5 tips to reduce CPC in Google AdWords

Google AdWords (part of newly re-christened Google Ad Manager) remains, to this day, the simplest and most powerful tools in the PPC advertising industry. The powerful algorithms automate most of the tasks you’d otherwise be scrambling to do and the rest is easy enough to get around thanks to the intuitive interface. But that’s not to say that the system is foolproof.

The thing is, while the impressions that can be bought are virtually infinite, your media budget is definitely not. Furthermore, the prices you end up paying for each click/ conversion depends on the competing bids for those same impressions. Inevitably, without intervention, those costs could pile sky-high if you are not watchful.

The objective remains this: maximize reach/ conversions/ clicks while minimizing cost for each. AdWords, thankfully, can be manually tweaked to optimize your ROI from a campaign, regardless of your industry/ niche/ products/ location/ etc. In this post, we’re going over some tips you can apply to reduce CPC in AdWords.

Sidebar: ClickZ has a handy CPC Calculator, should you find it useful!

Ready? Let’s begin.

1.   Use long tail keywords

Remember the elusive Keyword Planner tool? If you have ever tried to find relevant keywords for your business, you have probably heard of this. It’s now practically exclusively available through Adwords.

Less competition = lower cost

Use the tool to find as many relevant keyword variations, especially of the long tail kind, as possible. This is for two reasons. First, the more specific a search query, the higher is the user’s search, and consequently, purchase intent. So a click is significantly more likely to lead to a sale/ conversion. Secondly, long tail keywords whittle out unnecessary spending on impressions that are more competitive (which also cost more). If you are in an industry that’s highly competitive, the costs could add up to be astronomical.

Long tail keywords will show up with markedly lower search volumes, but don’t let that derail you. Look to the bright side – they will have lower avg. CPC (because of less competition) and high relevance to your website or business (therefore, better chance of conversion). They also have higher Quality Score, which help improve your ad rank (because rank = max. CPC bid x Quality Score).

Remember to find and use those long tail keywords that strike the balance between low competition, decent quality score, and moderate to high monthly avg. search volume to maximize campaign efficacy as well as lowering overall CPC costs.

2. Test match types for your niche

Now that you know which keywords you want to target, you can tweak your costs by changing how closely you want to match your ads to those search queries.

This is called Match type, and depending on niche, the CPC variation can be slight to ridiculously exorbitant between different match types for same keyword(s). You can get a rough estimate of the differences between match types in your industry/ niche (without affecting running campaign cost) by pausing the campaign, changing match types, then checking the bid estimates. Compare against the costs you were running with before and you’ll know.

It’s a good idea to experiment with this and find out the real-time differences in costs and conversions for your niche between each match type (because estimates don’t factor in bidding variables like seasonality). Do this by creating different ad groups, target to same keyword(s), set different match type per ad group.

By and large Exact Matches or Phrase matches tend to be more expensive than Broad Match Modifier (BMM) type. However, exclusively targeting long tail keywords in low-competition niches could practically make the costs for these match types similar. Therefore, it’s better to test, and implement the match type that yields the most clicks for lowest cost.

Less experienced marketers end up going the default route by using BMM to lower CPC cost. While this saves time in most cases, it should also be accompanied by a pretty extensive list of negative keywords to make sure you’re not racking up even higher costs for all the irrelevant traffic and search queries. The ‘Broad’ in Broad Match Modifier is pretty literal, you guys.

Test and optimize accordingly (and share what works for your niche in the comments below!)

3. Make ads relevant

If you’re familiar with SEO’s basic tenets, you’ll have no trouble believing that within Google’s labyrinthine systems, relevance is the key to success. Whether you are setting up a blog or optimizing your ad campaign, relevance needs to be at the front seat.

AdWords uses relevance to assign Quality Score to your ads. As previously mentioned, Ad Rank = Max. CPC bid x Quality Score. So optimizing ads for higher relevance makes sure that the ads continue to rank well despite lower or less aggressive bidding, compared to the competitors.

First, look through your keywords. Go to keywords tab and hover over a keyword to display the relevance level. Anything that needs work will have ‘Below Average’ in Ad Relevance.

How do you optimize those ads? Think of it as SEO Copywriting 101. Try to include the ad group keyword within the headline and description. Remember to make it look organic (figuratively speaking) and not hammed in.

It also goes without saying that you should add those same keywords within the copy of the landing page assigned to that particular ad group. That brings me to my next point.

4. Test multiple landing pages

Landing page is an important Quality Score factor for your ads. Quality Score determines Ad Rank. Do you see the similarities between optimizing AdWords campaigns and optimizing content for better viewability in SERP?

To further help improve your Quality Score (so you can continue to outrank competitors while lowering your CPC bids at the same time), pay very, very close attention to landing page copy and experience.

As I mentioned in previous point, including keywords from the ad group in landing page copy is sure to beef up the page’s (and consequently, the ad’s own) relevance. But it doesn’t stop at copy alone. Google expects world-class landing page experience.

I wouldn’t go into too much detail, since the basics of page speed optimization and quality UX are already pretty thoroughly covered. A very neat trick is to go the Progressive Web App (PWA) route for your landing pages, since it will check nearly all the markers Google has for great web experience on all devices.

5. About ad groups

This is as much about good organizational skills as it is about improving ad relevance (and lowering CPC without affecting rank too much).

Depending on your website’s structural hierarchy (and that of your business too, frankly), it’s a good practice to structure ad groups and keywords around different products/ services/ promotional offers that you want to advertise online, with its own separate landing page.

This can be a little daunting to do (especially for ecommerce websites with countless products), but in the long run, it provides great Quality Score boosts to every ad you run, simply because it becomes a lot more relevant for Google as well as the customer/ client.

Conclusion

Despite the fantastic ease of automated bidding, programmatic advertising is not foolproof. Herein lies the need for thinking strategists like yourself to tweak the system and reap the rewards.

To maximize the ROI from your AdWords campaign,

1. Target long tail keywords with high avg. monthly search volume and low competition
2. Don’t take the ‘BMM costs less’ drivel at face value. Test match types for keywords and find what works best for you.
3. Optimize ad copy for relevance
4. Optimize landing page experience – suggest PWA route
5. Restructure your ad groups so that each one focuses on different product/ services/ promo offers that you want to advertise.

Keep in mind – lowering costs is all well and good, but that’s not the endgame for any self-respecting marketer. You also have to hit the KPIs and get results, which you can’t do if you’re focused solely on cutting costs without regard to ad campaign performance.

In this post, I outlined some ways to lower CPC without bringing down the Ad Rank too much. Because in the end, what good will penny pinching do if there are no clicks or conversions to show for it?

Do you have tips on reducing AdWords CPC while maintaining performance and rank? Share some with us in the comments below.

Pawan Sahu is the founder of MarkupTrend. He is a Digital Marketer and a blogger geek passionate about technology, marketing, WordPress etc.