In today’s digital advertising landscape, one challenge that advertisers are facing is the rising cost-per-click (CPC) rates. According to WordStream, CPCs have increased by an average of 10% year over year. This upward trend is causing advertisers to look for ways to address this issue and find more cost-effective advertising strategies.
One expert in the field, Lisa Salvatore, Sr. Manager, Lead Acquisition at CallTrackingMetrics, emphasizes the importance of working smarter in this complex and rapidly changing environment. She highlights the need to use the right tools to uncover what drives revenue and increase understanding of customers. By optimizing off actionable insights, advertisers can spend more efficiently.
To address the rising CPCs, it is crucial to understand the root causes behind this trend. Several factors contribute to the increase in CPCs. One factor is a broken funnel within the marketing ecosystem. Low-quality ads, mismatched landing pages, and low conversion rates can all lead to higher CPCs. Google’s direct influence also plays a role, with algorithm updates, ad format changes, and policy changes impacting CPCs. Smart bidding, although aimed at optimizing ad spend, can indirectly increase costs.
Increased competition is another factor driving up CPCs. As more businesses allocate larger budgets to digital advertising, the auction becomes more competitive, resulting in higher prices. Economic factors, such as inflation and changes in consumer behavior, can also influence CPC rates. Additionally, platform changes and restrictions, such as privacy regulations and the phasing out of third-party cookies, can impact CPCs.
Despite these challenges, there are strategies that advertisers can employ to combat rising CPCs without increasing their budget. Five approaches are highlighted:
1. Check settings: Optimize your account by reviewing negative keywords, eliminating keyword overlap, and ensuring Performance Max campaigns are not cannibalizing traffic.
2. Improve landing pages: Maximize the value of each click by implementing clear calls-to-action, conducting A/B tests, and aligning landing page messaging with ad content.
3. Focus on CPA: Shift focus to cost per acquisition (CPA) rather than CPC. Consider a Target CPA smart bidding strategy and optimize the conversion funnel beyond the initial click.
4. Expand the marketing mix: Diversify advertising efforts by exploring other channels such as Bing, Amazon, or industry-specific ad networks. Leverage LinkedIn’s targeting capabilities for B2B marketers and consider influencer marketing for B2C marketers.
5. Listen to customers: Analyze customer feedback to inform keyword strategy and ad copy. Identify new marketing channels mentioned by customers and look for patterns in how customers found you.
By implementing these strategies and closely monitoring metrics, advertisers can navigate rising CPCs while still achieving their marketing goals. Success in digital marketing is about spending smarter, not just spending more. Adapting to the evolving digital landscape and optimizing campaigns will be key to long-term success.
In conclusion, rising CPCs present a challenge for advertisers, but they also offer an opportunity to refine digital marketing strategies. By addressing the root causes of CPC increases, diversifying advertising efforts, and leveraging customer insights, advertisers can navigate these cost increases and thrive in the competitive digital marketplace. It’s time to roll up your sleeves, dig into your data, and start optimizing for a more cost-effective advertising approach.
