AdWords, PPC

Lowering PPC Cost Is Easy With This Cost Per Click Formula

A Google Partner's Cost Per Click Formula That Will Flat-Line Your PPC Costs

“How Do We Lower Our Cost-Per-Click?”

In the digital marketing world, that eight-word phrase is anything but music to your ears. If you’ve ever tried to run a successful Google AdWords campaign you might, unfortunately, be familiar with high CPCs and how massive of a struggle it can be to strengthen the relevancy in your content so your company can decrease your PPC pricing while increasing conversions and Quality Score.
 
In today’s blog, we’re going to explain how Google AdWords cost-per-click (CPC) is defined and we’ll supply a proven framework that your business can implement to increase the relevancy in your content so your brand can speak to your true customer market, decrease your CPCs and maximize your website conversion rate.

What is CPC?

CPC stands for Cost-Per-Click. In Google AdWords or any pay per click marketing platform, your CPC is the price your business pays every time a potential customer clicks on one of your ads. 
 
Having a high click-through rate is the first step towards AdWords success. However, if your business is gaining a lot of clicks at a price that’s too high, or if you’re gaining clicks from customer’s that aren’t going to purchase your goods or services, these are traits of unsuccessful AdWords campaigns and low Quality Scores.

The goal is to acquire a high click-through-rate with a low cost-per-click from a targeted audience and drive them to a relevant landing page so you’ll ensure your companies campaigns have a high Quality Score.

How is Cost-Per-Click Calculated?

The simple equation for your business to determine its AdWords Cost-Per-Click is:
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CPC = Total Ad Spend/Total Clicks
 
Total Ad Spend is how much your business pays for a total set of ads in AdWords. 
Total Clicks are how many times your ad was clicked on by prospective customers.

What Affects AdWords Cost-Per-Click?

  • Click-Through Rate (link to CTR blog)
  • Keyword & Content Relevancy (link to Keyword blog)
  • Post-Click Landing Page Experience (link to download)

How Do You Achieve a Lower CPC in AdWords?

The keys to decreasing your AdWords costs and attaining a lower cost-per-click strategy boils down to a few things, but it mainly it revolves around your campaign’s Quality Score.
 
Quality Score is the 1-10 grading system that Google uses to essentially place marketer’s ads in the search engine result pages (SERPS). 
 
If your brand attains a higher Quality Score then Google awards your business with a lower cost-per-click as a thank you for producing user-friendly, quality content that speaks to your industry’s true market audience.
 
Any pay-per-click campaign with a Quality Score of 6 or above will receive up to a 50% decrease in CPC.
 
However, if your campaign’s Quality Score drops beneath a 5, you’ll receive a drastic increase in how much your business pays per click. This is Google’s way of motivating your company to improve your keyword selection, ad content, bidding strategies, ad grouping, and post-click landing page experience.
 
If your company can increase Quality Score, this is the most efficient avenue to achieving lower CPCs in your Google AdWords campaigns.
 
4 Tips to Decrease CPCs & Increase Quality Score:

  • Improve Relevancy of Content
  • Adjust Keyword Selection
  • Test Different Bidding Strategies
  • Enhance Landing Page Experience
     
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Improve Relevancy of Content & Lower CPCs:

Content is the name of the game these days. If your company is going to generate lower CPCs with higher revenue in AdWords, your PPC content has to be relevant to your audience.

Technology has changed what information we can share with our customers. It has also changed how we interact, giving our businesses the ability to create tailor-made, meaningful, personalized customer experiences.
 
Your goal as a brand is to create shareable material that is not only seen but interacted with, ultimately opening up the floor for conversations. To make matters more interesting, our landscape for marketing is constantly evolving and your team has to be aware of how this plays into the big picture.
 
Your consumers are wildly varied and there is never a “one size fits all” approach to achieving lower CPCs in AdWords, but it’s vital to understand your consumer, the platform on which they’re accessing their content, and what their intended outcome is. Only after your team defines these aspects can you confidently assess if your brand’s copy will generate a lower cost-per-click.


