Since September 2007, I have been watching the cost per click escalate in Google AdWords. I have seen nearly a 20% increase in this period in the cost per click to achieve the same position on the page. Part of the increase in click cost is due to the number of advertisers moving into Google AdWords and part is due to the philosophy that many business owners have that they want to own the number one spot in sponsored search. Both have created a market where for some white collar business sectors we have seen clicks move from $6.50 to over $10.00.
As the cost per click increases, the budget needs to increase or the number of clicks per day and month shrinks. For many of the accounts we work on, the budget cannot be increased, so what can you do? I have found that by dropping the cost per click and lowering the expectation of ad position on the page we can double or triple the number of impressions and in many, but not all cases, we can increase the number of clicks from 10 to 30%. For many businesses this increase in activity can generate more selling opportunities, micro conversions, and be a very savvy strategy, but it requires owner buy-in and careful account monitoring.
Most people will agree that more clicks are better than less clicks in the top positions. Not always do ads higher on the page in Google convert better than those lower on the page. For some businesses, it is all a numbers game, more clicks means more sales. But I have found from experience that this strategy does not fly on Yahoo and is not valid for every business, every client, and every market sector.
If you are tired of escalating click cost, now is the time to take a careful look and test dropping your CPC to see if you can squeeze out more activity for your program.
