Cost-Per-Click (CPC) is basically how much you have to pay every time someone clicks on your ad. Now, with more and more businesses turning to Pay-Per-Click (PPC) advertising, the cost can really start to add up. So, if you’ve noticed your CPC in Google Ads is going up, you’re probably wondering why and how to get it back down. Well, you’re in the right place! Let’s dive into what’s driving your CPC so expensive and discuss some strategies to get it back under control.

Brand keywords usually include your business name or a variation of it. They are usually cheaper and more effective than generic keywords because they have a higher conversion rate and a lower Cost Per Click (CPC). But what if your brand keywords are not as cheap as you expected? What can you do to lower your costs and increase your profits?

Before that, I will share a case of how we help our client lower the brand keyword bidding Cost Per Click (CPC):

We used two months of data to show the comparison, and we found that the brand keywords had a very high average CPC of HK$51.55 from July to August. And guess what? The generic keywords had a lower CPC than the brand keywords!

After we modified some settings, we were shocked by the improvement in the brand keyword bidding. The CPC was reduced to HK$29.75 from September to October, which was a 42.28% reduction from the previous period.

I will share with you four common reasons why your brand keywords Cost Per Click (CPC) are expensive, and how to fix them. At the end of this blog, you will have a better understanding of how to modify your brand keyword bidding.

Reason 1: Choosing A Wrong Keyword Match Types

Match types determine how closely your keywords match the search queries that trigger your ads. There are three main match types: Broad Match, Phrase Match, and Exact Match. Each match type has its own advantages and disadvantages, depending on your goals and budget.

If you’ve chosen keywords that are too broad or generic then your ads will get shown to an entirely wrong audience, leading to fewer clicks and a higher cost per click or to clicks from people who are never going to become your customers. This could lead to fewer clicks and a higher cost per click or clicks from the people who are never going to become your customers.

Solutions:

The best match type for your brand keywords depends on your industry, competition, and objectives. However, a general rule of thumb is to use a combination of phrase and exact match keywords for your brand terms, as they can help you balance between reach and relevance, and optimize your cost per click (CPC) and return on ad spend (ROAS). You can also use negative match keywords to exclude any search terms that aren’t related to your brand or products.

To know more about keyword match types, please read “Mastering Keyword Matching Type: The Definitive Guide for 2023”.

Reason 2: Competitors are Bidding on the Same Keywords

Another common issue that can cause high brand keyword bidding costs is the presence of competitors who are also bidding on the same keywords. This can increase the competition and the auction pressure, and drive up the CPCs for your brand terms.

Solutions:

To deal with competitors who are bidding on your brand keywords, one of the options is to bid higher than your competitors and try to get a better position than them. This can help you maintain your ad rank and visibility, but it can also increase your costs and CPC. Another option is to bid lower than your competitors and try to find a smarter way to reach your audience. This can help you save your budget and increase your efficiency, but it might reduce your impressions and clicks.

The optimal strategy for handling competitors who bid on your brand keywords can vary based on your specific industry, budget, and objectives. Nonetheless, a good starting point is to keep an eye on your competitors’ actions and adjust your bids in response. Tools like Google Ads Auction Insights can provide insights into who your competitors are, how they’re bidding on your brand keywords, and their performance. Based on this information, you can decide whether to bid more, less, or differently and how to differentiate your ads and offers from your competitors.

Reason 3: Quality Score is too low

Quality Score is a metric that Google uses to measure the quality and relevance of your keywords, ads, and landing pages. It is based on three main factors: expected Click-Through Rate (CTR), Ad Relevance, and Landing Page Experience. Quality Score ranges from 1 to 10, with 10 being the highest and best score.

Having a low Quality Score for your keywords can result in several negative consequences, such as lower ad rank and visibility, higher CPC, and poor user experience and satisfaction. This can reduce your impressions, clicks, and conversions, increase your advertising costs, and lower your ROI.

Solutions:

By improving your Quality Score, you can improve your ad rank and lower your CPC, which can help you reduce your brand keyword bidding costs and increase your ROI.

If you want to delve deeper into optimizing Quality Score, Read  “Unravelling Quality Score: How To Check, Monitor & Optimise?”

Reason 4: Incorrect Budgeting and Bidding Strategy

Budgeting and bidding are two important aspects of managing your PPC campaigns, as they determine how much you spend and how you spend it. Budgeting is the process of setting a limit on how much you want to spend on your campaigns, while bidding is the process of setting the maximum amount you are willing to pay for each click on your ads.

Budgeting and bidding for your campaigns can be a delicate balancing act, with the potential for costly mistakes. For instance, low bids might result in lost ad rank and visibility, reducing traffic and conversions, which causing potentially missing out on valuable opportunities, and losing market share to competitors. On the other hand, bidding too high can lead to unnecessary spending, lower ROI, and potentially overpaying for unprofitable clicks. Additionally, using inappropriate bidding strategies can also lead to a decrease in leads.

Solutions:

You can also use different types of automated strategies for different goals and metrics, such as maximizing clicks, maximizing conversions, or maximizing conversion value for sales. By using the right budgeting and bidding strategy for your brand keywords, you can improve your ad relevance, quality, and performance, and optimize your CPC and ROAS.

Don’t know which bidding strategies are suitable for your business? Read this article: “Google Ads Bidding Strategy Explained (Manual or Automated?)”