Google Ads (formerly Google Adwords) advertising is largely driven by a fascination with how to decrease CPC (cost-per-click) costs.
If you're able to pay less for a click, then you’ll also have a lower cost per conversion (CPA), right?
The answer is: typically, yes.
So how would you even start to reduce your CPC costs?
Simply lowering your bid probably won't do the trick (at the beginning at least), so what strategic steps can you take to improve your competitiveness while still keeping your wallet healthy?
In this article, we’ll give you the rundown on how to lower your CPC effectively, while also keeping you competitive and lowering your CPA.
Let’s get started.
- First, it's all about the high-value keywords
- 6 incredible ways to decrease CPC costs
- 1. Keep it relevant
- 2. Don’t forget about Quality Score
- 3. Improve click-through rate (CTR) with ad testing
- 4. Lower your bids
- 5. Use negative keywords
- 6. Think about location, device, and ad schedule
- Final takeaway on decreasing CPC
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First, it's all about the high-value keywords
As with any industry, the potential profit from certain keywords correlates with the average CPCs of those keywords.
If your industry stands to make $5,000 because of the intent behind a certain keyword, then don't expect your CPC to come down to the $1 range.
That simply won't happen. With a $1 bid for a keyword that profitable, you won't even be on the first page of the Google search engine results page (SERP).
But that doesn't mean you can't have a lower CPC than your competitors, rank higher than they do, or laugh harder on your way to the bank.
This is possible for one simple reason: your ad rank is a combination of your bid + your Quality Score.
When your Quality Score is excellent, you can get away with lower bids than your competitors while also ranking higher than them. 😉
6 incredible ways to decrease CPC costs
So, your CPCs seem to be skyrocketing.
In certain industries, this is unavoidable.
The tech, software, and insurance markets all seem to hedge on the higher side of CPC. (It’s good to keep your industry and your amount of competition in mind when assessing your CPCs. Less competition means lower CPC opportunities.)
But there’s a light at the end of the tunnel, even for historically expensive and competitive industries. Your CPC can be lower.
Let’s look at six incredible (and simple) ways to decrease CPC costs in your Google Ads campaigns.
1. Keep it relevant
You must be tired of hearing this one, right? Well, you shouldn't be.
The best PPC campaigns in the world are the ones that are extremely granular. Meaning, they have only one keyword per ad group.
Yes, one. (But you're still allowed to have different match types of that one keyword in that one ad group.)
Your single keyword ad groups (SKAGs) should have extremely relevant ad copy to that keyword. They then should have specific landing pages for that keyword and those ads, so the messaging in the ad is consistent with the messaging on the landing page.
You might be thinking, "Wait a minute! That sounds like a lot of work!"
Yep, it sure is. But my advice for you is to start small and see the results for yourself. Take your most popular keyword and follow that recipe. And if it works, then go ahead and duplicate for other keywords.
If you’re having trouble thinking of keywords that are most relevant to your business and that’s causing an added relevancy problem, take a look at the Google Ads Keyword Planner to get suggestions around keywords that are already close to relevant. You’d be surprised what you find.
Bonus tip: Make sure the text on your landing page is "highlightable" so Google's crawlers/spiders can crawl the text and see the relevancy between your keywords, ads, and landing page.
2. Don’t forget about Quality Score
We can't forget Quality Score, especially not after we just sang its praises.
If you've followed and implemented your SKAGs, then you'll be happy to know that a higher Quality Score is a (fortunate) side effect of better relevancy.
When you start creating highly-targeted ads for your one keyword, then the click-through rate (CTR) will ultimately go up because your ad is better reflecting the searches that triggered it to show.
And when CTR goes up, Quality Scores go up a little bit more, too. This is because a higher CTR benefits your “expected CTR” (one of three Quality Score ranking components).
On top of that, improving your ad-to-keyword match improves your “ad relevancy” ranking (another of the three Quality Score ranking components).
Even better, improving your landing page-to-keyword match and landing page functionality will improve your “landing page experience” ranking (the last of three Quality Score ranking components).
And when Quality Scores go up because of all this, your ad rank goes up, and your CPC can go down.
All that is fantastic enough—but we’re not done yet.
3. Improve click-through rate (CTR) with ad testing
One of the things that I love about digital marketing is the speed. We get to see the results of our efforts very quickly, and we can then determine which direction to take.
It's therefore vital that you frequently create different ads and test them against your winning search ads.
