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CPC and conversion costs are double what they were the last two years

Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

I am hoping to get some strong advice in this forum.

 

I have an online business - I have been online and using Google Adwords for nearly 10 years.  In the beginning, the costs were managable and we were growing very fast each year.  I was spending the same amount each year with no sigfincant increases and comfortable with the monthly spend.  

 

I have always had a company to manage my Adwords Campaigns because it is something that as a business owner that I feel should be outsourced to people to have a much better understanding than I do - plus I need to spend my time focused on sales.  

 

The last three years, I had been spending between $6000-$10,000 a month on PPC costs - and this has always been my only source for driving traffic to my website.  In the last four months, I have gone from spending around between $6000-$10,000 a month - to over $15,000 a month.  My PPC company says that the CPC in my industry has doubled in the last three months.  What I want to know is if this is across the board, or just specific to my industry.  

 

I am having the hardest time accepting that last year and the three years prior, my costs were always about the same, increasing some each year, but not doubling each year.  Now the costs are double what they were - last year, I was paying on average $15-$20 p/ conversion on my website - now I am paying $30-$50 p/conversion.  This just does not feel right to me.

 

If someone could give me some insite as to why this is happening and what can be done to get my costs and montly spending back to my prior costs, I would be very grateful.  What I am hearing from my PPC managment is that there is nothing to be done and this is just how it is.....

 

thanks in advance for your advice...


3 Expert replyverified_user
2 ACCEPTED SOLUTIONS

Accepted Solutions
Marked as Best Answer.
Solution
Accepted by Zee (Community Manager)
September 2015

Re: CPC and conversion costs are double what they were the last two years

Top Contributor
# 4
Top Contributor

Hi,

 

Take a look here and I bet you'll find numerous agencies that will be able to take a look at what you have going on.

 

https://adwords.google.com/professionals/search/

 

I agree with your concerns and I feel for you, very unfortunate. 

 

-Tom

Tommy Sands, AdWords Top Contributor | Community Profile | Twitter | Philly Marketing Labs
Did you find any helpful responses or answers to your query? If yes, please mark it as the ‘Best Answer.’

View solution in original post

Marked as Best Answer.
Solution
Accepted by Zee (Community Manager)
September 2015

Re: CPC and conversion costs are double what they were the last two years

Top Contributor
# 8
Top Contributor

Like some mentioned here CPC's have been going up for lots of industries - I know the travel industry has been impacted by economic issues and with less people travelling these days the competition and cost per conversions are increasing for many travel related businesses.  You may want to try a tool like Google Insights for Search or something similar to see trends over the last several years for your popular keywords and compare these trends to your account performance.

 

So are you still converting at the same rate or has the cost per conversion increase coming directly from higher Cost Per Click?

 

If it is coming from CPC only then look at the account quality scores and see if they have dropped for some reason causing higher Cost Per Click to be necessary to maintain a good AdRank.  Quality Score X Max Bid = AdRank and AdRank determines your position in the auction.

 

 

 

 



Kim Clink, AdWords Top Contributor | Community Profile | Twitter | Clink Digital Marketing
Did you find any helpful responses or answers to your query? If yes, please mark it as the 'Best Answer.'

View solution in original post

Re: CPC and conversion costs are double what they were the last two years

Top Contributor
# 2
Top Contributor

Hi sprite1406,

 

Although I cannot speak intelligently about and unknown industry (you didn't specify), I can assure you that there are industries that have seen significant increase in competition across the years.  Also, I have some clients that are in a seasonal businesses and the differences in cost between the on and off season are sometimes double as the whole industry ramps up at the same time. 

 

That said, I'm not convinced that these situations should always result in a big increase in costs. 

 

I would wish for you that you could get a better response than "it is how it is". 

 

Do you have access to your account that you may be able to have another party take a look and see if there is any room for improvement?  Even the best laid out campaigns can afford some improvement.   

 

So sorry to hear about your situation and good luck!

 

-Tom

Tommy Sands, AdWords Top Contributor | Community Profile | Twitter | Philly Marketing Labs
Did you find any helpful responses or answers to your query? If yes, please mark it as the ‘Best Answer.’

Re: CPC and conversion costs are double what they were the last two years

Visitor ✭ ✭ ✭
# 3
Visitor ✭ ✭ ✭

Thank you for your reply.  I operated an online travel business - specifically for custom designed European travel.  I am fully aware of how competitive my industry is online and with Adwords, however, like I said, we have maintained similar spend for the last 4-5 years without more than a $10k a year increase. 

 

My issue is that I went from spending $8000 or so a month, to $15,000 a month and our cost per converions were averaging around $15-$20 a month and the last two months, have completely doubled.  I would LOVE for someone to look at my account and campaigns and give me a new perspective and feedback.  I am not sure WHO this person would be, however, as I am very protective of this information as it is the only source driving traffic to my website.  

 

I am just looking for a professional opinion - if what I am spending currently is accurate for the keywords we are targeting or if I am being told something that is not completely true.  Any suggestions or advice is appreciated!!

