e Trends to Explain Why Your CPC is Rising //
You may find that your cost-per click is rising even if you follow all the best pay-per–click advertising practices. Because of significant market shifts in digital advertising, small optimizations to PPC ads may not be sufficient to offset them.
What is CPC? How can you identify marketing changes that could increase this metric? Let’s explore.
What is CPC?
CPC, or cost-per-click, is an advertising bidding cost that advertisers pay each time a user clicks on their ad. How is cost-per click calculated? The cost per click can be calculated by multiplying the cost of an advertising campaign by how many clicks.
It’s crucial to be aware of three market trends that could impact your cost-per click.
- Platform competition
- Personalization capabilities
- Customer expectations
We’ll be looking at each trend and how it may impact your CPC in this post.
Rising platform competition
Pricing for online advertising is determined primarily by supply and demand, just like in any other market.
Auctions determine ad cost. Your CPC directly relates to how many of your competitors you are bidding against and how much they are willing to pay. An increase in platform competition is the leading cause of a sharply increasing CPC.
COVID-19, for example, caused an abrupt uptake in digital advertising competition in 2020. In 2020, the global pandemic changed the world fundamentally. We moved our professional and personal lives online due to widespread lockdowns. This led to an increase of online shopping and ecommerce sales.
2. Rising personalization capabilities
Your Quality Score is another important factor in determining your CPC. Google’s Quality Score measures expected click through rate, relevance and landing pages experience.
Quality Score is directly influenced by the CPC ad auction. Your CPC will rise if your competitors have a higher Quality Score.
If your CPC is rising, it’s possible that your competition is doing a better job of delivering relevant ads. Personalization is key to creating a meaningful ad experience.
Personalization is the art of creating unique ads for each segment of your audience, as opposed to using one-size-fits all advertising strategies for your entire customer base.
Personalization should be a part of every advertising campaign. Advertising should be tailored to the needs of the target audience. Landing pages should also reflect the message.
This raises the question: Why is only a small fraction of marketers using personalization?
Most advertisers don’t have the time or resources to create landing pages and ad campaigns that are highly segmented. It’s labor-intensive. According to Gartner 65% of marketers find this process overwhelming.
3. Rising customer expectations
The online advertising industry is a well-balanced ecosystem. As advertising technology evolves, so do audiences’ expectations.
Personalization, for example, allows advertisers to show relevant content to every potential customer. This improves the user experience. As a result, users adjust their expectations and raise overall standards.
Customers expect personalization. According to Google Research 61% of shoppers expect brands tailor advertising experiences to suit their preferences.
Quality Score is directly related to customer experience. It measures the ad’s relevance and quality relative to a particular search. Advertisers who fail to meet higher customer expectations will see lower Quality Scores and increased CPC costs.
To optimize your campaigns, lower your CPC
It is important to keep your CPC under control by increasing the relevancy of your messaging during the pre-and post-click experience.
To give your audience the experience they want, it is important to create customized, targeted ad sets and landing page that target long-tail keywords. Instapage allows you to create engaging experiences for all your audience members. Get more information about Instapage, the leading landing page platform for marketers. Schedule an demo of Instapage here.