What do I mean by that? Don't settle for a CTR of 6% with one winning ad—try to improve it.
Heck, even if your Quality Score is 10/10, there are still better words to discover, better calls-to-action to try, and better offers to push.
Test. them. all.
4. Lower your bids
So you're seeing that your Quality Scores are going up, and your ad rank is, too.
Here’s the caveat: sometimes, when your quality pushes your rank up, Google decides to make you pay the same CPC or higher. It happens.
Why is that? Well, let's just say that I don't completely trust the automated system that is supposed to only charge you one cent more than the ad below you (given that all metrics are the same between you two).
And if your rank came up a lot because of your higher quality, to the point where you're now competing with the biggest contenders, their Quality Score is also probably pretty high.
This means that sometimes the only thing standing between you two and that number one spot is still… your bidding power.
So if you’ve successfully completed steps 1–3 and your CPC still isn’t where you want it to be, you can then start decreasing your CPC bids in small increments.
If you’re using automated bidding strategies or smart bidding (both of which also sometimes cause higher CPCs because most strategies don’t have a max CPC limit), you won’t be able to control your bids directly like you can with manual bidding. So you’ll need to use various bid adjustments to help take your bids down a notch.
When you do so, keep an eye on your Search Impression Share (Search IS) and Search Top Impression Share (Search Top IS) to ensure that they don’t fall dramatically.
And most importantly, keep an eye on your conversion rates and return on investment (ROI) while lowering bids.
You'd be surprised at how far down your CPCs can go while keeping everything else the same.
Bonus tip: One thing you don't want to sacrifice with decreased CPCs is volume. Why save 30% on CPCs when your volume drops 50%?
5. Use negative keywords
One thing people often neglect is their search terms report. When you take a look at this report, you're able to see all the actual search queries that are triggering your keywords and ads.
I’ve been told by several Google Ads reps that the continuous addition of negative keyword lists allows the system to improve itself and also improve the overall health of your account.
It also narrows in further on the relevancy of your ad campaigns and ad groups, taking you back to tip number one. 👆
On top of that, you'll stop paying for keywords you don't want to pay for.
You’d be surprised how expensive clicks from some of these irrelevant search terms can be. You’d be equally surprised how much search volume those irrelevancies can get.
That’s because the irrelevant keyword variations are usually the furthest away from (AKA least relevant to) the original keyword. If you’re using broad match keywords, you’ll have this problem a lot.
In that case, try switching to phrase or exact match to clean up your search terms a bit.
If you're using normal and long-tail keywords in phrase match and exact match types, you might have this problem less often, but you’ll still need to comb your search terms since irrelevant variants of your keywords will still pop up.
Heads up: Competition keywords (containing your competitors' names) can also dominate your search terms when you don’t intend for them to, and those are very pricey.
6. Think about location, device, and ad schedule
Any experienced marketer will know that there's more to bidding than just keywords.
You can consider other areas for bid adjustments that can help decrease your CPCs.
Try asking these questions:
- Location: Which areas in my location targeting bring about the most conversions with a relatively good CPA? Which locations bring about lousy performance?
- Device: Which device (computer, tablet, mobile, TV screens) brings out good and bad results?
- Ad Schedule: Which time of the day or day of the week converts higher?
By asking these questions, you’ll find that there are areas of low performance and high performance where CPCs can be decreased and increased.
In increasing the bids during instances of high performance, your ad can become more visible, thus (hopefully) increasing conversion rates. Meanwhile, you’ll be reducing the CPC in areas that are flunking, which should help bring down your average overall CPC.
Pro tip: Desktop clicks can tend to be way more expensive. And depending on the industry, they may be way less useful. B2B and SaaS businesses sometimes benefit more from desktop, but in eCommerce, it’s often more common for people to shop and buy on their phones. So only pay high for those pricey desktop clicks if they’re the holy grail of your conversion volume.
Final takeaway on decreasing CPC
In summary, decreasing your CPC is oftentimes more affected by whittling down your audience to eliminate wasted ad spend and clicks than anything else.
The more refined your understanding of your audience is, the better you can craft your ad messaging directly to your ideal customer/client, and the higher your click-through rates will be without increasing costs.
Additionally, though, you now know how you can use your Quality Score and the SKAGs system to improve your ad rank without cranking your bids up to the ceiling.
On that note, if you’re looking to get a more detailed look at Quality Score, head to our next article on it to brush up.
Otherwise, get cracking with those CPC optimizations and see how far your CPAs come down with your CPCs.