Google earns about $39 billion a year in revenue from paid search advertising. On average, each click cost advertisers about $2.69 in 2020.
Advertisers have a love-hate relationship with clicks. Without clicks on your ads, conversions can’t happen. But clicks can also quickly threaten to deplete your ad budget—if you’re not careful. For this reason, every advertiser dreams of reducing their cost per click (CPC). After all, the lower your advertising costs, the higher your return on ad spend (ROAS).
To decrease your CPC, you need to optimize every link in the advertising chain, from your keyword and bidding strategies to your overarching customer experience.
Too often, advertisers focus their optimization efforts on the pre-click stage of advertising campaigns. It’s a costly mistake, as clicks don’t equal conversions. By optimizing for clicks, you risk wasting your ad budget on paid traffic that ultimately fails to convert into customers. The post-click stage of advertising campaigns—where the conversion actually happens—also deserves our attention.
In our new ebook, we offer 20 creative ways to reduce your cost per click, which span the pre- and post-click stages of your advertising campaigns. Here we share three.
1. Create a post-click landing page for every keyword
Too many advertisers focus entirely on the ads themselves and fail to think about what happens after the click. Landing page experience plays a critical role in determining your Quality Score and CPC, and is therefore just as vital as your ads and keywords in keeping your costs down. In fact, by simply creating a tailored landing page for every one of your top search terms, you can reduce your CPC by as much as 50%.
The landing page doesn’t need to be completely different. You can certainly repurpose content from other landing pages. However, you want to do more than merely include the keyword phrase in the page title, headline, and throughout the page. Google’s analysis is sophisticated enough to dig deeper than that.
While it’s certainly a lot of work, it’s well worth the investment, particularly for companies that rely heavily on paid advertising. You can earn a 50% discount and avoid penalties of up to 200% by investing more time and effort into your post-click strategy.
2. Master negative keywords
To improve your relevance and boost your Quality Score, you should do everything you can to avoid appearing in irrelevant searches. That’s exactly what negative keywords are for.
Before you run your ads, use a keyword research tool like the Google Ads Keyword Planner to make a list of any keywords that may contain or closely relate to your target keywords that aren’t relevant to your ads. For example, if you’re a real estate agent advertising “ski properties,” you’ll want to avoid showing up for closely related but irrelevant keywords like “ski resorts.”
It pays to get creative here. Brainstorm as many negative keywords as you can and perform related searches to discover any irrelevant ads that may be showing up for those searches— then add them to your negative keyword list.
Once your ads are running, keep an eye on the search terms that are showing up. Add any irrelevant keywords to your negative keyword list as they roll in. To avoid having your ads appear in irrelevant searches, manage your negative keyword list as proactively as possible.
When your ads show up for more relevant searches, you’re likely to have a higher click-through rate, a factor that contributes to your Quality Score.
3. Be intentional about the positions you target
It’s enticing to aim for the top ad position. For ultra-ambitious business owners who succeed precisely because they’re so competitive, the thought of a major competitor’s ad appearing above theirs doesn’t quite sit right.
However, the first position starts to sound less attractive when you think back to the Ad Rank calculation. As we discussed earlier, your ad position is determined by your maximum bid and your Quality Score relative to those of your competitors. Therefore, if your Quality Score stays equal, the only way to rise through the ad positions is to increase your maximum bid.
As a result, one way to lower your CPC is by lowering your maximum bid and aiming for a lower ad position.
What are the implications of this strategy?
To start, your click-through rate (CTR) will drop as your ad position decreases. While you may expect around a 6% CTR in position 1, you may only expect a 2% to 3% CTR in position 3. So, by aiming for a lower position, you will see fewer clicks.
But remember: You only pay per click. If you’re in a high-volume search industry and you regularly spend your entire monthly budget, targeting a lower ad position can earn you more clicks for the same budget—lowering your CPC.
However, if you’re in a low-search-volume industry with a high expected ROAS per click, it may be worth it to bid higher for the top spot. Otherwise, you risk not receiving enough clicks or hitting your revenue targets.
Another consideration is that appearing in position 1 may result in receiving wasteful clicks. Click-happy searchers who are trying to get information quickly are far more likely to click position 1 than position 3 or later. Therefore, appearing in a lower ad position may result in higher-quality clicks and fewer window shoppers.
Evaluate what position makes sense for each of your top 50 search terms. If you don’t rank organically for a specific keyword, for example, and the keyword is vital to your business, it may make sense to pay a premium for the top spot. If you do rank organically, on the other hand, and the keyword is less vital to your business, you may want to consider aiming for positions two or three.
Which position you aim for will depend on your budget, industry, and goals. Experiment with setting your sights on different ad positions to see what produces the best results for your business.
Get all 20 strategies for reducing your cost per click
Google earns about $39 billion a year from paid search advertising. And if you don’t play by their relevance rules, it comes straight out of your pockets.
To help you get more from your ad spend, we’ve come up with 20 creative ways to reduce your advertising costs.
- In-depth explanation of how Google advertising works
- Ideas for how to adjust your keywords, targeting, and bids
- Strategies for delivering an unparalleled customer experience
- Ways to test and optimize your advertising campaigns
- How Post-Click Automation lowers your CPC