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How to Reduce the Cost of Your Google Ads Campaigns

In order to run a successful Google Ads campaign, you need to strike the right balance between achieving the highest possible conversion rate at the lowest possible Cost-Per-Click (CPC).

On paper, this goal sounds simple enough. But there are a number of factors that can complicate the process.

These can range from the keywords you choose, to your daily bid amount, whether you choose a manual or automatic bidding strategy, and the level of competition in your field, niche, or industry.

Together, these factors can all influence not just the cost of your Google Ads campaign, but also your chances of success.

Why the cost of CPC is rising

One of the biggest challenges facing digital advertisers today is the gradually rising cost of CPC for Google Ads campaigns.

This is commonly referred to as CPC inflation. It occurs when an advertiser has to pay a higher CPC than what they did before in order to maintain (or increase) their search position.

There are a number of reasons why the cost of CPC is rising. Here are some of them:

1. Increased competition

As Paid-Per-Click (PPC) campaign platforms like Google Ads become more popular, more advertisers enter the fray. This means that more advertisers are competing for the same, or similar, types of keywords in order to rank on Google. And, since there is only so much advertising space available, the cost to maintain the top spot has only risen over the years.

2. Changes to the way Google displays advertisements

Over the years, Google has made changes to the way paid advertisements appear on their platform. For example, sidebar ads no longer appear. Therefore, the amount of space there is to advertise on Google has decreased. On top of this, Google has begun to offer more advertising space to individuals who claim the top spot, but less to those who do not.

3. Removal of budget caps on some automatic bidding strategies

Previously, for automated bidding strategies, like their Enhanced CPC service – a bid strategy that adjusts your CPC to help maximise conversions – there used to be a 30 percent limit on how much higher, or lower, your daily bid amount could go. This was a useful safety net for advertisers, as it gave them the assurance that their campaign would not go over-budget if they chose an automatic bid strategy. However, Google removed this cap in 2017, which means that advertisers need to be very specific about their spending limits, if they want to avoid the risk of accidentally going over-budget.

With all this being said, you may be asking yourself: What steps can I take to stay in control of my Google Ads budget? How can I reduce my CPC while still achieving the highest possible amount of conversions?

That’s exactly what this article is for. Keep on reading to find out.

1. Track your cost and conversion rates

Conversion tracking is an essential component of a successful Google Ads campaign. It’s a free tool that shows you what happens after a potential customer interacts with your advertisement.

By setting up conversion tracking, you can define exactly what type of metrics you want to track. For example, do you want to track online purchases, newsletter sign-ups, phone calls, or application downloads? With conversion tracking, you can accurately monitor the metrics that matter most to you.

To activate Conversion tracking in Google, click on the Tools and Analysis tab in Google Ads. Then select Conversions form the dropdown menu, which brings up the All Conversions page. Click on the Conversions tag, and then the +Conversion button to start tracking conversions.

You’ll then be prompted to fill out a form. Completing this form will help Google Ads generate a custom HTML code for you. You must paste this code in to your web page if you wish to track your desired conversion metric.

With conversion tracking activated, you can start to get a sense of how your customers respond to your ad. You may also start to see patterns in their behaviour. By doing so, you can modify certain aspects of your campaign as needed, until you start to see better results.

2. Pause or modify under-performing campaigns

Be sure to review any under-performing campaigns. If you discover a campaign that is providing little to no return on your investment, consider pausing that campaign. This way you can redirect your resources to more lucrative keywords and campaign directions.

If you have a campaign that is under-performing, but still has the potential to achieve greater returns, with a few tweaks, then take the necessary steps to improve the right areas of that campaign.

What kind of improvements can you make? That depends on what you think is wrong with your existing campaign.

Do you feel your offer, sales message, or unique selling point is weak? Perform a competitive analysis, to see what is working for the competition. And then see what kind of unique selling points you can emphasize, which your competitors have yet to do.

Are your conversion rates low? Review your landing page. Make sure the products and services featured on your landing page is up to date. Make sure the sales copy does a good job of attracting the potential customer’s interest, raising their curiosity, and compelling them to take the next step in the conversion process.

3. Reduce your budget for generic search terms

Targeting shorter, more generic keywords is an effective way to attract readers who are in the early stages of buying.

Sure, they may not make a purchase when they visit your website for the first time. But if you can get in early and satisfy their desire for more information about a certain product or service, then you have a good chance at gaining their trust.

However, if your short, generic keyword campaigns aren’t gaining much traction in the first place, they won’t help you convert. Therefore, consider reducing your budget on these campaigns, and redirect your resources into more competitive, long-tailed keywords.

Keep in mind. You don’t have to completely pause these campaigns. Just redirect your resources, so that the campaigns that are already performing well, are given the extra resources they need to really excel.