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The Writer’s Golden Rule: Attract the Reptilian Brain
 
Successful content that generates low CPCs is without a doubt a lesson in psychology. If you’re going to truly attract your customer’s attention you need to call out to the oldest part of the human brain; the reptilian brain.  
 
If you’re unfamiliar with this breakdown, the reptilian section of your brain is what calls the shots as to our instinct and survival. Its main focus is to simply avoid pain. This is where our instinct comes from, giving us the ability to make our decisions.
 
If you want to generate lower cost-per-click in your PPC strategy and increase your revenue, every piece of content must:

  • Tap into your customer’s pain points.
  • Attract their inner desires.
  • Demonstrate prominence through contrast.
  • Utilize visual metaphors.
  • Connect at an emotional level.

The 4 Pillars of Low Cost-Per-Click Ad Copy:

  1. Attention Grabbing Headline
  2. Engaging and Educational Description Line
  3. A Relevant & Creative Display URL
  4. Utilize Ad Extensions

Use Attention Grabbing Headlines to Lower CPCs:

If you want to increase revenue, your team needs to produce Headlines that pinpoint the products or services of your company. They must contain relevant keywords, all the while fitting your brand voice. 
 
If your target audience is a fifty-year-old male, don’t speak to him like you would a twenty-year-old female. It’s true, the devil is in the details, specificity is the key to a lower cost-per-click.

  • Match the keywords your customer is searching for.
  • Stand out from the competition.
     
    Those bullet points will show Google or any other search engines that you’re extremely relevant to your consumer. It will greatly improve your Quality Score, lower your cost-per-click, as well as scream to your customers, “hey, this ad is relevant to you.”

Improve Your Ad Description Line to Lower CPCs:

Your ad’s Description is the next step towards creating revenue-generating copy with lower CPCs. The hard part is over, you’ve caught your customer’s attention with a stand-out Headline, now your description line needs to keep their attention and get to the heart of your product or service. 
 
Just like for profitable keywords, to produce profitable content you need to study your customers. What are they trying to accomplish? What are their questions, concerns, and jobs-to-be-done?
 
When your brand garners trust with useful content, you will generate leads, and with enough brand awareness, those leads will turn into lower CPCs.

Get Creative with Your Display URL to Lower CPCs:

Google requires that the root domain name is included in the display URL, but your team has the ability to make the most out of this piece of your ad. Tiny changes to the Display URL can really make a difference in profits, and many marketers aren’t utilizing this aspect to its fullest.

Use Ad Extensions to Lower CPCs:

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Last but certainly not least are Ad Extensions. Google recently started including ad extensions as part of your Quality Score, which makes them even more important for the success of lowering your cost-per-click in AdWords. You can learn more about Quality Score and CTR in a previous post.

5 Ad Extensions Your Team Should Be Using to Lower CPCs:

  1. Call Extensions. If you’re trying to receive phone calls for leads, these display the phone number for your business or a forwarding number provided by Google.
  2. Location Extensions. If you’re a retail location and trying to drive customers to your brick and mortar these links will connect your ad to your address.
  3. Sitelinks. These allow you to provide links to additional landing pages.
  4. **Callouts. **These are little, bullet point messages where you can provide more information about your offer or business in a reader-friendly format.
  5. Structured Snippets. These will allow your team to add a list of items to your ads. If you sell different brands then you could create a list, or if you provide different services, you can list them for your customer to easily peruse.
     
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Research & Select Better Keywords & Lower CPCs:

By researching AdWords Keywords with a tool like ClickScore or Google’s Keyword Planner you’ll allow your creative and organic search team to know what phrases to target so you can reach the right customer at the right time, increase conversions and lower your cost-per-click.
 
4 Important Questions to Strategize Low CPC Keywords:

  • What are your customer’s trying to know?
  • Where are your customer’s trying to go?
  • What are your customer’s trying to do?
  • What are your customer’s trying to buy?

