Don’t Pay $76 Per Click – 10 Ways to Lower Your Cost Per Click  

By June 13, 2014 PPC No Comments

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.

1.Match your keywords to your ad copy

One of the main signs of quality is whether your ad copy actually reflects the keywords you are bidding on. If you’re bidding on the keyword “balance transfer credit card”, you will probably pay a lower CPC if your ad mentions Balance Transfer Credit Card versus if it doesn’t. The problems arise when you have lots of different keywords in the same adgroup – how can you have targeted ad copy for many different keywords? That leads us to our second tip…

2.Have Tightly Themed Adgroups

If your adgroup contains the phrase match “credit card” – this means your ad could show for things like “balance transfer credit card”, “rewards credit card”, “credit card deals” and much more. You should look at the searched terms report and if there are significant volumes of any individual term, or groups of slightly varied terms, you should break those out into their own adgroup. These new adgroups should have tighter themed keywords and will be able to have more targeted ad copy, allowing better CPCs. You probably want to have dedicated adgroups for each of your biggest and most expensive terms.

3.Add Negative Keywords

To improve your relevance, and minimise wasted spend, regularly check your searched terms report so that you can add any negative keywords (i.e. words your ad shouldn’t show for). For example, depending on the client we might add negative terms like “free”, “job” or “download”.

4.Have Dedicated Landing Pages

As much as possible, you should try to have dedicated landing pages for each ad group. Your ‘cheap car insurance’ adgroup should not have the same landing page as your ‘car insurance comparison’ adgroup – because each of these landing pages needs content reflective of what the searcher is looking for. If your landing page doesn’t mention either cheap or comparison, then these adgroups will be paying higher CPCs. Remember, PPC is different to SEO – you can have as many dedicated PPC landing pages as you need, they don’t need to be part of your site map or navigation – you just need them for relevance to searchers.

5.Stop Relying on Expensive Keywords

If you’re a financial services provider selling ‘home loans’, the exact term [home loan] is going to be very expensive – even if you get the most relevant ad copy and landing page possible. This is a very competitive term, and will be expensive per click. However, if you do more research and bid on longer tail keywords – for example, [home loan nsw] or [home loans online] – not only will your CPC’s likely be lower, the conversion rates on longer tail keywords is also often higher. Admittedly the volume for each individual keyword will be lower, which is why you need to do ongoing research to grow your long tail keywords list.

6.Adjust for Mobile

Adwords lets you segment your traffic for mobile audiences – are mobile devices more expensive than desktop? Do they convert less? Investigate the performance of mobile devices for your various adgroups and then there are two things you can do. A) you can create mobile-specific ads which will be the ad shown to people on mobile devices. This can increase both your relevance and your conversion rate for mobile visitors. B) You can put bid adjustments on mobile visitors – if they aren’t as valuable to your business as desktop, then you can reduce bids for mobile devices by a percentage (or even 100% if you want to remove mobile traffic altogether). Keep in mind that even if your mobile devices convert less than your desktop visitors, they could be having a valuable branding impact. Do testing before switching off altogether.

7.Target by Location

CPCs and Conversions will also vary by location, so Google allows you to vary your bids depending on geography.  For example, capital cities are often more competitive and expensive than regional areas. To find out which areas are performing better than others, you can use your analytics user report or look on the dimensions tab in Google Adwords. Then, when you want to make a change to your location bids, go to the Settings > Locations tab, and simply add the locations you want to adjust your bids for.

8.Vary Bids by Time of Day/Day of Week

The final bid adjustment Google allows is by time period. Check out your performance on the Dimensions tab by hour of day and day of week and find the times when you are most and least profitable. Then in Settings > Ad Schedules, you can change your bids for those time periods, varying them by a percentage. This can help you focus your spend on the times when your visitors are most likely to convert.

9.Use Google Experiments

The thing with high ad positions in Google is that they can get a lot of clicks, but the conversion rate can also be worse. This is because a lot of ‘click-happy’ people just click on all the ads they can see, without reading your ad. Ads with lower position usually get more considered clicks, and the visitors through those ads usually have a higher conversion rate. If you’re not ready to drop your bid significantly, try Google Experiments, which will allow you to vary your bid for a percentage of your traffic. For example, drop your bid 30% for 20% of your ad impressions. Google will then tell you if the differences in any metrics (CPC, CTR, clicks, conversions, etc), are statistically significant.

10.Test Ad Copy

Click Through Rate is a big influencer of Quality Score, so to lower your CPC you want to get as good a CTR as possible. Constantly test and improve your ad copy to raise your Click through rates. Having said that, be careful not to sacrifice conversion rates for click through rate. (High CTR can sometimes work in opposition to conversion rates if they are encouraging lower qualified traffic or offering a promise your landing page doesn’t keep).

These 10 tips can go a long way to both reducing your cost per clicks and improving the quality of the traffic you get through your ads. If you’re in an expensive sector like financial services, these are things you need to implement in any active Adwords campaigns.

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