WordStream last week carried out some research on Google AdWords CPC prices of different sectors. One key finding was that the finance industry carried high CPCs of up to $54.91, while other service-related sectors such as education, law and health also exhibited expensive CPC prices of over $30.00.
Since CPC prices are often closely linked to the potential profitability of a sale from that keyword, the CPC price is often a mute point. A ‘bad credit history remortgage’ could be worth $15,000 profit to a remortgage broker, so having CPCs in excess of $50.00 can deliver a strong return on investment.
On the other hand, the keyword ‘New York weather’ has little commercial intention, so keywords such as this tend to benefit from low CPCs.
While this relativity of CPC prices makes CPC comparisons across sectors rather meaningless, most PPC advertisers would jump at the chance to pay lower CPCs. So below are 4 strategies I’ve found useful for achieving lower CPCs, while still maintaining a strong conversion rate.
Long-tail keywords are those highly-specific, infrequently searched-for phrases such as ‘all inclusive holidays to Paris from Sydney’, which turn up in your search query report. Since they tend to have less advertiser competition, they can be considerably cheaper than more generic keywords such as ‘Paris holidays’.
What’s more, since people making long-tail searchers have arguably carried out the large majority of their pre-purchase research, and are often further along in the buying cycle, long-tail searches can have a considerably higher conversion rate.
Cheaper CPCs and higher conversion rates were exactly what I found when analysing search queries containing different numbers of words. Searches containing 4 or more words performed consistently better than searches containing fewer than 4 words.
Keywords which have less competition often have lower CPCs. Finding keyword with less competition often requires you to think outside the box, although with the right tools and approach you can be diversifying your keyword portfolio in no time.
Modified Broad Match is a variation of broad match, but allows you greater control over the types of search queries which trigger your ads. By placing a plus (+) sign in front of certain words in your keyword, Google will only match your keyword to searches which contain all of the words with a preceding plus sign.
So if your keyword was ‘+cheap +deals to +Rome’, you can be sure than any searches matching to your keyword must contain the words ‘cheap’, ‘deals’, and ‘Rome’.
Modified broad match is a great way to improve the quality and profitability from your AdWords campaigns. In some recent research I carried out on modified broad match keywords, keywords with a greater amount of broad match modification tended to have considerably higher CTRs and significantly lower CPCs.
Despite PPC often being dubbed as saturated and highly-competitive, the truth is there are massive opportunities everywhere for PPC advertisers to achieve high profitability by providing highly-relevant and helpful ads, which engage with their target audience.
Searches on Google are now becoming increasingly diverse, complex, and unique, and users are expecting a higher degree of relevancy and helpfulness from search results. If you can be the advertiser which caters for the specific needs and requirements of searchers, visitors will reward you with their wallets. And since click through rate (CTR) is a large component of Quality Score, if you can achieve a high CTR, low CPCs will naturally follow.
Quality Score doesn’t sell anything. Click through rate doesn’t sell anything. CPCs don’t sell anything. Improving these metrics should not be the objective of your campaign. Improving ROI should be.
All other things equal, if you reduce your CPCs by 20%, great!
But are all other things equal? In trying to reduce your CPCs, have your sacrificed volume? Have you sacrificed quality? Are paying lower CPCs simply because visitors are now less relevant and less likely to convert? Are you now missing out on more relevant and potentially more profitable searches?
CPCs or Quality Score or CTR should not be the end goal of your PPC campaign. Return on investment should be. There’s no harm in paying 50% higher CPCs if your profit increases by 60%. So only use CPCs as a guide.
By all means use long-tail keywords, search query reports, and modified broad match as a means to lower your CPCs. But make sure your sales volume and ROI also rises as a result.