AdWords is now Google Ads. Our new name reflects the full range of advertising options we offer across Search, Display, YouTube, and more. Learn more

Ads
3.2K members online now
3.2K members online now
Get started with Google Ads - learn the basics to get set up for success
Guide Me
star_border
Reply

Why does the max. CPC price for a keyword keep increasing daily?

Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

I have only been running my first campaign for four days. I have only one keyword that was originally 0.30 for first page status but the cost per click to maintain the status has increased at least daily. It is now 0.39 and I have paused the keyword and it looks like the cost is likely to increase again if I re-enable it. Why are these cost increases happening so often?  Apart from the fact that I have enabled the keyword and agreed to the cost quoted only to have it change, it also means that I have to constantly check my account to make sure the campaign is running as intended. There are very few choices of keywords that are worth paying for in my category so this is very disappointing.

2 Expert replyverified_user
4 ACCEPTED SOLUTIONS

Accepted Solutions
Marked as Best Answer.
Solution
Accepted by MosheTLV (Top Contributor)
September 2015

Re: Why does the max. CPC price for a keyword keep increasing daily?

[ Edited ]
Collaborator ✭ ✭ ✭
# 2
Collaborator ✭ ✭ ✭

Hello Clare M and welcome to the Community !

 

"Why are these cost increases happening so often? "

 

You have to optimise your account a little and start analyzing certain aspects :

 

1) Has my QS decreased ?

2) Has my CTR decreased ?

3) What search terms are people using that match my keyword and makes them click ? Take a look at the search terms report

4) What negative keywords can I add to make my keywords more relevant to the search queries ?

 

[Later edit]

You can also search for similar discussions in the community pages and browse through the solutions given

 

https://www.en.adwords-community.com/t5/forums/searchpage/tab/message?filter=labels&q=cpc+increase

 

It is a good ideea to link your analytics account to your adwords account too in order to analyse more the searching behaviour 

 

https://support.google.com/adwords/answer/1704341?hl=en

View solution in original post

Marked as Best Answer.
Solution
Accepted by MosheTLV (Top Contributor)
September 2015

Re: Why does the max. CPC price for a keyword keep increasing daily?

Top Contributor
# 4
Top Contributor

Hello, Clare.

 

If you're stating that you're a new advertiser, I believe you might have resorted to automatic bidding in your settings (https://support.google.com/adwords/answer/2470106?hl=en).

 

As you probably know, AdWords does not use bids alone to rank ads, but rather Ad Ranks (which are in fact Quality Score x Bids).

 

When you're starting to use a keyword, you start with a historical baseline Quality Score. Let's assume you start with a 6 as a quality score. On automatic bidding the system needs, initially, 0.35 to get your ads to show in a position which could get you as many clicks as possible. But that only happens for a while. If your ads get a lower clickthrough rate than your competition's, the system lowers your quality score. And then, the automatic bidding feature kicks in again, and raises the bids to keep your ad showing.

 

As far as I can tell from what you said, I'd say that your ads need more work, your keywords possibly need more work in order to get them as related to the ads as possible, and your bidding system should move from automatic to manual.

 

When moving to manual, if your ads still do not perform, you will not see an increase in CPC, but you may see a decrease in position and CTR up to a point when your QS decreases so much that your Ad Rank (bid x Quality Score) is no longer high enough to show your ad on the first page.

 

Of course, all my dissertation above is useless if you're not using automatic bidding ... Smiley Happy.

Calin Sandici, AdWords Top Contributor | Find me on: Google+ | Twitter | LinkedIn | myBlog
Was my response helpful? If yes, please mark it as the ‘Best Answer.’ Learn how here.

View solution in original post

Marked as Best Answer.
Solution
Accepted by topic author Clare M
September 2015

Re: Why does the max. CPC price for a keyword keep increasing daily?

Visitor ✭ ✭ ✭
# 5
Visitor ✭ ✭ ✭

Thanks Calin but I am not using automatic bidding. Just checked a new keyword I tested yesterday. The Max CPC for front page status was 0.20 yesterday and has increased to 0.35 today. A 75% increase in cost for the same keyword within one day - and there were zero clicks so it was clearly not a popular key term. In fact, according to the keyword tool analysis on the AdWords site 0-1 clicks were to be expected for the keyword. Average CPC was estimated on the keyword tool at 0.07 - 0.08 so the cost of the original MAX CPC and subsequent 75% increase is difficult to justify. And again, I agreed to pay the cost for front page status and the keyword has dropped off again. I have read the highly technical advice in response to my question and I will try to grapple with it. The issue from my perspective is not the quality of my campaign. My preferred keyword is working well in terms of clicks so I am not doing too badly for a beginner. I am concerned that the cost of the campaign will continue to increase given the price rises so far. I will be speaking to a Google expert next week so I will close off the discussion for now. Thanks again to all who contributed.

