Anyone advertising on Google for a period of time will have noticed their CPCs rising. In some cases this can be as much as 25% in a year.
Why have average CPC’s risen so sharply?
Simply put, competition has increased. More and more advertisers are seeing the benefit of advertising through AdWords. With increased competition comes increased bids (remember AdWords is an auction system) and therefore CPCs have risen. AdWords only displays eleven text ads per page (plus five or ten ads in Shopping campaigns) and so competition to appear in those eleven spaces is fierce.
What can I do about it?
There are a number of things you can do to counter increased click costs.
1, Quality Score. Work on your quality scores, this will actually bring your CPC down. It’s time consuming to do this, but will improve your performance overall.
2 Focus on another metric. If you are an e-commerce site, then the metric most important to you should be your CPA (cost per acquisition) rather than your CPC. Bring down your CPA and you reduce your cost of sale – which is what you should be interested in.
3 Get smart. Start using some of the more advanced AdWords features to segment your account further. Time of day and device reports can help you reduce unnecessary spend and improve your account performance.