4. Choose the right negative keywords and match type

What are negative keywords? They are keywords that, when used in a search query, prevent your advertisement from being displayed.

Using negative keywords is an effective way to limit who sees and interacts with your advertisements. This is beneficial, as it means you are not spending money on clicks from people who are not your target audience. Therefore, by telling Google what keywords you do not want to be a ranking factor, this can help increase the quality of your leads and generate more conversions.

How do you know which negative keywords to use? There are a few ways to find out. One way is to take into account the type of products and services you sell, and the audience you wish to target.

For example, if you specialise in selling work boots for tradespeople, you may not want to rank for search terms like ‘running shoes,’ ‘cowboy boots,’ or ‘formal boots.’ People who use these phrases are unlikely to be interested in what you sell. So there’s no reason to waste money on them clicking on your ad and visiting your website.

Therefore, you would include those keywords in your negative keyword list, so as to reduce the odds of your site ranking for people who use those search queries.

5. Optimise the match type for your negative keywords

Another factor to consider is the match type for your negative keywords. The match type determines the way in which Google implements your negative keywords. There are three match type options to choose from:

  • Broad match– A negative broad match means that, if every word, regardless of their order, appears in the search query, then your ad will not appear. So if your negative keyword is ‘cowboy boots’ and you set it to broad match type, then for search queries like ‘red cowboy boots’ and ‘boots for cowboy’ your ad will not appear. However, if a search query has only one of those words, like ‘boots’ or ‘cowboy,’ there is a chance your ad will appear.
  • Phrase match – A phrase match keyword means that your ad will not show if the search query contains the exact phrase, in the exact order it was written. So, for ‘cowboy boots,’ a search query like ‘boots for cowboy’ means your ad would appear, but it would not appear for a search query like ‘red cowboy boots’ since the exact phrase, in the exact order, was used.
  • Exact match – This means exactly what it means. When your exact negative keyword is used, in the exact order, with no additional words, it means your ad will not appear. This is one of the most effective ways to minimise unnecessary traffic, as it requires the user to input a very specific keyword.

6. Consider using automated bidding strategies

Google Ads features a number of automated bidding strategies. They enable you to set key parameters for your campaign that the automated bidding system will follow.

Automated bidding can help you save time on monitoring your Google Ads campaigns. It carries out, based on what it deems important contributing factors, a number of modifications in the background for you, without requiring manual input from you.

Obviously, the main caveat to automated bidding, is that you lose some or all control over several aspects of your campaign. These include keyword selection, establishing your daily bid amount (within your allotted threshold, of course), and determining how close your campaign gets to reaching your daily bid amount.

Some forms of automated bidding give you more control over the process than others. For example, you can instruct the system to focus on targeting CPA (Cost-Per-Acquisition) via a Target CPA campaign.

Or you can implement an Enhanced CPC campaign. Here, you have the freedom to manually set out the keyword bids, but then the automated bidding system increases and decreases the bids based on various contributing factors.

One downside to Enhanced CPC is that there is no cap on how high or low the bid amount can go. This can increase the risk of your campaign going over-budget, or it could result in underspending and being overtaken by a competitor with a higher budget.

For this reason, it’s vital that you know what you’re doing when it comes to setting up an Enhanced CPC campaign, especially if you want the lowest possible cost per sale. Therefore, if you’re unsure where to start with your Google Ads campaign, then it may be a good idea to enlist third-party help.

Invest in your Google Ads campaign

SEO and especially PPC campaigns are a long game. They’re not something you can set and forget about and expect to reap the rewards straight away. PPC campaigns can sometimes be a difficult sell, due to the amount of time they take to deliver results. But they’re well worth the investment.

By committing to a solid campaign, one that targets the right keywords, is relatively affordable, and helps you generate a healthy amount of profitable leads, then you will increase the odds of seeing a return on your investment.

Of course, in order to achieve these outcomes, you need to have specific goals in mind and a sense of direction in terms of how you plan to achieve those goals. You may want to start by increasing the amount of enquiries for your business. You may want to raise awareness about a charity campaign. Or perhaps you want to promote a new product range you’ve just launched.

Either way, having a sense of direction will help give you focus, and allow you to create campaigns that help you achieve very specific outcomes.

Most importantly, when you enlist the help of a Google Ads campaign manager, they can save you time and hassle in terms of monitoring your campaign. They will take the time to understand your business, your audience, products and services, competitors, unique selling points, and more. With this information, they will create effective campaigns that help you generate quality leads at the most reasonable cost to you.Ready to take your Google Ads campaign to the next level? Contact Apple Advertising today, and see what we can do to help achieve your online marketing goals.

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