When it comes to online advertising, obtaining and maintaining the consistency is rarely observed — if ever. The PPC Campaign managers and advertisers check the ad copy, do better research keywords, and may attempt to create new campaigns for A/B testing will possibly lead to consistent results after many weeks. Whatever optimization techniques we follow, the Cost we spend on Ad Clicks mostly depends on the external factors play an important role when it comes to Search Ads.
There are many factors that could bring up an unexpected or sometimes we can’t even explain the change in campaign performance. Specifically, a spike in the Cost Per Click (CPC) for Google AdWords Search campaigns, can be caused by a new competitor entrance into the ad space or exit to the bidding process. These can be the important factors that may cause the spike in CPC for your search campaigns.
Increased Competition / New Advertisers in the Industry
In Google AdWords, the total number of advertisers can be found in the Auctions Insights that can be checked for a particular month. This Auction Insights report allows advertisers to monitor the competition metrics in the same dashboard. Although every advertiser can control the cost of their own bids, the competitors determine how much you pay and where your ad will be positioned. As more competitors are advertising for the same keywords, the CPC will rise and get adjusted to the bidding setting that you’ve set. For Ad Impression share and Top Page bidding, your Ad position may come on Top but the CPC will be very high.
Decreased Competition in the Ad Space and Your Ads Quality Score
Google Ads bidding is determined by the Ad Rank which is calculated as Maximum Bid x Quality Score — the highest ranked ad gets the top position in Google Search Results. The CPC is often determined by the Ad Rank of the next highest ad divided by that ad’s Quality Score. For example, If there are 30 competitors bidding the exact same price on the exact same keyword, the ad position will be determined based on the Quality Score of the ad. But if 30 competitors are bidding on the same keywords at different prices, the position of the ad is determined by the Maximum Bid x Quality Score. Since every competitor likely has a different maximum bid, it is easier to determine the order. Increase in Ad position, the more visible location brings with it a more premium location, leading to a more costly CPC.
What can be done to protect your search campaigns from spikes in CPC’s?
Having knowledgeable PPC experts in house to manage your campaigns can prevent some of these changes in your campaigns. Or you can outsource to any PPC Management and Services Company like Immersive Radical Digimedia and get your FREE PPC Audit Report.