is the more important variable; excessive demand for a specific type of ad or a specific platform is going to push prices higher. If you can find a less competitive, lower-demand space, you can score a lower CPC.
Improve Your Quality Score
We’ll start by focusing on your Quality Score; again, the higher this rating is, the lower your CPC should be.
In this section, we’ll be focusing on Quality Score in Google Ads. Keep in mind that other PPC platforms have similar advertiser ratings that may function differently.
According to Google, Quality Score is typically calculated based on three factors. Each of these three factors is rated as average, above average, or below average.
- Expected clickthrough rate (CTR). Based on aggregated data from historical performances, Google estimates the clickthrough rate (CTR) for each ad. In other words, if a user sees this ad, how likely are they to click on it? A higher anticipated CTR is associated with a higher Quality Score.
- Ad relevance. The ad relevance also matters. This is more of a qualitative measure, defining how closely aligned your ad copy is with the user’s search keywords and search intent. You need to give people what they’re looking for.
- Landing page experience. Quality Score also depends on the overall landing page experience. Do users spend time on your landing page? How likely are they to convert? Is your landing page content aligned with your ads and target keywords?
Above average ratings in all three areas should lead to a higher Quality Score, which in turn, should lower your CPCs.
Here are some of the best tactics you can use to boost your Quality Score reliably:
- Use single keyword Ad Groups (SKAGS). Landing pages and text ads are keyword specific, so consider using single keyword Ad Groups (SKAGS). This will make it much easier for you to ensure that all your ads and landing pages are closely aligned with keywords and user search intent. Sure, it’s a bit more work on your end, and it might disrupt your existing grouping strategy, but if it means boosting your Quality Score, it’s worth it.
- Don’t worry about match type. Quality Score is based on historical impressions for exact searches – so there’s no need to worry about match type. This is an important variable to consider in your PPC campaign, but don’t waste your time experimenting with match type for the sake of pumping up that Quality Score.
- Focus on user intent. When targeting a specific keyword, it’s a good idea to include that keyword (or a close variant) in your ad to maximize its relevance. But you also need to go a step further; you need to understand why a user is searching for this term so you can give them what they want in each ad. For example, if a user searches for “sturdy bookshelf,” we can reasonably conclude they’re looking to buy a shelf that serves the specific purpose of holding lots of heavy books (or similarly heavy items). It’s not illegal to advertise similar products, like ornamental bookshelves or decorative shelves, but it’s much better to focus on the primary user intention.
- Split test and rotate your ads. It’s hard to tell exactly which types of ads will result in higher Quality Scores and CTRs, which is why we need to practice ongoing experimentation. The best way to do this is to split test (AB test) and rotate your ads. Split testing means circulating two different ads under similar conditions to see which one performs better; you can then ditch the loser, keep the winner, and analyze the results so you can use those insights to create better ads in the future. From there, you’ll need to continuously rotate in new ad varieties. This way, you can keep pushing your Quality Score higher and higher – while improving your overall results at the same time.
- Avoid ad cannibalization. High Quality Scores require strategic focus, so avoid ad cannibalization; in other words, don’t have multiple ads competing with each other for digital real estate. Each ad should be perfectly optimized for a unique niche to maximize relevance; if another, less relevant ad could also appear for a similar hypothetical search, it could compromise your results.
- Optimize your landing pages for target keywords. It’s tempting to spend all your efforts on ad optimization, but your landing pages need love too. Make sure your landing pages are optimized for specific keywords and user intents – and create new, original landing pages if necessary. If you have only one landing page for all your different ads, it’s a bad sign; you’re much better off with hyper-specifically targeted pages.
- Pay close attention to landing page behavior (and take action). Landing page optimization is about more than just ensuring keyword relevance. It’s also about improving user behavior metrics – which can boost your conversion rate at the same time. If your landing page has a high bounce rate or a disappointing dwell time, analyze the page to try and figure out why. Is the content misaligned with user search intent? Is the content lackluster or missing something? Are there insufficient visuals or trust signals? You can split test and rotate your landing pages just like you do with ads.
