Understanding Shifts in Your Paid Search Marketing’s Costs, and How These Changes Translate to a Higher Upside for Your Business
If you’re a conscientious business owner, you likely analyze your marketing budget down to the cent. We get it. No one wants to see their costs suddenly rise in any part of their business, from supplies, to maintenance costs, or even your ad spend.
As you consider your digital marketing strategy and budget for 2023, you may have noticed more recently that your paid search ads’ CPC (cost-per-click) or CPA (cost-per-action) has increased. At times, you may have wondered if it’s worth it to continue to invest in Google’s prime real estate – the top search results – by bidding on keywords through PPC (pay-per-click) marketing.
Fortunately, at iFocus Marketing, an award-winning digital marketing agency, our biggest commitment is making sure our clients’ ad campaigns are supercharged for maximum exposure and conversions, all while keeping cost-effectiveness in mind.
In this article, we’re taking the time to explain what a higher CPC really means (you might be surprised) and what we can do to optimize your PPC marketing campaign for a high upside.
Let’s Talk Cost: Why Your Paid Media’s CPC (Cost-Per Click) and Other Paid Search Metrics are Higher than Expected
iFocus Marketing, Kansas City’s leading digital marketing agency, is here to walk you through the reasons for cost-related changes in your paid media campaign, and how we can transform those changes into new opportunities for your business’ growth.
First, a Refresher on How a Paid Search Marketing Campaign Works:
- You place a bid on certain keywords that you’re sure consumers are searching.
- When you win that bid, Google’s search engines will display clickable ads you’ve created for your business at the top of their search results when consumers search that keyword.
- You pay the bid amount every time a consumer clicks your ad and is directed to your website.
- Essentially, instead of investing in a corner shop on a busy street or the largest, most prominent newspaper ad, you’re making sure you’ve secured the best digital real estate available.
A paid media digital marketing strategy seems like a no-brainer, right? But what do you do if you’re concerned that your costs suddenly seem higher? Furthermore, you may have heard that Google has something to do with the increase, and you want to know why.
According to our digital marketing strategists at iFocus Marketing, here are the most common reasons why your paid media costs, including CPC (cost-per-click) have increased:
- The Post-COVID Migration to Digital Marketing Strategies, Including Paid Media
More and more businesses have discovered the necessity of a digital presence due to the COVID-19 pandemic. Companies who have never tried digital marketing strategies like paid search and PPC marketing have thrown their hat in the ring.
Now, there’s more competition than ever for the attention of consumers who may be seeking your products and services – and your competitors’. Therefore, your CPC may be higher because bidding on keywords that are relevant to your business has become more competitive than ever.
- It’s Time to Shift Your Mindset to Success Metrics, Not Cost-Per-Click
When you notice that your business’ CPCs are higher than you’re used to seeing, we recommend taking a look at your action-related metrics such as leads and conversions, and your CPA (cost-per-action).
If you’re seeing a higher number of leads and conversions, your CPCs and CPA – even when it is higher – is likely accompanied by business growth, which likely makes that cost worth the investment. We can share your CPC and CPA stats in reference to your leads and conversions to demonstrate how valuable your investment in paid search marketing efforts really is.
- Google’s Automation of PPC Marketing May Be Playing a Role
Google determines your CPC based on a number of factors, including bidding competition with other businesses, the quality of your ad and landing page, the expected ratio of click-through-rate to your page when consumers see your ad, and the relevance of your ad.
Their overall goal is to display the right ads to the right customers at the right times. For your business, this automation on Google’s part can come with a higher cost, but it also delivers their assurance that you’ll be maximizing your exposure for leads and conversions.
Keep in mind, however, that while Google takes the lead on automation, iFocus guides your strategy. We know how to use Google’s tools to our advantage, and that requires much more than AI. We optimize your campaign from keywords to landing page to be sure you’re getting the most conversions, as well as the most affordable CPCs and CPAs (cost-per-action).
- Look at Your Ad Group’s Average Cost-Per-Click, Not Individual Keyword CPCs
When you embark on a paid media campaign, you create an ad group (this is an ad or group of ads that include specific keywords and demographics you want to target). When going over your monthly marketing performance reports, it may jump out at you that one of your most crucial keywords’ CPC is higher than normal.
However, if you consider the average cost-per-click for the entire ad group that includes that single keyword, the average overall cost may not have changed significantly at all. You may have struck a balance between some keywords whose CPC has lowered while one keyword – an important, action-driving one – has increased.
- It’s Important to Understand Google’s Match Types and Higher CPCs
Google has modified the way the keywords you bid on are matched with consumers’ searches. You can bid on broader keywords, as well as highly specific ones that are more in line with how consumers search today. Google understands that we search with much more nuance than we did in the past, so they’ve updated match types to reflect this change. Therefore, there are now more efficient, effective options to target your consumers.
Specifically targeting and bidding on narrow keyword searches ensures that what consumers are searching for is something your business can specifically provide, so these keywords are far more valuable to invest in, and, therefore, may require a higher CPC.