View solution in original post

Marked as Best Answer.
Solution
Accepted by topic author Clare M
September 2015

Re: Why does the max. CPC price for a keyword keep increasing daily?

Top Contributor
# 10
Top Contributor

Clare, if you're happy, we're chuffed Smiley Happy. You too, have a great weekend and get back to us with updates whenever you can find some time. It's nice to see success stories sometimes (and I'm sure that in time yours will turn into one of these), especially when you consider that many times people who have problems talk about them, but when things are going well they don't feel the same need.

Calin Sandici, AdWords Top Contributor | Find me on: Google+ | Twitter | LinkedIn | myBlog
Was my response helpful? If yes, please mark it as the ‘Best Answer.’ Learn how here.

View solution in original post

Marked as Best Answer.
Solution
Accepted by MosheTLV (Top Contributor)
September 2015

Re: Why does the max. CPC price for a keyword keep increasing daily?

[ Edited ]
Collaborator ✭ ✭ ✭
# 2
Collaborator ✭ ✭ ✭

Hello Clare M and welcome to the Community !

 

"Why are these cost increases happening so often? "

 

You have to optimise your account a little and start analyzing certain aspects :

 

1) Has my QS decreased ?

2) Has my CTR decreased ?

3) What search terms are people using that match my keyword and makes them click ? Take a look at the search terms report

4) What negative keywords can I add to make my keywords more relevant to the search queries ?

 

[Later edit]

You can also search for similar discussions in the community pages and browse through the solutions given

 

https://www.en.adwords-community.com/t5/forums/searchpage/tab/message?filter=labels&q=cpc+increase

 

It is a good ideea to link your analytics account to your adwords account too in order to analyse more the searching behaviour 

 

https://support.google.com/adwords/answer/1704341?hl=en

Re: Why does the max. CPC price for a keyword keep increasing daily?

Visitor ✭ ✭ ✭
# 3
Visitor ✭ ✭ ✭

Hi! Thanks for your welcome and helpful hints but I still do not understand why the cost keeps increasing on the same keyword. People are clicking on the keyword although the number of clicks are limited by my budget. I set up my campaign so that I am paying the amount necessary to be on the first page. Then I check later in the day and my ad has dropped off in terms of first page eligibility and I need to pay more. So I believe I have set my ad up correctly and then find the rules have changed without my knowledge. On each day of my four-day campaign so far, the cost for the same keyword has changed. I am monitoring performance on Google Analytics and with other software. So far, not a single click has led to a sale however the cost of the ad is increasing daily.

Marked as Best Answer.
Solution
Accepted by MosheTLV (Top Contributor)
September 2015

Re: Why does the max. CPC price for a keyword keep increasing daily?

Top Contributor
# 4
Top Contributor

Hello, Clare.

 

If you're stating that you're a new advertiser, I believe you might have resorted to automatic bidding in your settings (https://support.google.com/adwords/answer/2470106?hl=en).

 

As you probably know, AdWords does not use bids alone to rank ads, but rather Ad Ranks (which are in fact Quality Score x Bids).

 

When you're starting to use a keyword, you start with a historical baseline Quality Score. Let's assume you start with a 6 as a quality score. On automatic bidding the system needs, initially, 0.35 to get your ads to show in a position which could get you as many clicks as possible. But that only happens for a while. If your ads get a lower clickthrough rate than your competition's, the system lowers your quality score. And then, the automatic bidding feature kicks in again, and raises the bids to keep your ad showing.

 

As far as I can tell from what you said, I'd say that your ads need more work, your keywords possibly need more work in order to get them as related to the ads as possible, and your bidding system should move from automatic to manual.

 

When moving to manual, if your ads still do not perform, you will not see an increase in CPC, but you may see a decrease in position and CTR up to a point when your QS decreases so much that your Ad Rank (bid x Quality Score) is no longer high enough to show your ad on the first page.

 

Of course, all my dissertation above is useless if you're not using automatic bidding ... Smiley Happy.

