Why Higher Costs-per-click Can Be a Good Thing for Google Ads Campaigns

In Google Ads, a major benefit for advertisers is that Google charges when a searcher actually clicks on an ad, not just when an ad is served (i.e., an impression). Here’s how it works: when a user enters a search, advertisers bid for the right to show up in the results based on how much they’re willing to pay for a click, determined by how relevant the search term is to their business. But, ad slots don’t necessarily go to the highest bidders. Google determines ad positioning by balancing the amount each advertiser is willing to pay for a click with how relevant their ad is in order to return the best results for each search.

This setup makes cost-per-click (CPC) – the amount advertisers spend for each keyword – a popular metric in Ads. But, clicks don’t guarantee conversions, and most advertisers are more concerned with the number of qualified leads their ads bring in (and rightfully so).

Still, there’s a pervasive belief among Ads advertisers that lower CPCs mean lower cost-per-lead (CPL) results. But, this isn’t necessarily the case.

Here’s the flip side of that argument: properly-managed campaigns have higher bid amounts for the keywords that drive the most qualified traffic (i.e., traffic that converts to sales). Conversely, these campaigns set lower bids for the keywords that don’t generate sales.

To get a better understanding of this line of reasoning, let’s start with a couple of factors that determine CPC in Google Ads.

No. 1: Google Ads Quality Score

Quality Scores are Google’s way of determining the quality and relevance of ads based on their selected keywords. Basically, the more relevant an ad is for the specific keyword it’s assigned to, the higher the ad’s Quality Score. Higher Quality Scores lead to lower required bids to get into the search results, which means lower average CPC.

A significant factor determining Quality Score is click-thru rate (CTR) which is the number of times an ad is clicked on divided by the number of times the ad is seen. The better a campaign’s CTR, the more relevant the ads are to Google and the higher the Quality Score.

CTR =  Clicks / Impressions

No. 2: Ad Rank

Ad Rank is the average position of a brand’s ads in search results compared to their competitors. An ad’s positioning in a search result can have a significant impact on how often the ad is clicked – and, as discussed in the previous section, CTR is an important factor in determining CPC and Quality Score.

Since getting rid of competitors is unfortunately not an option, it’s important to stay on top of the game by optimizing bids for the right keywords. Is there a secret sauce for this? You bet, and these are the ingredients:

  • Increasing bids on keywords that positively impact conversions, CPL and return on investment.
  • “Pruning” keyword lists by either decreasing bids or pausing keywords that are negatively impacting the account (i.e., those expensive/ineffective keywords that garner clicks but don’t produce conversions).
  • Diving through search term reports and assigning negative keywords (terms your ads won’t show up for) and adding new keywords that are likely to convert.

Focusing on qualified traffic, not clicks

Let’s get back to why higher CPC numbers aren’t necessarily a symptom of underperforming Google Ads campaigns. By looking at industry trends, we can see that average bids (and, therefore CPC numbers) have been on the rise over the past few years. While the impact varies across industries and ad types, it’s important to note that higher CPCs, when handled appropriately, can indicate positive overall performance.

Within reason, higher CPCs are not a problem for campaigns that attract relevant searchers and generate qualified leads. The more aggressively advertisers bid on top-performing keywords, the more likely they are to outrank competitors in the searches that matter most to them. This may increase overall CPC, but the tradeoff is worth it because the traffic from these clicks is more likely to lead to sales.

Advertisers should think about CPC this way: do you want to get cheap clicks from searches that aren’t likely to drive sales, or would you rather pay a little more for keywords that drive conversions and contribute to your bottom line?

The Latest from Google: June 2017

Top Announcements from the Google Marketing Next Event and Posts on Google My Business

Google is consistently looking for ways to deliver relevant and seamless experiences. This is partly because people expect it. More and more people look to digital to have everything they need at any given moment. At last month’s Google Marketing Next event, Google focused on the need for innovation, staying one step ahead of consumers’ needs and the technology to make it happen. Through data, machine learning, artificial intelligence and automation, Google believes it can truly deliver what people want before they even know it. In partnership with advertisers like you, Google wants to enhance workflows, so that you can better understand consumers and act on these learnings to drive better experiences and in turn higher quality leads.

