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Guest Contributor: Wade Callow, Digital Marketing Specialist

Fair warning, I find my job very interesting, so this article can be a bit technical.

 

Understanding Cost-Per-Click in Your B2B Paid Search Campaign

There are a variety of important metrics to consider when optimizing your B2B paid search campaign, each with its own meaning and optimization techniques. One paid search metric that is often highlighted – no matter if you’re using Google or Bing, your B2C or B2B, or if you are client side or agency – is the Cost-Per-Click metric, or CPC. Perhaps because it directly correlates to the dollar amount spent on each keyword, CPC is often seen as one of the most important factors in a paid search campaign, and as a result, CPC improvement is often pursued by paid-search managers.

To truly understand how to improve CPC, a paid search manager must first understand how CPC is calculated. For the sake of this article, let’s first describe major factors that go into Cost-Per-Click and then we’ll provide a few tips on how to improve it.

The Elements of CPC in your B2B Campaign

Maximum Bid

Bid is the first and easiest factor to understand. It’s as simple as inputting a single number to an ad group or a keyword, and AdWords won’t rise above it. So, if you set a max bid at $2, you won’t get an average CPC of $11. Setting a maximum bid is easy, but determining a max bid that meets your goals can be a bit of a challenge, especially in the beginning when you don’t have the data to justify your decisions. You want to have significant clicks without overspending; you want a balanced max CPC that’s going to give you ROI without breaking the bank. For more on determining your max CPC read here.

Competition

Competition is another huge determining factor on CPC, and because AdWords is an auction based service, competition can vary from keyword to keyword and market to market. Simply put, the more advertisers bidding on a single keyword, the more competitive it will be. The more competitive a term, the more expensive it will be, driving up your CPC.

Higher-volume keywords will be much more competitive, and thus, more expensive. Most high-volume keywords also convert at a higher rate, justifying the cost. If a high-priced keyword is converting and providing significant ROI, it’s probably worth the price.

Quality Score

The final factor for determining CPC is the Quality Score. Quality Score allows for the most manipulation in your AdWords account. Google rewards high Quality Scores with lower CPCs, so improving QS is imperative, especially if you don’t have the daily budget to force your way to the top of the page.

What Determines Quality Score:

  • How relevant your keywords are to your ad group
  • How relevant your ads are to your keywords
  • How relevant your landing pages are to your keywords and ads
  • Click-Through-Rate (CTR)
  • Historical AdWords performance

Tips for Improving Your B2B Campaign

Keywords: Keyword research is the foundation of paid search and finding the right keywords is how a successful campaign begins. When looking for keywords, you need to find ones that are relevant to your goals. If you’re selling garage door services, the “DIY how to install a garage door” term isn’t going to get you anywhere because that is the users intent is not to get their garage door serviced, but to service their garage door themselves. Finding keywords that match your audience, have a relevant amount of search traffic and a justifiable competition level are where you should start. Don’t neglect high competition keywords or low volume keywords if you think they fit, you can always remove them later down the road if they aren’t performing the way you’d like.

Structure: Once your keyword research is completed and you have an extensive seed list, organize those keyword into similar groups. Try to match a common term or common theme. If you have keywords that don’t fit any group, make them their own group and watch your search terms report closely to add more as they appear.

Ad Copy: Once you’ve placed your keywords into ad groups, ad copy should reflect your keywords, either by dynamically inserting keywords into the headline or by reflecting the theme of your keyword. Just make sure that your keywords are reflected in some way on the ad. Since Click-Through-Rate is important to Quality Score, placing the keyword in the headline has proven to be the most effective for good click-through rates.

Landing Pages: Similar to ad copy, your landing page should reflect your keywords. If your landing page isn’t focused to your ad group your quality scores will suffer. Landing page speed is also a factor, so even you have a great page, if it isn’t loading quick enough for Google – or even worse, your customer – it will cost you.

Ad Rotation: Make sure you have several variations of ads running on a constant rotation. If one isn’t performing the way you’d like, pause it and replace it with another. Do this until you find ads that have high CTR and convert well.

Negative Match: Too often, an underutilized aspect in AdWords, negative matching allows you to point out certain keywords to Google that you don’t want your ad to show up for. This is especially important when using broad match and broad modified keywords as Google will show an ad to anything it associates with your keywords. Removing irrelevant terms through negative matching eliminates wasted spend and improves CTR.

Low Competition/Long Tail Keywords: Finding low competition keywords through keyword research and the search terms report is another way to help your CPC. Low competition keywords, while generally lower in volume, are almost always lower in cost. Finding low competition keywords that are relevant to your campaign and still produce a decent amount of traffic is a great way to balance out your overall CPC. Long Tail keywords (keywords longer than 2 – 3 words) are great low competition keywords as the people searching them generally know exactly what they are looking for, leading to higher CTRs.

Summing Up

Cost-Per-Click is easy to manage in any paid search campaign but optimizing it is often much more complicated than it seems, especially within the nuances of the B2B market. A manager must first understand everything that goes into the metric before they can improve it and even then it can be difficult to get it where you’d like. While they are all similar, B2C, B2B and E-Commerce all have their own auctions and search landscapes, so understanding your market is just as important as understanding your metric.

It’s also important to know that, while CPC may be important, it’s not the only metric and shouldn’t be treated as such. Once CPC has decreased, another metric may dive into the red and you’ve to fix it. It’s a teeter-totter effect that can be remedied by paying attention to all of the metrics and how they correlate. Every AdWords manager should be working towards improving everything for every metric, not just one. Always work to better your keywords, your ads and your landing pages. Always be testing for something better. Paid search campaigns are never over. There’s always room for improvement.

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