What are the Most Expensive Cost-Per-Click Search Ads, and What Affects Them?

Paid Advertising Blue Laser Digital on July 18, 2019

What is CPC, and What Affects How Much a Click Costs?

Cost-per-click, or CPC, ads. You may have heard the term, or you may have even run a cost-per-click ad campaign yourself. The name is fairly self-explanatory – paying an amount of money every time someone clicks on your ad – but what does cost-per-click really mean, how should you employ a CPC ad campaign and what factors influence your average cost-per-click?

First, let’s discuss two terms: cost-per-click and pay-per-click. PPC (pay-per-click) is more often used to refer to the type of paid marketing campaign, whereas the term CPC more often describes how much a click in your PPC campaign costs. For example, you might run a PPC campaign with an average CPC of $0.70. However, don’t worry too much, as the terms are frequently used interchangeably in the digital advertising community.

Now, here are two more terms to add to your arsenal: maximum CPC and actual CPC.

Your max CPC is the highest possible amount you’re willing to pay for a click of your ad, whereas the actual CPC is the final amount you’re charged for that click. Now that we’ve dug into some of the basic terms surrounding CPC ads and PPC campaigns, let’s discuss what factors go into determining how much you actually pay per click.

What Should Your CPC Be?

A lot of factors go into determining what a “good” CPC is for your business. And by good, we really mean, what cost-per-click is affordable and has the potential to be profitable for your unique situation. Your budget, industry, average revenue per sale or value of a closed lead, among other factors, play a role in determining what cost-per-click you should be targeting.

There’s no such thing as a perfect CPC; you and your marketing team or agency must make an informed decision, but sometimes even well-crafted and well-researched PPC campaigns don’t perform as well as you’d like. Luckily, the experts at Blue Laser Digital can help you spend your money intelligently in order to lessen the risk of paid marketing.

Other factors that will affect your CPC include:

  • Your maximum bid, ad and site rank
  • Quality score (including click-through rate, landing page relevancy to your keyword, and conversion rate)
  • Ad relevance and ad quality
  • Time of day and day of the week on which your ad is run
  • Geographic location your campaign is targeting
  • Whether you choose Google or Google Search Partners

And the one factor you have no control over is the competition. The more people bidding on the same keywords you want to bid on, the higher the CPC will go.

Of course, businesses with higher returns-on-investment will typically spend more on a PPC campaign than smaller operations. A good guideline is spending 5:1 revenue-to-ad-ratio or 20 percent cost per acquisition, but for some small businesses, this is too high a number.

How to Determine Your Ideal CPC

If you’re not sure how much you should be spending on your PPC campaign, this is a short and easy way to determine a good fit for you. The 5:1 ratio is not a perfect science, but it’s an equation for a great starting point.

First, determine your target ROI or return on ad spend (ROAs). Where do you need to be in order to break even or be profitable? Next, look at your site’s conversion rate. As you can likely guess, the higher your conversion rate, the best your ROAs. Keep a close eye on your conversion rate; even small increases can significantly improve your ROAs. Finally, if your product has the potential for lifetime value rather than a one-time purchase, it might make more sense to pay more to obtain a new customer. For example, a dentist might spend more for a new patient than the actual appointment is worth, but they will hopefully remain a patient for years to come.

How to Optimize for Your PPC Campaign

Running a PPC campaign is more than just creating and launching your campaign. You should never just “set it and forget it” so to speak. A key to long-term profitable PPC performance is on-going analysis and optimization, of your campaign and your website.

Here are a few pro tips on how to optimize your site in preparation for a PPC campaign.

Use a Mix of Long-Tail & Short-Tail Keywords

A long-tail keyword is a keyword that’s made up of three to five words, whereas a short-tail keyword is just one or two words. A long-tail keyword is more specific and targeted while a short-tail keyword is broader. Using a mix of keywords is key, because while short-tail keywords can have a lot more search volume, they may be pricier and reach a broader audience, meaning you spend more money for less qualified leads.

Pay Attention to Your Search Term Report

Don’t look at your search term report once and forget about it. Your search term report needs to be constantly reviewed, refined and added to, or else you risk falling behind in your industry. Make sure you’re continuously optimizing your site to pull in new potential customers as well as eliminate unqualified search matches.

Keep Testing

A/B testing helps improve overall performance by finding top performers. Test new ad copy, new keywords, new promotions, new landing pages. Of course, don’t go too crazy lest you stray from your business’ vision, but make sure you’re trying new things and evolving with the results of those tests. A/B tests of landing pages can be powerful and provide a lot of insight into your customers; use the tools at your disposal. Even a small increase in conversion rate can lead to big gains in revenue or leads.

Keep Your Quality Score High

Take a deep dive into your Google Ads account, paying close attention to your Quality Score. If you have a high Quality Score, you can actually decrease your CPC by up to 50 percent. Save yourself money and get more attention by increasing your Quality Score, which you can do by creating highly relevant and targeted landing pages, and finding other ways to make sure your targeted traffic finds your ads highly relevant.

Optimize Your Bids

Once your PPC campaign has been running for a while, you should evaluate your bids and adjust them as you see fit. Look at the keywords that are bringing the most traffic to your site, the devices and locations from which your users are coming, and the times and days your site is seeing the most conversions. By adjusting and optimizing your bids, you can decrease your CPC and increase your conversions.

What Are Some of the Priciest Keywords?

As you now know, certain PPC campaigns have a much higher CPC than others, depending on factors like industry and average lead or purchase value. Let’s look at some of the priciest keywords and industries. Why? Because it’s fun!

The Average Cost Per Click

Data from WordStream

Across all industries, according to WordStream, the average CPC is $2.32 on the search network and $0.58 on the display network. The average dating and personals company pays just $0.19 in the search network, whereas employment services and legal companies pay an average of $4.20 and a whopping $5.88 respectively.

The Most Popular Keywords

Data from WordStream

These keywords are super pricey, but for good reason. The companies using these keywords are typically ones with high ROI, and therefore high return on ad spend. If they didn’t see such a high ROAs, they wouldn’t be spending the big bucks on these keywords, of course. Let’s take a look at the 10 most popular and frequently used keywords.

  1. Insurance ($54.91 avg CPC)
  2. Loans ($44.28 avg CPC)
  3. Mortgage ($47.12 avg CPC)
  4. Attorney ($47.07 avg CPC)
  5. Credit ($36.06 avg CPC)
  6. Lawyer ($42.51 avg CPC)
  7. Donate ($42.02 avg CPC)
  8. Degree ($40.61 avg CPC)
  9. Hosting ($31.91 avg CPC)
  10. Claim ($45.51 avg CPC)

Get High ROAs with a Low CPC

If you’re ready to try out a new campaign but you’re not sure where to start, need some coaching or need guidance on how to optimize your website pre-PPC launch, Blue Laser Digital can help.

We provide an audit of your website, social media, and paid marketing accounts, a CPC estimate for your industry, and a high-level strategy recommendation. We’ll help you figure out if you have the potential to run a profitable PPC campaign and what marketing channels are a good match for your business to help position your brand for online digital marketing success.