Over time we PPC managers make changes to our campaigns based on recent and longer date-range performance trends - what is converting best for me now? Keyword bids get bumped up to increase conversions. Competitors enter the market and bids are increased to maintain our strong ad position.
Whatever the cause, often CPC will slowly creep (and for those non-nerd folk out there, that green thing in the picture is a Minecraft "Creeper") higher and higher over time. Quite the opposite of what we PPC pros are striving to achieve! So, how can you stem this tide of CPC creep? First of all, make sure you are reviewing data trends over long periods of time. Often we get blinded by looking at recent data - past seven days, month-to-date, past 30 days, etc., etc...
That’s great and is often an important part of the bid optimization process. However, what is happening with the big picture? Where are your keywords trending over the past six months? The past year? Looking at your data in this way will help put CPC trends (and other important KPIs) into perspective. Take the following graph for example. Over a six-month time period, average position remained flat while CPC rose by $3 on average. Looking at just one month or just a week’s worth of data wouldn’t show this drastic rise in CPC.
Once you understand whether or not you have a CPC creep issue, then you can settle in and prepare to apply strategic changes to reverse the trend.
- Focus on Fundamentals: Go back to the basics with an eye on Quality Score. Granted, we know that Quality Score is designed to be a "diagnostic tool." But that doesn’t mean you can’t strive to improve it over time. Look for correlations between Quality Score decreases and CPC increases. That’s a clear sign something is wrong. Get to work on ad testing for click-through-rate improvement and pay close attention to keyword relevancy factors across your ads, ad group segmentation, and search query reports.
- Rock the Long Tail: Get out there and exercise your keyword research and keyword expansion brainstorming chops. If the head terms or mid- to long-tail keywords you’ve been using are suffering from inflated CPCs, dig up some new juicy long-tail keywords. Higher click-through-rate. Lower CPCs. Bing, bang, boom.
- Automated Bid Rule Review: Automated bid rules and algorithms are great tools for PPC managers. However, those rules will only be as effective as you allow them to be. It is important to frequently review your rules (the actual parameters) and the impact they are having on your keywords and campaigns. Are you achieving the desired outcome?
- Dig Deep Into Search Queries: Are your high-CPC keywords pulling in high-cost, but irrelevant queries? Block them with negatives. Are your high-CPC keywords matching to relevant, but crazy expensive queries? Create new ad groups to isolate these terms and adjust the bids accordingly.
- Isolate the Problem Children: Nobody puts baby in a corner! Well, in this case, you should. While this tactic doesn’t necessarily decrease CPCs, by isolating high-CPC keywords into unique campaigns or ad groups you can more easily segment them in reporting and delegate optimization tasks for those keywords.
- Deep-Dive Ad Position Analysis: Sometimes the ad position you have currently is not the ad position you should maintain long-term. Run a deep-dive analysis comparing max CPC vs. ad position vs. conversion rate/CPA (or your conversion metric of choice). What ad position allows you to maximize conversions and CPC? The answer might surprise you.
- Diversify Your Traffic: There will be times when you simply can’t get those CPCs down. Increased competition, bidding wars, you name it – it happens. To level things out for your digital advertising portfolio, try looking at new channels to diversify your traffic. Display, social ads, etc., all offer the potential for relevant, low CPC traffic.
CPC creep sucks. There’s no two ways about it. But it is your responsibility as a PPC manager to seek out and understand when this is happening and take action. Happy hunting and the CPCs be ever in your favor!