According to the Google keyword tool, the suggested bid for the term ‘life insurance’ is over $76. For one click. That’s a lot of money for a single visitor. The cost is so high because it’s an auction system and this high price demonstrates the demand for the term.
Of course, if you have ever used the keyword tool for your own keywords you will probably notice that the suggested bid can be significantly different from what you actually pay. This is because everyone’s CPC is unique depending not only on what they bid, but also their Quality Score. Quality Score is the amorphous mystery which holds us to account for the words we bid on. Google wants their ads to be relevant – so if your ads aren’t relevant for a particular search, you will have to pay a premium to be shown.
The flip side of this is that you can get your CPCs lower by being more relevant. The following are some techniques we have used to improve the relevance and quality of our Adwords accounts and in turn decrease costs.