Trends We’re Seeing On Google AdWords

My firm manages many Google AdWords accounts over a very broad range of business sectors. There are a few trends that we have seen lately that we thought we’d share with you.

In December through early March we saw a distinct drop in the cost per click and opportunities to move down the maximum cost per click setting for many accounts. For some we were able to bring them back to a pre-September figure when Google grabbed for cash in a big way with their September “Quality Score Update”.

Starting in mid March we’ve started to see a rise in the cost per click. Impressions are still low for some market sectors and so this is most likely not market pressure, but rather Google making adjustments to account for a loss of income by working to raise the minimum bid on their end to be in the auction. With impressions being for some accounts one third less than pre-February figures, this sudden increase in CPC plus continued low impressions is disconcerting to say the least.

Conversions for many accounts are still strong, but we are seeing in several industries an anomaly where Yahoo is actually now generating more conversions than Google and in some cases at almost half the cost per click.

My recommendation to clients is that now is the time to very carefully review the cost per conversion over a three month period, calculate in phone calls and individual sales history, and consider altering your pay per click budget to make sure that your advertising dollars are an investment and not an expense.

For one client after such a review we dropped the AdWords budget by one third and increased the Yahoo and MSN budget and are closely monitoring organic placement and click activity.

For some clients we are recommending that the extra money that may be found from these efforts be used to fund a local Yellow Page ad to try to expand their reach more deeply into local markets, especially if they sell to a local region and currently have no Yellow Page placement.

I’m sure Yellow Page reps love this recommendation (no they are not paying me), but as Local Search still has challenges, for some businesses the Yellow Pages will still generate nice returns when used in conjunction with a smartly managed  AdWords program.

What trends have you seen on your AdWords account, click comments below and let us know what you’ve seen.