{"id":22853,"date":"2023-10-18T21:51:54","date_gmt":"2023-10-18T16:21:54","guid":{"rendered":"https:\/\/www.karooya.com\/blog\/?p=22853"},"modified":"2023-10-18T21:51:55","modified_gmt":"2023-10-18T16:21:55","slug":"ppcchat-keeping-costs-under-control-in-todays-increasingly-automated-ppc-world","status":"publish","type":"post","link":"https:\/\/www.karooya.com\/blog\/ppcchat-keeping-costs-under-control-in-todays-increasingly-automated-ppc-world\/","title":{"rendered":"PPCChat | Keeping Costs Under Control in Today\u2019s Increasingly Automated PPC World | 17th October 2023"},"content":{"rendered":"\n

During this week’s PPCChat discussion, host Julie F Bacchini<\/a> sought experts’ views on PPC cost increase, Is this cost increase limited to any specific platforms or campaign, are they explaining cost increases to clients or stakeholders? and more.<\/p>\n\n\n\n\n\n\n\n

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Q1: Have you seen an increase in PPC costs in the last 12 months? If so, by how much? On which platform(s)? And in what industries?<\/strong><\/h4>\n\n\n\n
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I have been seeing increases in CPCs in the last year, for sure! I am also seeing more and more reports of people seeing wild increases in their CPCs, particularly in Google Ads. @NeptuneMoon<\/a><\/p>\n\n\n\n

Absolutely CPC increases are rampant. I’ve seen this on ecomm and lead gen accounts.  One of my lead gen accounts have seen CPC increases over the past 2 weeks from 2X to 5X. @HollyRobowski<\/a><\/p>\n\n\n\n

Glad you joined here @HollyRobowski<\/a> – your post & the discussion around it inspired the topic. @NeptuneMoon<\/a><\/p>\n\n\n\n

The general trend on CPCs is always up, so they’re definitely higher than last year. I think volatility though is at an all-time high. We’ll see CPCs increase 50% WoW with absolutely no changes to the campaign, for example. @CJSlattery<\/a><\/p>\n\n\n\n

Do we think these giant swings with no easy identifiable cause are just Google googling (a.k.a. shaking the cushions, squashing, etc.)? @NeptuneMoon<\/a><\/p>\n\n\n\n

I don\u2019t typically pay that much attention to CPCs but I\u2019ve seen a steady upward trend in CPAs which are driven mostly by CPC increases. I do lead gen only, no e-commerce @Pete_Bowen<\/a><\/p>\n\n\n\n

The more you trust machines the less stability there is. Some of us are old enough to remember the high-frequency trading flash crash in the markets. @CJSlattery<\/a><\/p>\n\n\n\n

Increase in CPCs for some clients. Some on Google\u2019s path and some with more competitors in the market. @duanebrown<\/a><\/p>\n\n\n\n

I work entirely in the comm space (mainly fashion, jewelry), and earlier in 2023 we were seeing a downward CPC trend for quite a few clients, but now things are pretty dramatically up. Speaking specifically to Google Ads. @McKenzie Davis<\/a><\/p>\n\n\n\n

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Q2: If you have seen cost increases, are they limited to any specific campaign type or platform?<\/strong><\/h4>\n\n\n\n
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Costs going up wall to wall and back again. We spend a lot on Google and Microsoft and it\u2019s just\u2026. how high can it go some months. What will 2024 hold? @duanebrown<\/a><\/p>\n\n\n\n

Just did a quick look at our highest-spending Google client and YoY click costs are up 83.3% @CJSlattery<\/a><\/p>\n\n\n\n

I think that is a fair question @duanebrown<\/a> – we all expect some increase in CPCs, right? Like adjusting for cost of living type scenario. But the last couple of years I have had the specific conversation with clients that they absolutely cannot expect to spend the same $$ and get the same results. @NeptuneMoon<\/a><\/p>\n\n\n\n

We just moved one client off eCPC for shopping (being deprecated and the CPC increase when we moved to tROAS was 175%! @McKenzie Davis<\/a><\/p>\n\n\n\n

You can set a max CPC for a shared bidding strategy which is what we do with most clients. @CJSlattery<\/a><\/p>\n\n\n\n

So you setup a shared tROAS bid strategy and set a max CPC cap on it to make sure you don’t get hosed like that. Can also be the tROAS is too low. @CJSlattery<\/a><\/p>\n\n\n\n

I did this and volume tanked @HollyRobowski<\/a><\/p>\n\n\n\n

CPC’ss were historically $20-$40 and I saw them going up to $60+ so I applied a portfolio bid strategy with a max cpc of $50 to be safe and volume decreased significantly. @HollyRobowski<\/a><\/p>\n\n\n\n

Agree Collin, I\u2019ve been using the portfolio strategies, even if applied to one campaign, to just control those one off insanely high CPC clicks. In a few campaigns\/accounts, I was noticing miscellaneous clicks $40-$50+ for BRAND! (in a space that\u2019s usually closer to $2). The portfolio helps mitigate that. @McKenzie Davis<\/a><\/p>\n\n\n\n

