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Why has my keyword CPC (Cost-per-click) increased?

Why has my keyword CPC (Cost-per-click) increased?

The most likely reasons that your CPC (Cost per click) has increased are:
You changed your bid (the most likely reason).
Increased competition.
Your Quality Score has changed.
Your keyword search volume has decreased.
If you have Smart Bidding in place, a large changes to conversion rates and conversion data (the most likely reason), or some changes may have occurred to the Google Ads platform.  

Bid changes
If you changed your bid and you suddenly noticed that your CPC has increased, that’s the most likely reason.

Competition
Your competitors have raised their bids, their Quality Score has improved or new competitors and advertisers have entered your auction and suddenly you need to beat his/their Ad Rank. 

Ad Preview and Diagnosis
The Ad Preview and Diagnosis tool helps you to find out if new competitors or advertisers have entered your auction.

TOOLS & SETTINGS > Ad Preview and Diagnosis.

Type your keyword, select your Location, Language, Device and Audience to check if your ad appears, and if there are any new competitors or advertisers that you have not seen before.

Watch video

Watch it on YouTube (Larger version)

Quality Score
Your Quality Score has decreased. The Quality Score influences your keyword’s CPC (Cost per click). 

Quality Score (hist) historical

Keywords > COLUMNS > Modify Columns > Quality score.
Check Quality Score and Quality Score (hist).

Compare your keyword’s Quality Score historical before and after the cost per click increased.

Keyword Search Volume
Use Google Trend to check if your keyword search volume has decreased, or look for new trends and the latest searches data. https://trends.google.com/trends/

Smart Bidding
If you a have Smart Bidding strategy in place, the most likely reasons are: large changes to conversion rates and conversion data.
It is also possible that some changes may have occurred with the Google Ads platform.

If you have a Maximise clicks strategy in place, and your CPC has increased, set a Maximum CPC bid limit to control the maximum amount you pay per each click.

Adalysis free tool
A great free tool from Adalysis for a quick investigation, the Performance Analyzer Data Studio template.

AUCTION INSIGHTS
The Auction insights report lets you compare your performance with other advertisers who are participating in the same auction that you are.

Campaigns > AUCTION INSIGHTS > COLUMNS > Modify columns for auction insights.
Check all columns.

Compare date ranges for your Impression share, Avg. position, Overlap rate (how often another advertiser’s ad received an impression in the same auction that your ad also received an impression), Position above rate, Top of page rate, Absolute Top of the page rate and Outranking share.

In this example, a competitor has increased its Impressions share by 3.6% from December 2018, 28.73% to Jan 2019, 32.33%

The competitor was also less outranked, 24.73% in January 2019 than 27.31% in December 2018, and he was positioned 58.04% above rate (when competitors ads are shown higher than yours) in January 2019, than 57.75% in December 2018.

A competitor gaining Impression share and showing his ads above yours can contribute to a higher CPC (Cost per click).

A lower outranking share percentage can also contribute to a higher CPC (Cost per click).

Useful metrics
Search Impression share is the number of impressions you received divided by the estimated number of impressions you were eligible to receive.

Search top impression share is the percentage your ad was shown one of the top positions, above the organic search results.

Absolute top impression rate is the percentage of your impressions your ad was shown in the very first paid position.

Average position shows you how your ad typically ranks against other ads. Google is sunsetting the Average position in September 2019.

Click share is a new metric. It represents the number of clicks you’ve received on the search network divided by the estimated maximum number of clicks that were possible.

Overlap rate is how often another advertiser’s ad received an impression in the same auction that your ad also received an impression.

Position above rate is how often another advertiser’s ad in the same auction is shown in a higher position than yours when both of your ads were shown at the same time.

Top of page rate is how often your ad (or the ad of another advertiser, depending on which row you’re viewing) was shown at the top of the page in search results.

Absolute top impression rate is the percentage of your impressions that are shown as the very first ad above the organic search results.

Outranking share is how often your ad ranked higher in the auction than another advertiser’s ad, or if your ad was shown when theirs was not.

Best practices
Lower bids
– Lower your bids to decrease your CPC (Cost per click) and test different ad position.

Long-tail Keywords
– Test long tail-keywords.

Ads and Landing page
– Make sure your ads and landing page are always very relevant to the searches and are tailored to your ad group. Relevancy improves your Quality Score.

Search Intent ad groups
– Create ad groups with keywords that address users’ Search Intent.

SKAG (Single Keyword Ad Groups)
– Try SKAG (Single Keyword Ad Groups)

Most important metrics
– Although your CPC (Cost per click) may increase from time to time, the most important metrics you should analyse are your CPA (Cost per acquisition) and your ROI (Return on Investment).

The increased CPC may help your ads to rank higher, get more impressions and clicks, and the additional traffic may be positive for your business.


Extract from my Book ‘Making Google Ads Work’.

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