- Carefully lower your max bids. Lowering your maximum bids can set you up for a lower cost per click as well, but you need to exercise caution. If you lower your maximum bids too much or too quickly, you could end up with a lower position and worse overall result. Your best bet is to lower your maximum bids slowly and incrementally, so you can find the sweet spot for cost and performance.
- Pause ads with high cost to conversion ratios. Sort your keywords by cost, then filter by conversions so you can compare the cost and conversion of each advertising opportunity. Find the ads with the highest cost to conversion ratios and consider pausing them. You can spend more money and energy on ads with a lower relative cost basis. Optimize this enough, and you’ll end up with highly cost-efficient ads across your campaigns.
- Keep introducing new keywords. Never stop experimenting. It’s tempting to stick with the keywords you understand best, but you’ll see better results if you keep introducing new keywords and tinkering with new strategies. You’ll better understand your demographics, flesh out your ad portfolio, and iteratively push your Quality Score higher.
- Look into other variables. There are many secondary and tertiary variables that can influence user behavior in response to your ads, so take them into consideration. Users may behave differently based on the device they’re using, their location, the time of day in which they see the ad, and other factors. Google asserts that these variables don’t directly influence your Quality Score, but they may have an indirect impact; even if this impact is negligible, these variables are worth considering to improve the performance of your ads and landing pages.
- Check your Quality Score regularly. In your Google Ads account, head to the Keywords section of the left menu. In the upper right corner, click the columns icon, then open the Quality Score section under “Modify columns for keywords.” Here, you can find all your Quality Score data. Be sure to check your scores regularly so you can analyze your momentum, determine whether your tactics are working, and brainstorm future strategic decisions.
Avoid the Competition
Let’s say you’ve maxed out your Quality Score and you’re still not satisfied with your CPC.
What can you do?
A secondary option is to avoid high-demand niches and limit your competition.
Apart from strategic business decisions (like a full pivot), these are your best tactics here:
- Know your top competitors. Your first job is to know who your top competitors are and analyze the threat they pose. Who are the top rivals in your industry, how aggressively are they advertising, and do they seem to have an adversarial or aggressive approach? Are there any areas of weakness that you could exploit? Are there platforms they aren’t using or keywords they aren’t targeting at all?
- Use multiple platforms and networks. Google is (understandably) the top dog in the PPC advertising world, but Bing is better in many cases. One of the critical advantages that Bing has is a lower average CPC. The reach may not be as broad, but the cost basis is attractive, and if conversions are your bottom line, tapping into the power of Bing is a no brainer. Of course, Bing isn’t the only alternative platform to Google; you can also consider any number of social media platforms and other ad networks relevant to your brand.
- Use both high-funnel and low-funnel strategies. Sometimes, you can lower your average CPC and see better results by shifting up or down in the sales funnel. If all your competitors are clamoring for attractive, immediately valuable low-funnel users, consider targeting neglected high-funnel users. In other words, target customers who are still in the earliest phases of the buying decision making process. Just keep in mind that users in different stages of the sales funnel are going to require different ad and landing page optimizations.
- Target unique demographics. Finally, consider targeting unique demographics. You may be able to avoid or minimize your competition by, say, targeting users in a different geographic location, users in different age groups, or users with different behavioral patterns. To be truly effective here, you’ll likely need to experiment – and there’s no guarantee your “alternative” demographics will be as valuable as your primary targets.
Do you want to lower your overall CPC?
Do you find yourself hoping for a more cost effective, higher-ROI PPC campaign?
Are you unsure where to start?
PPC.co has the experts who can help – so contact us for a free consultation today!
In his 9+ years as a digital marketer, Sam has worked with countless small businesses and enterprise Fortune 500 companies and organizations including NASDAQ OMX, eBay, Duncan Hines, Drew Barrymore, Washington, DC based law firm Price Benowitz LLP and human rights organization Amnesty International.
He is a recurring speaker at the Search Marketing Expo conference series and a TEDx Talker. Today he works directly with high-end clients across all verticals to maximize search engine marketing (SEM) ROI. Connect with Sam on Linkedin
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