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CPA is going up because I've saturated my niche. Any ideas on what to do?

Follower ✭ ✭ ☆
# 1
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I have three separate projects (in different markets) that I've been running for several years.

 

The basic business model is lead generation, but not for a sales funnel. It's for user signups for niche social websites.

 

Over time (a span of 5 years), I noticed that my actual CPA has increased threefold. So I checked the stats over longer time frames. Like a bird's-eye view. Not individual keywords, placements, ads, etc. but the big picture.

 

CPC is stable. CTR is stable. Relative CTR is good. Avg Position is stable. All key metrics are stable, except for conversion rate. CR has been steadily going down month after month. And with a constant CPC, decrease in CR means increase in CPA.

 

I couldn't figure out what's wrong, but then it hit me to check the actual signups.

 

Turns out, about half of people who try to sign up are already signed up. On any given day, half of the people who come from Adwords to my landing page and try to sign up enter the e-mail address that is already in my system.

 

I use negative remarketing lists to prevent my ads from being shown to active users. If someone is my user and is visiting my website regularly, then they are in this remarketing list. And all Adwords campaigns have that list as a negative.

 

The problem is, half of those signups are actually from inactive users. They joined a long time ago. Then, they abandoned their accounts. So they are not in any of my remarketing lists.

 

Promoting to them is a waste. Some of them, of course, could be reactivated. But the majority have tried the website and decided it's not for them. So even after repeated signup, they don't become active users of my website. Well, maybe 10% of them do, but more just leave again.

 

And that's half of people who try sign up. My system doesn't show the conversion tag in such instance, since it's not a new user. And that's why reported conversion rate is down.

 

But that's not even the whole problem.  If half of signup attempts are from people who've already signed up, then it's safe to assume that at least half of the clicks are from such people. Probably more. Because there are definitely people who click on a ad, see the landing page, realize that they are already a user here, and leave without even trying to sign up again. So the real rate of "old" users is probably two thirds.

 

Which would match the observed increase in CPA by 3 times.

 

And I see the same thing with three different websites in three different niches.

 

Any ideas on how to continue to reach more new people if at least half of the audience in the niche is already someone I've come in contact with and don't want to show them my ads?

 

 

 

 

 

 

 

 

 

 

 

Re: CPA is going up because I've saturated my niche. Any ideas on what to do?

Explorer ✭ ✭ ☆
# 2
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Hi @bcc1357

This is a interesting case.

From the overview perspective, it looks like your service might have a issue. Think of the keywords list you got - if you keywords are solid and correctly targeted, if your advert is well described on what your sevice is, you should get the right people that who will adopt your service.

If people sign up and give up later, there is nothing wrong with your adword campaign but your business.

But if you want to reach more people, you should try display ads with site targeting. Or try other search ppc platform like bing, linkup, ezanga, or 7search.

Cheers,
Jason

Re: CPA is going up because I've saturated my niche. Any ideas on what to do?

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# 3
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Nope. None of the usual stuff you would think of.
It's not a matter of ads, keywords, or landing pages. And it's not a problem with the service.

While all those are valid points, they simply don't apply to my question.

Just to put things into perspective. Imagine a scenario where you pick a (smallish) niche and spend $1k/day promoting in that niche for a year or two, to the point where your website becomes one among the top few in that niche. And then you scale back to, say, $400/day for another year or so. And so on.

That's the situation I'm describing.

And as I mentioned, the service is fine. Even with the best service out there, there is always going to be natural attrition in the user base. And in my case, the increase in CPA to attract new users is growing to the point of becoming higher than the lifetime value of a user, factoring in the attrition.

We could talk about ways to make the service better to reduce attrition, increase re-engagements, etc. But the fact that I haven't mentioned any of that doesn't mean I'm not looking in that direction.

This forum is for Adwords, and so I'm asking about Adwords. But that doesn't mean I'm not paying attention to other aspects of the business. I just don't see a reason to discuss them here, since here I came for help with Adwords.

Additionally, we could talk about testing ads and the importance of picking the right keywords and all that. But it really wouldn't do any good in regards to the actual question I'm asking.

Again, the fact that I haven't mentioned it doesn't mean that I'm not doing it. That's simply not the question I'm asking at this time.

This is what I would like to discuss as my current problem:

It's simply a matter of having been in prior contact with an ever-increasing part of the niche's audience. While there is still plenty of new people I could reach, with each passing day the ratio of potential "new" people to the "old" ones is decreasing. But my ads are shown to all of them. And negative audience match isn't really helping.

If we take a sample "old" user. That person might see my ad today. He might click on it. He might realize that he knows this website and back out. Or he might try to sign up only to be told that he is already a user here.

Of those people, some part would re-engage. But many won't. The latter is what drives up my CPA.

So how would I set up my campaigns to avoid showing such people my ads?

(Well, ideally, I would like to continue showing them my ads, but at a reduced rate. Some do re-engage, but overall, they aren't worth the same CPA for me as a new user. Statistically speaking.)

Back to the question of how.

I can't use negative remarketing since that hypothetical person isn't my regular visitor. He visited my website 3 years ago, signed up, and then never came back.

I could try negative similar audiences. And use my websites visitors as the audience. So that Adwords would choose not to show ads to people who are like my users, but aren't my users.

But that seems crazy since it would also apply to all "new" people in that niche.

I tried a frequency cap for ad impressions in hopes that maybe it would reduce my expenses with the "old" people. That didn't do any good. It cut my new subscriptions at the same rate as cutting old ones.

So here I am.

Any ideas?

Re: CPA is going up because I've saturated my niche. Any ideas on what to do?

Explorer ✭ ✭ ☆
# 4
Explorer ✭ ✭ ☆
Hi @bcc1357

It seems you've explained your question pretty clear now Smiley Happy

You're right - there is no effective negative targeting for search ads generally. What you can do is check the histroy data of your niche campaign test back then, and run report of different dimensions including geolocations, devices, time of the day, etc. These might help you realize what kinda of group are your main visitors are (but they don't convert well now) so you can bid down towards them, while bid up to the relatively "newer" group of people with other critias.

But as you said, there is no specific feature designed for your kind of case to stop the people that visit your site already. Most of the ecommerce business is on the contrary - they love people to come back and shop again.

Cheers,
Jason