How to Reduce Costs of My Paid Search Campaigns

CPC, CPM (cost per 1000 impressions), CPA, cost … so many monetary metrics to track and optimize. How do we lower the cost on these crazy acronyms? Simple: lower the budget. Done, right? Well, it’s not quite that simple, because the goal is to maintain performance. It’s not just about lowering cost—it’s about creating an economical spend model where we are squeezing the most performance out of each dollar.

Let’s go over a few of the most effective tactics and optimizations. For today, we will be focusing on the front-end channel metrics in Google Ads.

Quality Score

Improve your quality score in order to lower your cost per click (CPC). This is often the most overlooked metric when it comes to optimizing front-end metrics. The higher your QS, the less you have to bid against the competition, because the overall user experience will (most likely) be better.

There are many factors that can go into improving QS. The most important factor is the expected click-through rate. The ads absolutely need to be relevant to the landing page and keywords that are being put forth. If a user is searching for a solution using a specific keyword, a relevant ad needs to be shown to them, and that ad needs to drive to a page relevant to those search terms. This is the simplest way to improve your ad relevance, which increases your click-through rate, which in turn increases your quality score.

Keywords

Add phrase and exact match keywords that are highly relevant to your product or service. These highly targeted keywords will usually have a lower search volume, but also much less competition in the space, allowing you to advertise on them at a fairly low cost. Because these keywords are super refined and relevant, they contribute to a higher quality score as well. The more broad or generic the keyword is, the more competition around it—not to mention that the actual search intent around the keyword may not even be relevant to your business. This will drop your click-through rate. Bye-bye, quality score.

Use negative keywords. Negative keywords will help prevent your ads from being triggered on irrelevant searches. The broader your keywords, the more you should engage in search term monitoring and adding to the negative keyword list. You’ll quickly find what insane search terms actually triggered your ad.

Separate high-performing keywords into tiers. If you have a set of keywords that vastly outperform others in their respective ad groups, it is time to create a tier one list. This allows you to allocate a specific budget for these higher performers. These are the keywords that are going to drive the highest performance at the most economical cost. 

Landing Page

It’s all about the user experience—load times, ease of navigating the user interface, and so on. Some marketers forget that their job doesn’t end after an ad click. The landing page experience plays a large role in quality score. It is important to work with the UI/UX/CRO team to ensure that the landing page stays optimized and speedy. If your goal is lead generation, make sure the form is at the top.

Bidding

Finally, here comes bidding. With all the automation in bidding strategies now, it’s easy to forget you still have control over your bids. Don’t be scared to start off with a manual bidding strategy (in fact, this is how you should launch a campaign, until there is enough conversion data to support an automated bid).

Most marketers think increasing your bid will always get you the best performance. This is not true. Sure, a higher bid can get you more visibility and clicks, but this doesn’t mean they will be valuable clicks. You want to look at the average CPC and see how much you can lower your bid closer to this average without dropping performance.

It’s a slow game you want to play, and over time, you can watch your performance stay steady and your average costs drop. If Google Ads is performing well (whether it's ad rank or conversions) at a CPC that is lower than your bid, why not lower your bid to either match or undercut the average?

There are many more tactics that you can implement to achieve lower costs in your paid search campaigns. Outlined above are just some of the easiest ones to implement, and they all circle around a similar theme of relevancy and quality.

Except for the bidding, that’s just plain math.