Many conversations surrounding Pay Per Click (PPC) are focused around lowering the Cost Per Click (CPC) of well performing campaigns. As PPC grows more competitive each year, cutting spends is becoming essential to maintaining profitability. After all, it’s one thing to have quality leads, it’s another if you’re paying an arm and a leg for them.
A lower CPC enables you to do more with your budget like experimenting with keyword lists and untapped markets. Having a low CPC is also a broad measure of efficiency and focus in an account. The more precise your targeting and groupings, the more effective your account is in generating leads.
To get you started on better managing your budget, here are 5 tips to lowering your CPC:
- Understand Your Quality Scores
One of the most important metrics to become familiar with is Quality Score. It is the estimated quality of the relevance between your Ad Copies, keywords, and landing pages. It is also one of the major factors that are used to calculate your CPC. The factors used to calculate your CPC is:
CPC = The Ad Rank of the Competitor Below Your Own / Quality Score + 1¢
Since the Quality Score is your divisor, it is essential to keep this score high for a lower CPC. The key is to understand how your Ad Copies and landing pages relate to your keyword list.
- Experiment with Ad Copies and Landing Pages
If the keywords in your Ad Group earn a high number of clicks and have poor Quality Scores, making adjustments to its Ad Copies can help lower its CPC. Remember, Quality Score determines the relevance of your keywords to its Ads. Working on the wording of your Ad to better reflect your keywords can help keep CPC low.
A more drastic experiment is making changes to the landing page content. Similar to Ad Copies, the more relevant your keywords are to the landing page the higher its authority with search engines. If changes to the landing page can’t be made, then the best course of action is to run split tests on available pages.
- Experiment with Keywords
Expanding your keyword lists is a best practice for many reasons. We wrote a separate blog with tips on PPC Keyword Research Tips that help generate leads. Circling back to spends, experiment with keywords allows you to test cheaper keywords in unexplored markets.
There are many ways to go about experimenting with keywords, but in all they follow two paths – polishing your list and introducing new keywords.
Polishing Your List
Having too broad of a keyword list can lead to unqualified leads and poor quality clicks. Keyword match types can help filter out the unwanted traffic to only the leads and clicks that provide value. Also, regularly adding negative keywords with their own match types can also further filter your PPC traffic.
Introducing New Keywords
Conducting new keyword research can be challenging. However, if the account has reliable search queries, then the research becomes easier. Search queries offer insight on the searches used by your leads. Start there and gradually move out into synonyms, alternative industry wording, and long tail keywords to expand the range of your Ads.
- Lower Your Bids
Lowering bids may seem intuitive when optimizing CPC, but like everything else in PPC, there are some factors to take into consideration. As a rule of thumb, you’ll always want to bid higher than your competition. However, there are times when you can bid down and capture the same quality traffic at a lower cost.
If a keyword sits at an average position that is greater than 3 and is constantly meeting its daily budget, then that keyword is a candidate for lower bid. If you’re meeting your daily budget, then the keyword is successfully winning the day’s traffic. Bidding down may alter its average position, but sacrificing a few potential clicks will allow your Ads to show for longer.
- Set a Schedule
Scheduling your Ads to only show during high quality hours of the day is an underutilized method of optimizing CPC. If you find your campaign spending half of its daily budget before local business hours, then that’s a strong indicator of unqualified traffic targeting your Ads. Targeting specific hours of the day may lead to a slightly higher CPC, but having qualified traffic will lead to an overall lower spend for leads.
Take into consideration what the peak hours are for your industry. For most, this will be around lunch time. For industries in international markets, further segmentation by region may be necessary to better focus your daily budget.
While CPC isn’t the end-all method to an efficient PPC campaign, having a firm control over your budget is always a best practice. Keep in mind that competitive keywords with high CPCs may have the best conversion rates. Redirecting your budget to more effective keywords can help boost your lead generation while keeping spends relatively low.
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