AMP and Google Search

The Accelerated Mobile Pages (AMP) project is expanding. AMP is all about using speed to provide faster experiences, and recently Google introduced two new ways they are utilizing it for advertising. The first one is a new AdWords beta that uses AMP to deliver fast-loading landing pages for search ads. The new AdWords will be available to all advertisers by the end of the year.

The second is through the Google Display Network, increasing the speed of how ads are served. Google says they have found these ads to load up to five seconds faster than regular ads. Not only are searchers seeing a seamless experience, but according to Google, this feature ensures display ads are seen by your intended audience.

In-market audiences for Search

This feature was first launched in 2013 focusing on targeting ready-to-buy consumers through intent signals like search queries and browsing activity. Google currently offers this targeting on their Display Network and YouTube campaigns, but now it’s coming to Search. According to Google, advertisers have begun using in-market audiences and are seeing a 10 percent increase in conversion rates. There are more than a dozen audiences available to choose from, including autos and vehicles, financial services, real estate and apparel. As a result, advertisers will be able to bid more effectively for higher-qualified leads.

Google Attribution

Google Attribution is designed to answer “Is my marketing working?” A question that has proven to be extremely challenging for marketers across the board. With this new tool, Google hopes to measure various interactions across devices and channels and help make that data actionable. Google explains that by integrating with AdWords, Analytics and DoubleClick Search, you are able to have all this data in one place with a complete view of performance. This alone ramps up the speed of optimizations like updating bids and budget allocation across channels.

Another key feature is the ability to switch to data-driven attribution, which uses machine learning to automatically determine how much to attribute to each step in the path to purchase. The machine analyzes conversion patterns so you can accurately see what’s working.

Unique Reach comes to AdWords Display and DoubleClick

Earlier this year, Google launched Unique Reach for YouTube in AdWords, and now they are expanding this feature to Display campaigns in AdWords and DoubleClick for all video and display ads. Unique Reach measures the number of unique users and average impressions-per-user. Google de-dupes these across devices, campaigns, inventory and formats so you can accurately know your reach. As a result, you can identify how to best utilize your budget.

New AdWords integration: Google Optimize and Google Surveys 360

Google takes A/B testing to another level with Optimize. Without any coding, marketers can create landing page versions for any combination of AdWords campaigns, ad groups and keywords. Optimize can automatically identify which pages are performing and get more value from campaigns.

The Surveys 360 tool allows for survey creation and specific audience sampling. Through the integration with AdWords, advertisers can target surveys to consumers in remarketing audiences. Brands can ask specific questions about experiences with their ads and landing pages to understand impact and guide optimizations.

Google My Business adds posts

Google My Business now has the ability to display posts on listings. For multi-location brands, this new addition provides local business yet another way to connect with consumers, share information about their products and services and stand out from the competition. Posts can be created using the Google My Business Android and iOS apps or website.

Google explains the following new ways businesses can engage with consumers through posts:

  • Share daily specials or current promotions that encourage new and existing customers to take advantage of your offers.
  • Promote events and tell customers about upcoming happenings at your location.
  • Showcase your top products and highlight new arrivals.
  • Choose one of the available options to connect with your customers directly from your Google listing: give them a one-click path to make a reservation, sign up for a newsletter, learn more about latest offers, or even buy a specific product from your website.

Related: 5 steps to optimize your brand’s presence for local searches on Google

As we learn more about these announcements and new features, we will continue to be your resource for the latest and what you need to know. In the meantime, reach out if you have any questions. As a Google Premier Partner, we are ready to help you maximize your advertising efforts.

