“I deactivated Google AdWords because the cost per lead was too high.” This line from Neil Patel’s blog post, “What spending $ 66,372.09 on paid advertising taught me“, offering different pay-per-click (PPC) methods, still resonates after four years because it highlights a common problem: The pay-per-click model wants us to throw away a lot of money.
In case you haven’t noticed, you (and many other advertisers) recently paid more for PPC campaigns than before.
Average PPC costs (cost per click, cost per mile, cost per conversion, etc.) have increased in recent years, according to a survey of 50 advertisers on the Google AdWords advertising network by Hochman Consultants:
And so we find ourselves in a difficult situation: rising costs make PPC advertising appear as if it is the black sheep in the digital advertising world; at the same time, it’s an easy way to get visitors to your website / landing page when they are looking for specific key phrases.
And case studies show that advertisers have been able to use it to increase conversions in a short time.
So, stopping your PPC campaigns might not be a good idea.
Fortunately, you don’t have to do this if you can lower your PPC costs.
But how can the costs be minimized? If you can’t think of doing anything other than lowering your bid, here are four PPC cost reduction tips that you may find very helpful. (To note: Google killed ads on the right, so the following tips only apply to ads that appear at the top of search results.)
1. Harness the power of Quality Score
Google uses Quality Score (QS) to determine where advertisers rank in search engine results pages (SERPs) and how much they spend. It forces advertisers to prove their relevance, and it’s a way for small businesses to pay less for the most important keyword positions.
These factors affect your quality score:
- CTR (click-through rate)
- Relevance of the text of the advertisement
- Landing page quality
- Campaign performance history
- Relevance of ad group and selected keyword
A higher Q of S gives you better ad rank, and it could qualify your ad to rank higher than advertisers who bid higher than you. And WordStream Larry Kim found that a higher QS decreases the cost per click and the cost per conversion:
To increase your Quality Score, use the following:
- Long tail keywords: Categorize them into specific groups that can be effectively linked to ad campaigns. You can add branded and negative keywords (phrases or words that you don’t want to show ads for) to further refine your keyword list.
- Ad extensions: Call extensions and other options give your ad more space, so at no additional cost, it has a better chance of attracting clicks.
- Landing page best practices: For example, you need to rearrange the content to put the most valuable content first. Get rid of phrases that aren’t absolutely necessary to stay focused on the visitor. Also, make sure the CTA is clearly visible and visitors don’t have to scroll to see the calls to action. You should also pay attention to the loading time; Aim for a charging time of less than 1 second. (Read how we at Duda optimized landing pages when serving paid social media campaigns.)
2. Use hourly / advertising programming
In a perfect world, you can put your PPC ad campaign on the hamster wheel with an unlimited budget, showing ads to bargain hunters, comparison shoppers, and even the sleepless crowd.
But when you are on a strict / limited budget, you want to attract clicks from people who are more likely to convert. Fortunately, Google AdWords has a feature that you can use to schedule ads for specific times of the day. It’s called dayparting (a fancy name for personalized ad scheduling).
With dayparting, you can display ads at a time when your target audience is more likely to click. For example, if you manage a food chain that receives 90% of its takeout orders after midnight, you might run a PPC ad with a call extension from 12:00 p.m. to 4:00 a.m.
To use dayparting, go to âCampaign settingsâ and select âScheduling and serving adsâ and click the red â+ add scheduleâ button. There will be a grid for each day and a âBulk Editâ option that allows users to manage weekends and weekdays simultaneously.
How does dayparting reduce PPC costs? It shows the hours when your target audience is most active. Then, when you fine-tune your campaign to show ads at optimal times, you benefit from a lower cost per acquisition.
It also offers a good opportunity to increase bids at peak times and keep ad spend to a minimum (or zero) during off-peak hours.
To be successful with dayparting, measure your conversion activity over a period of time to see when the most clicks are occurring and plan your campaign accordingly.
3. Optimize campaigns with geographic targeting
Just as you can limit your ad to certain times of the day, you can limit it to certain geographic locations with a tactic called geotargeting. It allows you to target countries, states, cities, regions, neighborhoods, etc.
When you select placements with a large audience size for your campaign, such as an entire country, your reach is broadened. It’s okay if you have a lot to spend, but small businesses need to maintain some control in order to reach the places that best meet their goals.
With location targeting, you can spend more on the best performing locations and less on the worst performing locations. When you target a location, Google will also show ads to people nearby, closely related locations that are normally not targeted due to insufficient location data or low population.
To set up location targeting in AdWords, open the âCampaignsâ tab, then select the campaign you want to edit. Choose “Settings,” then click “Edit” next to “Locations.”
Kristina McLane of PPC Hero reported that it has been successful with ads that directly refer to a city: city-specific ads have seen a 25% increase in click-through rate. Also, they keep costs down because you rule out unprofitable locations.
4. Keep an eye out for “broad match” terms
Save yourself from a terrible financial misstep by keeping an eye out for these general terms. While these are great for relevant keywords, not all searches are relevant, and if people can’t find what they need, you’re essentially spending on a higher bounce rate.
So, if there are some keywords that don’t convert as well as others, you can enter new broad match terms for them and test to see if it still makes sense to include them in a campaign.
But if keywords continue to have low CPCs and CTRs, it’s best to pause them and replace them with more relevant ads and keywords. Discipline yourself to frequently measure keyword performance and eliminate poor performing terms.
And while you implement this strategy, use the CPC Optimizer to automate bid optimization and maximize conversions. This will help you maintain some manual control while reducing CPA (cost per acquisition).
Also make sure you have activated conversion tracking. It helps you see what works and what doesn’t, so you can channel your marketing spend towards keywords and match terms that deliver positive ROI.
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Every PPC campaign has times when it is on shaky ground. Sometimes advertisers just struggle to do more with less.
But what if taking the risk of any of the tips mentioned above could result in, say, 25% savings?
With a lateral mindset, you should be able to design a PPC campaign that attracts high converting visitors at a much lower cost. The faster you make changes to your campaign, the faster you can pave the way for pay-per-click success.