Marked as Best Answer.
Solution
Accepted by Zee (Community Manager)
September 2015

Re: CPC and conversion costs are double what they were the last two years

Top Contributor
# 4
Top Contributor

Hi,

 

Take a look here and I bet you'll find numerous agencies that will be able to take a look at what you have going on.

 

https://adwords.google.com/professionals/search/

 

I agree with your concerns and I feel for you, very unfortunate. 

 

-Tom

Tommy Sands, AdWords Top Contributor | Community Profile | Twitter | Philly Marketing Labs
Did you find any helpful responses or answers to your query? If yes, please mark it as the ‘Best Answer.’

Re: CPC and conversion costs are double what they were the last two years

Top Contributor
# 5
Top Contributor

Hi sprite1406,

 

Do you have access to your AdWords account at any level? Can you log into your AdWords account, or is it completely controlled by your agency? What kind of reports do you get form the agency?

 

If you are not able to log directly into your AdWords account, I wuold contact the agency and insist on access, even if just read-only access. If they refuse, threaten to move your account.

 

From your post, I gather you are not quite trusting what your agency is telling you. Ask them to prove it to you by showing you the numbers and by granting some sort of access to the account.

 

If you do have access, look at the campaign data. It can tell you your average cost per conversion. If not, the whole thing wasn't set up very well.

 

That's about my best advice for you at this point.

 

Best of Luck!

 

Pete

 

 

petebardo -- Deadhead doing AdWords

Re: CPC and conversion costs are double what they were the last two years

Visitor ✭ ✭ ✭
# 6
Visitor ✭ ✭ ✭

No, I have full and complete access to the data - I look at it on a daily basis.  I do get a montly report from them and if I wanted to restrict their access immediately I could.  My problem is that I just do not have time to fully understand all of the data that is presented to me on the Adwords platform...

 

I know enough to get by, but not enough to manage it myself or to turn things around.  I have gone through 3 different companies to manage this for me, but I have never had the costs increase like this.  I expect these costs to increase some over the year or so, but not full out double the price....

 

 

Re: CPC and conversion costs are double what they were the last two years

Explorer ✭ ✭ ☆
# 7
Explorer ✭ ✭ ☆

Did you check: Opportunities >> Analyse competion ?  

(!! only works if your  Adwords Account dashboard is set to English !!)

Marked as Best Answer.
Solution
Accepted by Zee (Community Manager)
September 2015

Re: CPC and conversion costs are double what they were the last two years

Top Contributor
# 8
Top Contributor

Like some mentioned here CPC's have been going up for lots of industries - I know the travel industry has been impacted by economic issues and with less people travelling these days the competition and cost per conversions are increasing for many travel related businesses.  You may want to try a tool like Google Insights for Search or something similar to see trends over the last several years for your popular keywords and compare these trends to your account performance.

 

So are you still converting at the same rate or has the cost per conversion increase coming directly from higher Cost Per Click?

 

If it is coming from CPC only then look at the account quality scores and see if they have dropped for some reason causing higher Cost Per Click to be necessary to maintain a good AdRank.  Quality Score X Max Bid = AdRank and AdRank determines your position in the auction.

 

 

 

 



Kim Clink, AdWords Top Contributor | Community Profile | Twitter | Clink Digital Marketing
Did you find any helpful responses or answers to your query? If yes, please mark it as the 'Best Answer.'

Sounds about right ... for a monopoly

Visitor ✭ ✭ ✭
# 9
Visitor ✭ ✭ ✭
Google's a dominant force online when it comes to PPC. Can honestly see no real reason why costs would skyrocket. Surely their overhead and operating costs haven't been following suit. ... Well other than increased profits going to the provider of Adwords. Like any other profit driven enterprise Google Inc is going to push the envelope in their favor. Whatever the market will bear definitely applies to PPC, as it does in any industry. Guess it's just a matter of them balancing how much they can take without making Adwords an unprofitable medium for small and medium operators. Not that I'd consider 10-15k/mnth anything like small. Am sure you've been exploring options. If not ... at those costs organic ( SEO), atlernative PPC platforms and other online marketing methods are probably starting to look more viable to you now. Guessing Adwords works great, when it's working. But still can't help but think of that old saying about all eggs in one basket. Kind of hesitate to offer advice, cause am detached from your situation. A few come to mind, but not like this is a subject someone could type just do A, B and step C and you'll be golden again. Might put the hammer down on whoever's managing your adspend though, unless you're absolutely sure everything that can be done to maximize return and cut down adspend is being done. The whole split testing, site and landing page analytics and conversion tracking/tweaking, even at 10 grand a month, that's no small PPC management contract for whichever company's involved. That adspend should definitely buy you some wo/man hours devoted to your Adwords campaigns. Baring in mind this is obviously just babble from an anonymous netizen on a Adwords Community site. Worth a grand total of less than .02 cents overall.