Calin Sandici, AdWords Top Contributor | Find me on: Google+ | Twitter | LinkedIn | myBlog
Was my response helpful? If yes, please mark it as the ‘Best Answer.’ Learn how here.
Marked as Best Answer.
Solution
Accepted by topic author Clare M
September 2015

Re: Why does the max. CPC price for a keyword keep increasing daily?

Visitor ✭ ✭ ✭
# 5
Visitor ✭ ✭ ✭

Thanks Calin but I am not using automatic bidding. Just checked a new keyword I tested yesterday. The Max CPC for front page status was 0.20 yesterday and has increased to 0.35 today. A 75% increase in cost for the same keyword within one day - and there were zero clicks so it was clearly not a popular key term. In fact, according to the keyword tool analysis on the AdWords site 0-1 clicks were to be expected for the keyword. Average CPC was estimated on the keyword tool at 0.07 - 0.08 so the cost of the original MAX CPC and subsequent 75% increase is difficult to justify. And again, I agreed to pay the cost for front page status and the keyword has dropped off again. I have read the highly technical advice in response to my question and I will try to grapple with it. The issue from my perspective is not the quality of my campaign. My preferred keyword is working well in terms of clicks so I am not doing too badly for a beginner. I am concerned that the cost of the campaign will continue to increase given the price rises so far. I will be speaking to a Google expert next week so I will close off the discussion for now. Thanks again to all who contributed.

Re: Why does the max. CPC price for a keyword keep increasing daily?

Top Contributor
# 6
Top Contributor

Clare, are you sure it is the bid (max CPC) that is rising? Or is it perhaps the Estimated Front Page bid? Because they are two completely different metrics.

 

One is set by you, and it is the maximum amount you will pay for a click, the other is determined by the system, and it is the estimated minimum bid required for that particular keyword, ads, and advertiser.

 

That EFPB is not absolute. It does not apply to each and every advertiser. At the beginning, it is based on an average historical performance of all advertisers, and then it is adjusted with respect to the performance of that particular advertiser.

 

I will try a simple explanation (simple in terms, not in logic), but bear with me, as I might not make it.

 

  • Google wants the click, because they are its main revenue source
  • Clicks occur on relevant ads
  • Irrelevant ads do not get clicked, they only occupy ad space and, in time, they create the impression that "sponsored ads are weird and useless"
  • relevant ads have a higher chance of getting a click, making Google money, and providing the searcher with a positive experience; thus they increase the chance of having someone click again on another relevant ad, next time she searches. And, not surprisingly, making Google money, again

 

What does the system do, when it estimates the required FPB for a particular keyword? It uses historical data. And says that, on average, an Ad Rank of let's say 0.5, for an average QS of 7, is ok. Has chances of getting a click. Which means that for that keyword, and ads as relevant as the previous ones, a bid of 0.08, with a resulting ad rank of 0.08 x 7 = 0.56 is enough. I don't know the exact numbers, but for every keyword, there is such a calculation in the background.

 

But then comes the new advertiser. You. And your ad gets to show once, twice, a hundred times. No click. Or a lot less then expected.

 

What does the system "think"? "Oops, this advertiser is doing worse than the historical average. Her ads are not as relevant as the previous ones ... What can I do? Well, if she's willing to pay more, she can keep trying. For a while."

 

Another X impressions are served. The performance (CTR) is still not up to par. Again, the quality score decreases, so a higher bid is necessary. Until your quality score gets so low that the system decides "I'll stop here, because for the ads this advertiser pairs with this keyword, the chances of getting a decent amount of clicks are close to nil. I'd better run ads from the other advertisers, and give them a chance of making me money and the users happy. Or even no ads at all, and prevent my system from getting a bad name".

 

I think the term Craig Danuloff used for this increased "tax" (the raise in required bid in order to compensate for a low performance) is called "the bozo tax" (Craig Danuloff - Quality Score in High Resolution, a fantastic book, but aimed at experienced advertisers). In other words, if you don't open your eyes and figure out what the problem with your ads / keywords is, you'll open your purse.

 

This is why the "estimated CPC" is nothing but an estimate. Sometimes it works, sometimes it does not work. I've seen it increase insanely, and also decrease to 0.01, the absolute minimum, when I have managed to get a CTR so high that the system was ready to serve my ads for the lowest possible fee. And the reason why sometimes it does not work is universal. You'll see it clearly in the stock exchange as well. You'll only be able to predict future performance up to a certain point when you're basing your decisions on past (historical) data. Therefore some estimations work, others don't. It all depends on how much the performance of every new advertiser differs from the historical data.