Google’s changes regarding match types are relatively new, so if you’re comparing your current CPCs to an old metric, this shift may be the cause. However, if you’re working with iFocus Marketing, we imagine your conversions have likely increased as a result of how Google has refined their processes, and how we’ve put their changes to work for you.
- Think Seasonality and National Brands
In the case of certain industries, seasonality plays a role. During busy months, your competitors are going to start bidding higher on certain keywords to win business. Take a look at the fluctuation of your CPC with our digital marketing agency, and you may notice that seasonality is playing a role.
You may also be a local business who is competing for keywords with a national brand that has the budget to bid high on a range of keywords. The good news is, however, that your higher CPC is giving you significant exposure alongside these larger businesses.
- Finally, Keep in Mind that Effective, Optimized Digital Marketing Strategies – Including Paid Media – Take Time
A digital marketing strategy ages very, very well with the right tools and experience in place. Google needs to analyze your digital presence with its machine learning tools. You’ll find that your success will increase with time and begin to gain momentum (be sure to scroll down to read our case study of a successful campaign below).
Throughout the process of running a paid search campaign, your CPC can be optimized based on the data you’re getting back about your initial ads and how you choose to revise your strategy moving forward. While there are some hard, fast rules and beliefs we live by at iFocus Marketing, market testing and patience to get the best results is a part of the digital marketing game – and we’re here to win it for you.
What We Do at iFocus to Enhance Your Paid Media Campaign for Your Business’ Growth
While the reasons above may help you understand why costs for some metrics in your paid search campaign are higher, it’s likely you want to know more. What can be done to ensure you’ve made the right decision by staying the course with a PPC marketing campaign? We mentioned the optimizations our digital marketing agency can make on your behalf, and that’s what we’ll explain below.
When you work with our digital marketing agency, our team of strategists, analysts, creatives, and developers are working in real time to ensure your business benefits from our digital marketing strategies. In our day-to-day dedication to your paid media campaign, you’ll find us taking the following key actions to maximize your conversions at the lowest possible CPC and CPA:
- We Don’t Fear Google’s Tools, We Optimize Them: You may be concerned that Google’s goal of automating your paid media campaign and CPC does little more than help them rake in cash on all those clicks. Many of us got used to controlling our ad spend for a paid search marketing campaign manually – pulling back or getting aggressive when we wanted – so allowing Google to automate your campaign may seem a bit uncomfortable. However, it’s important to keep two things in mind:
- It is in Google’s best interest to ensure that their automation tools not only provide customers with exactly what they’re searching for, but that their tools lead to more success for businesses who use them. Translation: their services are designed to work well for you, not just for them – otherwise, we wouldn’t use their tools at all.
- Expert strategy from iFocus Marketing can take control of the many non-automated factors that require a human marketer’s expertise to ensure that Google’s processes are working in your favor.
- The Math is on Our Side: When you work with our digital marketing agency, we can show you exactly what your ad spend will lead to in terms of conversions, and how activating a paid media digital marketing strategy will benefit you when you work with iFocus Marketing.
- Keyword Adjustments: We can add, replace, and revise keywords to best target potential customers to ensure you’re getting desired leads and conversions that will significantly offset your CPCs and CPAs.
- Negative Keywords: To ensure you’re not getting pulled into bidding on keywords that aren’t serving your business (for example, you may want to rank for “foundation” as a home repair business, but not for cosmetic products). You’ll then be able to control the quality of users who are clicking on your ad and looking for your service, and not something that’s entirely irrelevant to you.
- Bid Amounts: As part of a conscientious fiscal strategy for your campaign, we can set maximum bid amounts (how high your business is willing to bid to rank high on search pages) while allocating more of your budget to other important keywords or even additional effective digital marketing services you haven’t yet activated.
- Adjusting Match Type: While it may be appealing to bid on highly specific keywords, we can also focus on broader keywords that still have search volume and lead to conversions. This is a potential strategy for limiting your ad spend while still seeing results from this service.
- Optimizing Your Ads and Landing Page: In our day-to-day work on your behalf, we’re analyzing data and immediately responding to what’s working and what might need further optimization. We continue to refine your campaign with our high-level of experience and knowledge. Additionally, we can recommend SEO (search engine optimization) services and web development to ensure that Google rewards your business with visibility because it knows your landing page offers an informative, relevant, high-quality user experience. SEO will help your paid search ad get even more visibility, and – importantly – you’ll appear in organic search results (unpaid search results) for the keywords you place in your website content.
- We Offer Omnichannel Digital Marketing Strategies: Our clients have found success utilizing a number of digital marketing strategies to maximize leads and conversions. These include social media ads and social media management, search engine optimization, website development, display advertising, and more. When these strategies and tools work at their highest individual and combined potential, your business is completely primed for maximum marketing success: from brand awareness, to customer engagement, to lead generation, and customer retention.
Paid Media is Worth the Investment: Black Friday Insights
Now that Black Friday 2022 has come and gone, the statistics are in for how digital marketing strategies benefited businesses during this important time of year.