The more relevant Keywords you attain in your list, the more your team knows about your customers and the job they’re trying to accomplish. The more you know about your customer’s job, the more efficient clicks and traffic you’ll drive to your website.
 
A successful digital marketing strategy and Keyword list aren’t just about getting visitors to your website, it’s about getting the right kind of visitor to you at the right time in their purchase or education journey.
 
When researching keywords, we suggest your team keeps these questions in mind:

  • Are these keywords relevant to your copy and landing page content?
  • Are these keywords allowing your customer to complete the job-to-be-done?

When you develop an optimized Keyword list, full of 1000’s of Keywords, you’re penetrating into the psyche of your customer and what they want to accomplish. You’ll be able to predict shifts in demand, innovate for any changing conditions and lower your AdWords CPC.

Where to Test Keywords for Lower CPCs:

  • Web Page Content
  • Blog Headlines & Titles
  • Ad Headlines & Copy
  • URL Design
  • Structured Snippets
  • Callouts

Use Negative Keywords Lower CPCs:

A Negative Keyword is a topic or phrase that you can implement into your keyword list, and its purpose is to negate that chosen word from appearing in your targeted searches. 
 
Let’s use a plumbing business as an example. You run a high-end plumbing service that deals with elite clientele in Hollywood. 
 
Your brand doesn’t want to waste valuable marketing dollars targeting customers who
are searching for “cost-effective solutions” to their problems. Therefore, your team needs to strategize and bid on negative keywords like “cheap” or “low-cost.” This way you’ve taken that potential searcher out of the equation, leaving your company to more efficient clicks from customers who want your services. This is a proven strategy to increasing your conversion rates, improving Quality Score, and decreasing cost-per-click.

How to Lower CPCs With Keywords:

  • Revise & Test New Keywords
  • Raise Primary Keyword Spend
  • Test Negative Keywords
  • Use Long-Tail Keywords
  • Add Broader Keywords

Use Long-Tail Keywords Lower CPCs:

This Long-Tail Keyword phrase catches a customer much farther down the sales funnel and should lead to more efficient AdWords spend and increased conversion rates.
 
Long-tail Keywords usually encompass a more conversational nature to them, as well as
defining a specific intent. For example, let's use that plumbing company again, "best plumbers in St. Louis” has less competition than “best plumber” because Google will group your business in with every plumbing company all across the U.S.
 
If your business is based in St. Louis, MO and your company specializes in fixing clogged drains for septic tanks. Instead of focusing on singular Keywords, like “clogged drains,” try testing and bidding on phrases that match a more specific customer base. “Best plumbers for septic tanks in St. Louis.” Tactics like these are sure to lower your pay-per-click CPCs.

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Remember, a successful AdWords strategy isn’t just about getting more customers
to your website, it’s about getting the most cost-effective, targeted customer for your business at the right time. Negative Keywords and Long-Tail Keywords are two of the most beneficial tactics for attracting the right customer at the right time and decreasing CPCs.

 
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Test PPC Bidding Strategies to Lower CPC:

Successful Pay Per Click advertising in Google AdWords is no easy feat, especially if you’re trying to lower your cost-per-click.  The main objective of bid optimization is to determine how much money to spend on each ad, so every click results in the most profitable conversion.

If your Paid Search team is going to bid effectively and produce the best profit margin for your business, they must have conversion tracking set up in your company’s AdWords account. The goal here is to determine the maximum cost-per-click (CPC), which is the most your company is willing to pay per keyword.
 
If you are just getting started with AdWords, we’d recommend minimizing your keywords down to a core group and bidding aggressively. Being aggressive with your bids will put your ads in the best position to gain more clicks, ultimately giving your team a better chance to collect useful conversion data and lower CPCs.

Your PPC strategist will be able to place more focus on effective keywords that convert for your business and industry. You’ll also be able to eliminate and change ads or campaigns that aren’t producing cost-effective CPCs.

