Embracing Cost Per Click: And Why You Shouldn’t Worry So Much About It
If you’ve ever signed into an AdWords account or seen a report from us lovely folk here at Attacat, you’ll be familiar with a prominent column labelled “CPC”. This column lists the average cost per click for everything from keywords and campaigns to ads themselves. It can be a handy column at times. Using this figure and conversion rate, you can calculate your average cost per conversion. You can also take the average cost per click and multiply it by the number of clicks on your ads to calculate your total spend in an account. Isn’t math fun??
But my cost per click is out of control! What do I do?!
Cost per click is a middleman in the AdWords world. It’s a floating figure that relies entirely on other performance metrics and the structure of the account to mean anything. Comparing them across accounts would be nonsense, but even comparing cost per clicks across ad groups in the same campaign can be a fruitless proposition. Each ad group is built from a specific list of keywords, keywords other people and companies are bidding on in a competitive auction. If there is a great deal of competition for a keyword, it’s going to be more expensive. That’s why keyword research can be such a powerful and successful use of time. That is, if you can find a keyword no one else is bidding on and pay very little for it, your cost per click will be low. Way to go, super sleuth! But that doesn’t mean you shouldn’t bid on those other, more-competitive keywords. If you can afford to bid on them and your account is on target in terms of return on investment, you should absolutely join in the fight for expensive keywords. Yes, your cost per click will go up. But if you’re making that money back at a level that you think is successful, you won’t notice it one bit. To break it down, Cost Per Click can be anything from 1p to, well anything – £100+ even! As long as your account is cost efficient, it just doesn’t matter.
So why do we have this column?
Cost Per Click is in every report we send out. Why do we do this? The simple answer is that it provides a nice level of context for the work that we do. After all, this is “pay per click” and it’s nice to know how much you’re actually paying for each click. Comparing your cost per click to your ad group or keyword bids can also give you a good idea of whether or not you bidding way too high for your market. Looking at this and average position together gives you a sense of what the competition is like.
When to care about your cost per click
Are you paying £2.00 per click when you think you should be paying £0.50 and still sitting in position 3 or 4? Depending on your market, you either might have some pretty tough competition or a terrible quality score. Has your cost per click mysteriously risen over the last few weeks? Check you haven’t raised your bids and forgotten about it. If you’re on CPA-bidding, Google could be pushing your bids automatically to compensate for more tracked conversions (yay!). Seeing a sudden and drastic drop in your Cost Per Click? Your Quality Score has either skyrocketed (yay!) or your bids could be so low that you’re only ever paying for clicks in very low positions. Make sure you’re not losing out on vital traffic from keywords you’ve paused or haven’t thought about adding and check you’re still tracking enough conversions to make your account profitable.
If you’d like to find out what the running rate for different keywords is in your market, try out Google’s shiny new Keyword Planner. Just for fun, I’ve put through a random assortment of keywords into the tool to give you an idea of how expensive (or inexpensive) they are:Cupcakes Edinburgh – £0.18 Womens Clothing – £0.31 Womens Dresses – £0.49 Mens Clothing – £0.61 Mens Trousers – £0.76 Twilight books – £0.35 James Joyce Ulysses – £0.02 (sigh…) Celebrity Gossip – £0.85 Health Insurance – £26.71
You might be wondering why men’s clothing keywords are more expensive than women’s clothing. Don’t women shop way more? Well, yes they do. But they also shop around more. Men looking to buy trousers online aren’t generally going to spend 2 hours browsing through a dozen sites to make sure they get the perfect pair. That is, this audience is FAR more likely to convert and as CPC is generally a reflection of much you might make from a click, advertisers are willing to pay more for these terms.
A high CPC can often indicate an opportunity for a high return, so learn to love its gentle and steady undulations. If all your other metrics are on track, your cost per click is probably right where it should be.