 

I can imagine how you feel. You say your campaign is working well. For you it may perform well. You may be happy getting 1 click out of 100 impressions. But there might be other advertisers able to get 2, 3 or even 4 clicks for the same number of impressions. And, compared to them and in Google's eyes, you're doing bad.

 

That's what I think happens. But then, of course, I can't be 100% sure.

 

Calin Sandici, AdWords Top Contributor | Find me on: Google+ | Twitter | LinkedIn | myBlog
Was my response helpful? If yes, please mark it as the ‘Best Answer.’ Learn how here.

Re: Why does the max. CPC price for a keyword keep increasing daily?

Visitor ✭ ✭ ✭
# 7
Visitor ✭ ✭ ✭

Hi again

 

Your explanation is very clear and thank you for that. It is the Estimated First Page Bid that is rising. So yesterday I paid 0.20 to be eligible for front page status and today the price is 0.35.  My other preferred keyword started at 0.30 for EFPB four days ago and it is 0.43 today.  I have been averaging 6-7 clicks a day on my preferred keyword and I am sure it would be higher if I increased my budget which is quite low as I am testing the system. The actual  number of clicks occurring match the estimate given for the keyword. I will be increasing my budget over the weekend as this is the time my niche market will be looking for my products. So, it will be interesting to see what happens. I don't think that my campaign would  be irrelevant to the keyword search term. In fact the search term exactly matches my products. I could make the search term plural but this would increase the price per click by around 400%. I have investigated other keywords through the tools and suggestions on AdWords but they are either irrelevant, estimated clicks are low or max CPC is very expensive. It is reassuring to hear that the EFPD is not absolute. I am aiming for the front page because personally I take very little notice of pages below that. If I cannot find what I want on the first page I enter a different search term and try again. So, paying for an ad that sits on pages below the first page would not provide the value I am looking for.

 

Clare

Re: Why does the max. CPC price for a keyword keep increasing daily?

Top Contributor
# 8
Top Contributor

Then take that keyword, Clare, and make sure you write better ads for it, and make use of sitelinks as well. Try to get it to show in a higher position, and keep working on your ads' CTR.

 

Make sure the match type is restrictive at the beginning (preferably exact only), and that the ad clearly "speaks" to queries which are identical to the keyword. You can try using phrase match as well and leave broad match for later, but make sure you bid less for phrase match. If you manage to increase your CTR, you'll see the QS rise and the EFPB & cost per click decrease.

 

You might have to bid a little higher at the beginning, so you can reach the top positions and get a better CTR. And keep studying your competition. You also have Auction Insights for that. Study their ads, write better ones, get to the higher positions and stay there Smiley Happy. Isn't it quite simple, actually? Smiley Happy

 

Good luck!

Calin Sandici, AdWords Top Contributor | Find me on: Google+ | Twitter | LinkedIn | myBlog
Was my response helpful? If yes, please mark it as the ‘Best Answer.’ Learn how here.

Re: Why does the max. CPC price for a keyword keep increasing daily?

Visitor ✭ ✭ ✭
# 9
Visitor ✭ ✭ ✭

I will definitely work on your suggestions tonight and tomorrow for the weekend campaign. Seriously, I felt that I walked into Hell by asking a simple question on this forum but your feedback has helped a great deal! On a positive note, the traffic for my products on an auction site that will remain nameless went through the roof this morning. This will help me do some targeted marketing when I fill the orders. I will visit the forum next week and provide an update on my journey with AdWords. Also, despite my resistance to overly technical language from some of the posters, I would like to say that since communicating with Google, I have never had such access to great information and people like you who are willing to share their knowledge. A+++ from me!

 

Have a great weekend!

 

Clare

Marked as Best Answer.
Solution
Accepted by topic author Clare M
September 2015

Re: Why does the max. CPC price for a keyword keep increasing daily?

Top Contributor
# 10
Top Contributor

Clare, if you're happy, we're chuffed Smiley Happy. You too, have a great weekend and get back to us with updates whenever you can find some time. It's nice to see success stories sometimes (and I'm sure that in time yours will turn into one of these), especially when you consider that many times people who have problems talk about them, but when things are going well they don't feel the same need.

Calin Sandici, AdWords Top Contributor | Find me on: Google+ | Twitter | LinkedIn | myBlog
Was my response helpful? If yes, please mark it as the ‘Best Answer.’ Learn how here.