  • Lower Bids on Ads That Aren’t Performing
  • Increase Bidding on Ads & Keywords That Are Successful
  • Bid on Location
  • Bid on Time of Day
  • Bid on Different Devices
  • Study your Google Analytics and Google AdWords data.

Why Targeting Devices Is Essential For Lowering CPCs:

Your AdWords performance will absolutely vary depending on which device your prospective customer is using. For example, on an overall basis across the U.S. mobile device traffic has lower conversion rates than desktop traffic. But, the numbers are growing. If you’re grouping data that compiles both devices into the same pool, you’re not getting the full picture on your revenue.
 
Your company must sort the device report by cost to see where you’re currently spending your budget and divvy more spend on whichever device is performing better. It would also be helpful to organize ads by cost-per-conversion to see which devices are the most profitable for your business.

To Lower CPCs You Must Target at The Right Time:

It’s vital to test how your campaign performs by time and day of the week. More often than not, your ads will perform better during certain times of the day and certain days of the week. This will vary depending on the product or service you’re selling and the customer base your selling to. 
 
With testing and revision, you’ll be able to pinpoint when to launch your best ads to reach your audience at the time they’re prone to make purchasing decisions and this will result in lower CPCs.

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Improve Landing Page Experience & Content for Lower CPCs:

At this point, your company has optimized the ad targeting and copy and they’re getting prospective customers to your site with low, cost-effective clicks. All that work needs to pay off now, and that’s up to the Landing Page. If your team optimizes it correctly there’s no doubt you’ll easily convert your customer’s traffic into massive profits.
 
LandingPageTip

A ClickScore Tip for Revenue Generating Landing Pages:   Your website’s homepage should NEVER be used as your Landing Page.
 
Normally, a brand’s homepage is a general introduction on the company and its products and services. Its purpose is to paint broad strokes in terms of subject matter and introduce any potential customers to your business.
 
A profitable Landing Page needs to be anything but general. It should be incredibly focused on the ad that drove your customer to it. There should be no information present that isn’t of the utmost importance. If your ad copy and description is for a Star Wars t-shirt, then your Landing Page needs to display only that t-shirt and how they can seamlessly purchase it in one click.
 
If your team is running multiple ads with different offers you will need different
Landing Pages for every ad.

The 6 Steps To Building a Profitable Landing Page:

  1. Position a compelling headline at the top of the page. Make sure it's relevant to the ad that drove your customer there.
  2. Pinpoint the benefits of your products or services with simple, yet creative copy.
  3. Honestly describe what makes your product or service better than your competitors.
  4. Reiterate and drive home the offer that was displayed in your ad copy.
  5. Brand awareness is a must with digital marketing. Build customer’s trust with testimonials and case studies.
  6. Simplify the buying process. Make one-click purchases available; don’t make them hunt for the buttons.

If your Keywords, Ad Copy, and Landing Page are all relevant to solving your customer’s “job to be done” then you’re on your way to producing high-quality, profitable AdWords campaigns that will produce a lower cost-per-click and growth.


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To Sum Up CPCs:

If your business is in need of lowering your AdWords campaigns CPCs, focus on the well-being of your customers and what they’re asking for in the search engines. The purpose of any piece of content is to improve your customer’s life. To add value and speak to what the search engine results are telling your data team. In order to successfully accomplish that feat, your team must familiarize themselves with what customers are searching for. 
 
Any time a search engine user types a query into a search engine it’s showing us they have a desired “job-to-be-done.” The goal with your content is to accomplish this task for them as efficiently as possible.
 
Innovation in any market comes from a deep understanding of the job the customer is trying to get done, and then doing it for them.

If you’re still shaking your head over AdWords cost-per-click and what strategies your company should implement to decrease your CPCs, reach out to one of ClickScore’s AdWords Specialists.

Also, we invite you to test your CPC knowledge in our CPC Exam below and share your score on our Facebook and LinkedIn.

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About Team ClickScore

ClickScore gives clarity around digital marketing waste. We use actionable data to align and position your organization’s online presence so your marketing can solve your customers’ “jobs-to-be-done.”