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Ashley Mabery

Ashley Mabery Director | Retail Performance

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High Cost-Per-Click

In the pay-per-click world, value is derived from how inexpensively a lead can be acquired.  Many times, a low cost-per-click combined with a high conversion rate can indicate a winning formula.  However, sometimes it can seem like a campaign is averaging a high cost-per-click.   There are many factors that affect this cost, but the two easiest to understand and control are competition and quality score.

Competition refers to how many other advertisers in a similar industry are bidding on the same keywords.  If an advertiser is experiencing a high cost-per-click on a particular keyword, all other things being equal, it could be an issue of the keyword being very popular among local advertisers.  If a keyword search yields a ton of ads on the SERP (search engine results page), then it is obvious that there are many others bidding on the same terms, driving the cost up.  At this point, the advertiser should consider if it is worth it to pay the high cost-per-click.   If the ROI doesn't add up, it may be time to stop bidding on that keyword or choose a similar keyword with less competition.

Quality score has a number of components, but typically the main ingredients are relevancy of keywords, ads and landing pages along with bid.  If a high cost-per-click is occurring on an otherwise low competition keyword, an advertiser should review their quality score on the keyword to determine if an improvement could yield a lower price.  Better keyword grouping and more relevant ads and landing pages can make your ads more relevant in Google's eyes, which means lower rates!  Also, more relevant ads generally result in higher click-through rates, which also affect quality score in a positive way (historical CTR and conversion rates are both factors).

Overall, there are several reasons why a keyword might be suffering from a high cost-per-click, but the two easiest to address might just be competition and quality score.  What are some ways you all use to lower your CPC's?

Nathalie Godoy
Great points Ashley! Thank you for explaining the difference between competition and quality score. To your point, these two factors are the two easiest to understand and take control over.
Carl Maeda
Good article Ashley! You briefly mention this later but Click Through Rate (CTR) is also one of the main ingredients of Quality Score along with relevancy and the landing page. To decrease CPC, along with increasing Quality Score, we create more exact and phrase match campaigns and only use broad match to find new keywords. With exact match and phrase match keywords, you can more highly tailor the ad and landing page to the keyword. This results in high quality score, low cost per click and a low cost per lead. We manually write our ads and integrate specials and incentives in our ads to make them more compelling. (Which increases CTR and decreases CPC) We try (if we have control of the site) to include the ad text in the landing page to increase landing page relevancy. This increases quality score but it usually (not always) also increases the conversion rate. But ultimately, for most clients, cost per lead is the way we measure the success of our PPC campaigns.

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