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CPC has tripled

Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

Our AdWords activity has been on autopilot for years. Some time last month, our CPC tripled and has stayed there. Essentially, with no explanation, Google has tripled our cost for their service. Did I miss something?

2 Expert replyverified_user

Re: CPC has tripled

Participant ✭ ✭ ✭
# 2
Participant ✭ ✭ ✭
Hi Stephen,

There is often no explanation in terms of someone letting you know what happened. There are a number of reasons why CPC can spike like that and unfortunately the onus is on you to find out why.

The firs thing that comes to mind is that perhaps there are a couple of new competitors on the scene so I would suggest looking into the Auction insights report and seeing if there is a change in activity there.

Learn more here:
https://support.google.com/adwords/answer/2579754?hl=en

By having your account on ''auto-pilot" you may also be missing out on a number of new tools that your competitors are now using and have thus gained a large competitive edge over you. For example, given the timing of your Spike it is more than possible that they are using call out extensions and you are not. This would give them a significant boost in CTR over you, thus increasing their QS and Ad rank. This would then drive up your CPC's in order to stay competitive.

Learn more here:
https://support.google.com/adwordspolicy/answer/6084196?hl=en

It could also just simply be a lack of ad testing and your ads have become stale. Where as your competitors are testing their ads and are thus constantly improving their CTR and QS as a result giving them a higher Ad rank.

These are just 3 reason that come to mind. But I would suggest doing a thorough analysis and advise against auto-piloting at all. There can be some auto-pilot to an extent as a well optimized account can run with only a few hours maintenance a week/month but again, this is dependent on always adopting the new tools and features that are made available.

Hope this helps.

Re: CPC has tripled

Participant ✭ ✭ ☆
# 3
Participant ✭ ✭ ☆
Hi Stephen,

It likely has to do with competitors in the space. Also, it could be as a result of the roll out of close variants. I would take a look in two places:

- The search query report - here you can see what types of terms you are matching to. Close variants are typically pretty relevant to terms that you are bidding on but it could have affected the terms you are showing for and the price of the clicks. The only reason I really bring up close variants are because they are the most recent change Google has rolled out. It actually happened in late September but it could be something.

- Secondly, I'd look at the auction insights report to see if anything has changed with the way that competitors are bidding.

What bidding setting are you using? There are several ways to manage CPC but the two options mentioned above might help you better understand why it increased in the first place. The AdWords auction is always changing, so things like this do happen. It might help if you set up some daily or weekly reports so that you can keep an eye on it even if you don't have time to make a lot of optimizations.

Hope this helps!

Re: CPC has tripled

Participant ✭ ✭ ☆
# 4
Participant ✭ ✭ ☆
Another question that I meant to ask - have you seen any changes in conversion volume? Sometimes CPC increases can pay off with additional leads. Just a thought!

Re: CPC has tripled

Top Contributor Alumni
# 5
Top Contributor Alumni

Good morning.

 

Check performance statistics for the time before and after the click cost change. Auction insights (to see what new competitors might be in the field), search queries, first page bid estimates, impression share, etc--these things can help you figure out what the performance difference actually is and when/why it happened.

 

I would add that click costs could not have changed that much unless Ad Group/keyword bids were high enough to allow it. Meaning no offense--if an advertiser sets their bids higher than they really want to pay and then walks away from the campaign "for years" then it's not surprising that they'll eventually see click costs increase.

 

A campaign is not a static object--it's a dynamic marketing effort sitting in the middle of a huge and even more dynamic advertising environment. If the campaign doesn't adjust to meet the changing environment, performance begins to drop and costs increase accordingly.

 

Mine your performance data for a period of time (say, six months or so, depending on your industry's seasonality), then compare those metrics with performance for the time after the change. Look for shifts in search queries that users are entering. Check your ads to see if they're no longer getting the volume of clicks you need. Double-check your sitelinks and review your website to see if there are better pages you might use. (While you're at it, check the website to make sure the URLs used in your ads are all still active--then read the text of those landing pages and see if you can improve messaging there.)

 

Basically--the campaign needs active management. There's no knowing how long it might take to get performance back to what you're looking to achieve--you won't know that until you figure out what's been going on.

 

If you have specific questions, feel free to post them here in the Community!


Theresa
Google AdWords Top Contributor
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Re: CPC has tripled

Visitor ✭ ✭ ✭
# 6
Visitor ✭ ✭ ✭
I must say I am very impressed with the quality of the replies, so thank you all. I will do my best to follow the suggestions, although I am not an SEO pro (obviously). The change came abruptly, between Sept 22 and 24, if that is a valuable clue.

Re: CPC has tripled

Top Contributor
# 7
Top Contributor

Hi Stephen, I'll try and keep up the Quality replies!

 

Such a dramatic change over such a short period of time strongly suggests an equally dramatic change somewhere in the "chain" of events that lead to actual CPC costs (sorry for stating the obvious).  Although Google does change algorithms from time to time, and some changes are large, when these changes have an impact on costs like this, we tend to know about it.  There are a huge number of advertisers out there so if Google did something on the 22nd September that tripled CPC costs for even a relatively small percentage of advertisers, believe me, we'd know.

 

Competition is certainly a possibility; so that's where I'd look first, although the increase is surprisingly large and over a short term.

 

My other thought would be to look at your Quality Score.  As you may know, Quality Score is effectively a "multiplier" for your CPC bid so if a Keyword has a QS of 5/10 and a Max CPC of $6, the effective CPC is only $3 (it's a little more complex than this, but it'll do for this discussion).  So, if your QS was, say, 9/10 and dropped to 3/10, that could overnight reduce your effective CPC to a third of what it was, and if you're using automated bidding of some kind, it may be necessary to triple the bids to get back to where you were.

 

What could cause such a drop in QS?  In such a short time period the only thing I can think of would be a change to the website itself.  Factors such as stale Ad copy or changes in algorithms would be more slow acting but, for example, a new landing page design that doesn't work could have such an overnight effect on QS.

 

Jon

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