Volume only came back when I removed the CPC limit and CPC’s went up between $80-$110  @HollyRobowski<\/a><\/p>\n\n\n\n

I feel like we are entering the era with Google where you will be able to use<\/em> whatever bidding strategy you want, technically, but\u2026 you might see your volume plummet when you put limitations in place. I want to be wrong, but I think this is where it is headed. @NeptuneMoon<\/a><\/p>\n\n\n\n

Holly, id say set that cap to avoid the \u201cworst case\u201d high-cost clicks. for example, I still have a cap of around $10-$15, even though I want my average to be $2 or so. Just wanting to avoid any of those one-off completely unacceptable click costs that raise the whole average. @McKenzie Davis<\/a><\/p>\n\n\n\n

That’s how we use it too @CJSlattery<\/a><\/p>\n\n\n\n

I think we also have to prepare ourselves and our clients\/stakeholders to get used to some obscenely expensive clicks being just par for the course going forward too. Putting in at least some kind of backstop makes sense for as long as we are able to do so. @NeptuneMoon<\/a><\/p>\n\n\n\n

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Q3: If you have seen cost increases, have you been able to determine the reason for the cost jumps?<\/strong><\/h4>\n\n\n\n
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There’s really two factors at play which I feel like is always going to be the case. Increased competition pushing up costs and cushion-shaking behaviour from Google. We know that the average CPC for hidden queries has risen at a faster rate than visible queries, which is obviously cushion-shaking on behalf of Google. @CJSlattery<\/a><\/p>\n\n\n\n

So I think the answer probably for everyone is “all of the above” @CJSlattery<\/a><\/p>\n\n\n\n

In performance max not so much, but agree with the above. @McKenzie Davis<\/a><\/p>\n\n\n\n

I feel like we have less insight into competition now too\u2026 which definitely impacts CPCs. @NeptuneMoon<\/a><\/p>\n\n\n\n

Sometimes it has been more competitors entering the space. Seems like everyone thought they could have an ecom shop because of the pandemic. @duanebrown<\/a><\/p>\n\n\n\n

Do we think that any of the \u201cincrease in competition\u201d is a result of looser matching? For example brands matching to each other? Has that artificially added competition with the matching being what it is? @NeptuneMoon<\/a><\/p>\n\n\n\n

I do notice if we pin in RSA\u2019s it actually makes a pretty substantial impact to CPC. @McKenzie Davis<\/a><\/p>\n\n\n\n

We typically go unpinned, but when we\u2019re supporting promotions and pinning with a purpose costs go up (alongside higher CVR\u2019s tho so it balances out at that time) @McKenzie Davis<\/a><\/p>\n\n\n\n

How dare you restrict the machines @McKenzie Davis<\/a> @NeptuneMoon<\/a><\/p>\n\n\n\n

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Q4: If you have seen cost increases, have you been able to do anything to bring costs back down to previous levels?<\/strong><\/h4>\n\n\n\n
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One thing that I just started testing this week is pulling non-revenue driving terms (thinking about intent) from brand campaigns that are on tROAS and putting these into a dedicated, low-bid eCPC campaign. Still want coverage here, but terms like reviews, returns, store locations, etc have high CPCs in tROAS and tend to have a different intent than direct to purchase. @McKenzie Davis<\/a><\/p>\n\n\n\n

Too early to have feedback yet, but can share shortly. @McKenzie Davis<\/a><\/p>\n\n\n\n

Good old-fashioned heavy use of negatives can help keep the crazy matches lower. @NeptuneMoon<\/a><\/p>\n\n\n\n

Sometimes we can get costs back down a little but not 100% to where they were. Lots of testing and looking at CPCs, CPA, ad copy\u2026. etc. @duanebrown<\/a><\/p>\n\n\n\n

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Q5: How are you explaining cost increases to clients or stakeholders? And are they concerned about this issue?<\/strong><\/h4>\n\n\n\n
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Clients are always concerned with increased cost of acquisition. It used to be a much simpler formula and process for keeping it in the range they were comfortable with. Now? It feels like there are surprises happening every week with regard to costs, traffic and conversion levels, etc. It\u2019s a lot to explain to clients. Particularly when for Google Ads at least, a lot of this stuff has not historically applied to that platform. Learning phases? What are we Facebook? And all the coverage of the Google trial is certainly making savvy advertisers ask legit questions. @NeptuneMoon<\/a><\/p>\n\n\n\n

I explain that’s how things are going. I find that if you use broader match types your CPCs go through the roof so to maybe avoid broad. But to accept that costs will continue to go up and that in order to just tread water we’ll need to increase conversion rates or they’ll need to raise prices. Rates won’t go down. They’re only going up. @CJSlattery<\/a><\/p>\n\n\n\n

There’s no magic formula for CPCs to go down. Unless we find ourselves in a massive recession where demand craters but that’s a much bigger issue that I don’t think anyone is going to enjoy, and even then I think Google is going to put a very high floor under prices to avoid having them go down that much. @CJSlattery<\/a><\/p>\n\n\n\n

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PPCChat Participants<\/strong><\/p>\n\n\n\n