An issue that is becoming more common as PPC gets increasingly competitive is escalating costs per click (CPCs) in niches that had previously been relatively uncompetitive.

So how would you even start to reduce your CPC costs?

Simply lowering your bid probably won’t do the trick (in the beginning at least), so what strategic steps can you take to improve your competitiveness while still keeping your wallet healthy?

Max CPC vs. Actual CPC

Before we start, it’s best to make the distinction between Max CPC and Actual CPC.

Max CPC is the maximum amount of money that you’re willing to spend on a click. Actual CPC is what you end up paying.

What Causes High CPC?

There are three primary considerations:

High Competition

Google Ads runs similarly to an eBay auction. Every time someone searches, the auction takes place. Several things determine the winner, but your bid is one of the most significant factors.

Industry

In general, industries that have a higher value per conversion have higher average CPCs because advertisers are willing to pay more per click.

Quality Score

The end result is a score from 1 to 10 that directly affects what you will have to pay to reach a specific position on the page. The more relevant you are, the less Google will charge you to rank high.

Depending on your industry, products and targeted location, the difficulty level of achieving lower CPC might vary, but here are some general tips that, if applied properly, should help you:

Click through rate

One of the things that I love about pay-per-click marketing is the speed. We get to see the results of our efforts very quickly, and we can then determine which direction to take.

It’s therefore vital that you frequently create new ads to compete against your winning ads. What do I mean by that? Don’t settle for a CTR of 6% with one winning ad, try to improve it.

Lower bids

Lowering your bids is the most basic way to lower your Google Ads campaign average CPC. By lowering your bids you give Google a lower Max CPC to charge for every click your campaign receives.

In case your campaign is on an average position better than three and it is currently limited by budget, you could afford to lower your bids, as lower bids would imply a lower average CPC.

Focus on improving quality scores

Many times if you’re taking over a new campaign, re-organizing the highest volume campaigns to focus on click-through rate as well as conversion and creating more relevant groups can greatly improve your Quality Scores and lower your costs.

Long-Tail Keywords

Another solution to high CPC is to bid on keywords where your competitors aren’t. The more specific you can get with your keywords while still being relevant, the cheaper your cost per click will become because fewer people are bidding.

Short conclusion

Ultimately, even though paid search is becoming highly competitive because of the targeted nature of the channel and the great results many advertisers are seeing, you can still find ways around high CPCs to create profitable campaigns in many crowded niches.