Rank ‘em: How Financial Brands Stack Up in Search Engine Results

Wealth management firms operate in a highly competitive space that requires them to vie for the attention of an increasingly digital-first consumer base. Continue reading “Rank ‘em: How Financial Brands Stack Up in Search Engine Results”

Digital Assistants are Changing the Way We Search

Someday soon, the arduous task of starting a computer, logging in and launching a browser may become the modern version of walking 10 miles to school, uphill, both ways. A hyperbolic gripe older generations use to lament how much harder they had it and how much more character they have now because of their tribulations.

“It was a simpler time,” they’ll say; “perhaps, even, a better time.”

It’s a concept as ridiculous as living both up- and down-hill from a school. Technology improves our lives every day by increasing efficiency and freeing up time for us to get more accomplished. It doesn’t make us lazy, it makes us more efficient.

Over the past decade, smartphones have showcased this tech-enabled productivity. Think of everything we use our phones for that doesn’t involve calls or texts – email, navigation, all sorts of functionality through connected apps and, most pertinent to the topic of this post, conducting searches.

There’s been much ado about this shift to mobile, especially in digital marketing where industry professionals have coined terms  like “mobilegeddon” and “mopocalypse.” Now, a mere decade after Apple kicked off the mass adoption of smartphones by introducing the iPhone, the next major shift may already be upon us.

The Rise of Digital Assistants

Digital assistants are software programs that can carry out a variety of everyday tasks. You probably know them better by names like Alexa (Amazon), Siri (Apple), Cortana (Microsoft) and the aptly named Assistant (Google).

While digital assistants have a long way to go to reach the popularity of smartphones, adoption is on the rise. According to Tractica, the number of digital assistant users will more than quadruple between 2015 and 2021.

Major tech companies are putting serious time and money into digital assistants. Yesterday, Amazon announced that Alexa, which was mainly found on proprietary devices like the Echo and Fire TV Stick, will now be available on iOS devices. The added functionality overlaps what iOS devices can already handle, often better than Alexa can, like conducting searches, checking the weather and getting traffic information. But enabling Alexa does allow users to take the functionality of Alexa’s smart home services with them wherever they go.

Google has also been hard at work improving their digital assistant. After launching the software last May, Google has made the digital helper available on a number of devices, including:

  • Eligible Marshmallow and Nougat phones with Google Play Services
  • Google Home – Google’s version of Amazon’s Echo (basically, Assistant is to Home as Alexa is to Echo)
  • Android Wear devices

Using a Digital Assistant

We communicate with digital assistants differently than most technology. Most noticeably, digital assistants literally talk back to us, which is unique from traditional search engines. Each interaction is part of an ongoing relationship. Digital assistants store interactions and learn from them. Over time, they get to know us better and are able to deliver higher-quality results.

This dynamic has created the potential for more familiar and anthropomorphized relationships with digital assistants. This is not necessarily a good thing – critics have pointed out the negative impact this has had on kids’ manners and the societal implications of having digital assistants with predominantly female voices. (There’s also the obvious privacy issues surrounding a personal assistant that is able to record and analyze everything you tell it.)

The actual user experience of digital assistants is also unique and can change quite a bit depending on what device is used to access the assistant. If you use Google’s Assistant, Microsoft’s Cortana or Apple’s Siri on your smartphone, the search results display similar to traditional mobile searches. However, if the search is conducted on a stand-alone device like Amazon’s Echo or Google’s Home, the experience is very different.

Let’s take the Echo, for example. When I conduct a search for “the best restaurants near me,” Alexa responds with the names of nearby restaurants, but no additional location details like the information you’d get in a standard search result (Alexa does offer more detailed results if you pull up the app on your phone, though).

This experience isn’t ideal. Alexa, when accessed through Echo, is great at helping their users with personal tasks – setting alarms, converting metric measurements, reordering common products from Amazon, etc. Alexa does struggle with these “I-want-to-go” micro-moment type searches… for now.

Each digital assistant has tasks they excel at, and tasks they don’t. And that’s OK, because given how popular this technology is, it looks like they’ll be around long enough to get it right.