Ad Week’s Black Friday insights, include a report from Adobe Analytics: “In terms of marketing, figures from Adobe Analytics show paid search was Black Friday’s biggest driver, representing 30 percent of all online sales.”
While some businesses may have limited their paid media ad spend due to inflation, recession fears, and market volatility throughout 2022, businesses who stayed the course or even increased their PPC marketing campaigns were heavily rewarded for their persistence with this strategy.
Making the Investment: A Case Study of an iFocus Client’s Success with Paid Search
To see how our digital marketing strategies can specifically benefit your business, the following case study illustrates one of our clients’ paid search successes to emphasize that optimizations from our agency, as well as following Google’s recommendations where relevant.
Client: Our client is in the auto sales industry in North Carolina.
The Strategy: Beginning in February 2021, key optimizations were made by our client in partnership with iFocus Marketing’s team to increase conversions.
Actions Taken: Between February and December of 2021, iFocus Marketing optimized our clients’ PPC marketing campaign with updates to keyword match-types, while making the change to Google’s smart bidding feature, as well as a primary focus on maximizing conversions.
Optimizations Implemented: We’ve previously mentioned that our digital marketing agency keeps our clients close to analyze and make adjustments to their campaign strategy in real time.
On behalf of our client, we proactively made the following optimizations from February to December of 2021:
- 22 ad changes
- 4 bidding-strategy changes
- 126 keyword changes
- 68 status changes
- 3 targeting changes
A Big Impact:
- In January of 2021, before our optimizations took place, our client’s conversion rate was 3.24 percent.
- In December of 2021, their conversion rate stood at 15.88 percent – a 390.05 percent increase.
- The average conversion rate between February and December of 2021 was 7.96 percent.
- The average CPC (cost-per-click) increased by 95.10 percent in December of 2021 when compared with February of 2021. However, the cost per conversion decreased 60.19 percent in December as compared to February of the same year. This illustrates our important assertion that while CPCs can rise, the higher rate of conversions they generate with iFocus’ expertise and strategic management more than makes up for the cost.
In summary, these are the top three moves that our client in the auto sales industry made to experience growth through a PPC marketing campaign:
- Our client relied on hard data and the assurances that come with Google’s new tools and iFocus Marketing’s expertise.
- They partnered with our digital marketing agency to develop the right strategy for bidding, keywords, building their ads, and more to increase conversions.
- While some CPCs and CPAs along the way were more expensive than what they’d seen before, their conversion rate more than made up for those costs. They got the exposure they were promised, and this paid off.
Our client chose to invest in iFocus Marketing’s paid search marketing strategy with an understanding that if they tapped into Google’s highly effective tools while relying on our digital marketing agency for expert optimization, analysis, and transparent month-after-month reporting, they’d see the results we’ve been describing throughout this article.
You Don’t Have to Go It Alone – iFocus Can Grow Your Business with Paid Media Solutions
Digital marketing campaigns require a high level of knowledge, skill, experience, and strategic planning to make sure you end up at the top of Google’s ranked pages when consumers are searching for the product or service you provide.
This depth of knowledge also includes an up-to-date understanding of how to use Google Ads, how to perform strategic keyword research, the nuances of keyword bidding, ad writing, and web development. Therefore, trying to play the role of a dedicated marketing expert for a paid media campaign – on top of all the responsibilities that go into running a business – can prove very challenging.
A business that isn’t fully experienced with paid media and doesn’t have the time to dedicate to this digital marketing strategy can end up spending far too much money bidding on keywords that don’t end up meeting the needs of potential customers and fail to produce leads. Your valuable time deserves to be focused on providing customers with your signature products and services, while iFocus Marketing deftly handles your campaign.
Partner with Our Digital Marketing Agency for a Paid Media Campaign
Instead of trying to be your own marketer, consider putting aside the guesswork and steep learning curve to let iFocus Marketing create a digital marketing strategy on your behalf.
Our digital marketing agency will meet with you to learn your short- and long-term business goals, conduct a thorough audit of your current digital presence, perform a complete analysis of your competitors, and recommend a customized marketing plan for your business, including paid search marketing, display advertising, and our full list of offerings.
Then, as we help you grow your business, we meet with you consistently to understand your current needs, answer pressing questions, go over our exemplary reporting on important performance metrics, and make recommendations for your business’ future success.
We’re all about a daily commitment to making your business better and stronger – and we know you’ll recognize this as soon as you meet our award-winning team.
Send us a message online to grow your business with digital marketing today.
Peter Mishler, senior digital copywriter at iFocus Marketing, is dedicated to using language to help clients find their audiences. He is the author of two books: a Kathryn A. Morton Prize-winning collection of poetry, from Sarabande Books (2018) and a book of reflections for public school teachers from Andrews McMeel Publishing (2021). His poetry has appeared in many national publications, including The Paris Review, and he is a contributing editor for Literary Hub. New to marketing, Peter taught English for 15 years.