Questions

How to lower CPC for keywords that have no competitor ads but high CPC bids, also with high buying intent?

Hi everyone, Campaign: Search Keyword Planner Competition: Low Keyword Planner Estimated Bid: $20 Actual Ads when searching on Google: No Ads So this is quite a unique situation for me, those keywords have no competitor ads shown in the targeted area(checked with Google location changer). I guess, Google applied the Ad Rank Threshold to decide a high bid for that keyword, because those search terms belong to a new trend and are highly commercially valued. I did a total of $100 test to be statistically significant for the CPC results, but it doesn't look to be less than $1.5. On the other hand, the conversion rate is around 5-7%. But with my AOV being $64, I need to lower my CPC to keep a positive ROAS. I can do some product-wise changes such as bumping the price up or adding some upsell to the order. But what about keeping the offer the same and doing some revising on advertisement? I would like to hear your thoughts about the advertising-side. What would be your next move in that situation? Thank you for your suggestions!

2answers

First of all I am going to assume you meant a CPC of $ 15 and not $ 1.5 because the latter would make you ROAS positive at a 5% conversion with $ 64.

My second assumption is that a CR of 5-7% is your average CR and not for this keyword because at $ 15 / click you would not have enough clicks to get a CR in a $ 100 test-

If this is correct then unfortunately you have not been near a statistical significant result because with $ 100 you can only have 6 clicks. Even if it was $ 1.5 and we were talking about 66 clicks this is still not statistically significant. I am sorry but this is far from statistically significant.

Statistically significant would be at least a few hundred clicks spread over a minimum of 5 days (ideally 7 days).

Now about your question of what you can do on the advertising side. One thing you can do is to improve your Quality Score. Check out this Google article where to find it and the components of it:

https://support.google.com/google-ads/answer/2454010?hl=en

Also check the Expected CTR as described in the link above. This might be a reason why this keyword is so expensive. If you can a better CTR than Google expects your cost might go down.

Of course as usual the overall relevance of the keyword to your ad and your landing page is also important. So if it makes sense from a marketing perspective you could tweak your ad incorporating the keyword. You can do all this by using experiments and only changing one variable. But this is all very theoretical without knowing your correct situation.

However before you do all that: ask yourself this is it all worth it? How much volume does this keyword get? What impression share are you getting? How many additional conversions can you most likely generate, even if cost were not an issue? And then decide if it is worth trying or if there might be an easier way to improve/ expand your advertising.

One more tip: You were asking about the advertising side. I always tell clients to look out for possible micro conversions. You can think of micro conversions as sign post along the way to the goal (e.g. reading a certain article, visiting the site x times, signing up for the newsletter). If you give Google Ads all this additional data there algorithm can create a much more detailed model of your ideal customer because you give it more input to work with.
Then you will get more quality customers which in turn will increase your CR and decrease your CAC.

If you need help just give me a call.

All the best

Gerd TF


Answered 10 months ago

Target ROAS is the bidding strategy where Google Ads will set your bids to maximize conversion value based on the return you want from your ad spend.
You can read more here: https://adespresso.com/blog/google-ads-bidding-strategies/
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath


Answered 9 months ago

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