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Why does cost per click increase dramatically when I increase daily budget?

Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

I have been using Google shopping for a year now and there are things I still do not understand. I want to know why when I have a daily budget of £10 my clicks cost around £0.11, (I am on Maximise clicks) but when I increase daily budget to £20 or £30 the cost per click goes up to around £0.25. Can anyone please help me understand as it is so frustrating. I have turned off my ads for now until I can either work out how to increase my ROI or pay someone to run the ads for me. 

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Accepted by topic author sarah h
January

Why does cost per click increase dramatically when I increase daily budget?

Top Contributor
# 4
Top Contributor

With a lower budget, Google is showing the most products it can, for as cheap as it can. When the budget increases, there's more money to show products that cost more to show. This is quite common. Only when you reach an impression share of 100% will you know the true average cpc across all of your products.

 

 

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Why does cost per click increase dramatically when I increase daily budget?

Top Contributor
# 2
Top Contributor

Hi Sarah, 

 

A few possibilities: 

#1 - If you're using enhanced CPC or an automatic bidding strategy then AdWords will try to use up your daily budget and also try to maximize the number of clicks. This will include increasing your bid so as to better compete during more competitive times of the day when more traffic is available. 

 

#2 AdWords will even take liberties and bid beyond your daily budget if it thinks that it's worth it. This may include possibly changing your max. cpc. Although this is unlikely. 

 

Best,

Joshua, Top Contributor
Was my response helpful? If yes, please mark it as the ‘Best Answer.’

Re: Why does cost per click increase dramatically when I increase daily budget?

Visitor ✭ ✭ ✭
# 3
Visitor ✭ ✭ ✭
Thank you, I dont go over my budget, but as I am paying so much more per
click it means that I dont get many more clicks than if I stick with a
lower daily budget, so there is no way for me to scale up.

I use maximise clicks and dont set a max bid, I have tried setting the max
bid to £0.15 but then I get no clicks at all.
Marked as Best Answer.
Solution
Accepted by topic author sarah h
January

Why does cost per click increase dramatically when I increase daily budget?

Top Contributor
# 4
Top Contributor

With a lower budget, Google is showing the most products it can, for as cheap as it can. When the budget increases, there's more money to show products that cost more to show. This is quite common. Only when you reach an impression share of 100% will you know the true average cpc across all of your products.

 

 

Why does cost per click increase dramatically when I increase daily budget?

Explorer ✭ ✭ ☆
# 5
Explorer ✭ ✭ ☆

As @RobSkelton said - you need to get up to around 100% impression share and then you work out your CPC or CPA to acceptable level.