How to Reduce Your Average CPC in 10 Steps

Last updated on by Hunter Sunrise in Advertising

You can find many tips on how to reduce your cost per click, but lowering the average CPC lies in improving your Quality Score.

Relevancy and intent matter and improving your Quality Score requires creating the right ads, targeted to the right people, and connecting those ads to a message-matched landing page with an offer that resonates with your target audience.

Do this right, and you can save up to 50% on CPC without sacrificing traffic or conversions. But if you don’t pay attention to details, you can pay up to a 400% premium.

Let’s take a brief look at how improving your Quality Score can lower CPC.

How improving your quality score reduces your CPC

Lowering your average CPC starts with an understanding of where this number comes from.

Google calculates your CPC using Ad Rank, as determined by:

Since Google prefers to show top-notch ads to its audience, they’ve built a system that incentivizes high-quality ad experiences. As a result, advertisers with higher-quality ads end up paying lower CPCs.

Google reports ad quality to its advertisers with a measurement called Quality Score, which consists of three factors. Quality Score, which consists of three factors:

So, by creating ads and landing pages that are hyper-relevant to your audience’s search and their needs as a customer, you will ultimately lower your CPC.

Now that you know more on Google’s Quality Score and how it relates to CPC, read on for steps to improve your CPC.

1. Adjust your bidding strategy

Your maximum bid will always limit your CPC. Therefore, modifying your bidding strategy is a shortcut to controlling your ad costs.

For example, you can experiment with Manual CPC or Enhanced CPC bidding strategies. These allow you to control your maximum bid for each keyword to stay below a given cost threshold.

By setting bids manually, you can avoid the top position—a common tactic used to avoid escalating average CPCs. Position 1 costs more than position 2, which costs more than position 3, and so forth. If you’re in a high-volume search industry, you may still be able to earn enough clicks and conversions by avoiding the top position altogether.

However, capping your maximum bids can adversely affect your CTR and Quality Score. When lowering your CPC, ensure it doesn’t sacrifice achieving enough clicks and conversions to deliver return on ad spend.

2. Avoid competitive and branded keywords

Since you must outbid your competition to win an ad auction, another way to easily lower your average CPC is to avoid competitive auctions. Bidding only on lower-cost keywords will earn you more clicks for your budget—assuming you plan to spend money on several keywords.

As a general rule of thumb, you should avoid your competitor’s branded keywords. Since people searching these terms are looking specifically for your competitor, your expected CTR and ad relevance are bound to be low. That will negatively impact your Quality Score and increase your ad costs. Plus, it’s unlikely you’ll earn many conversions on your landing pages if people were looking for your competitor.

However, this rule has some limits. For example, you may want to advertise on competitor keyword searches like “{brand} alternatives.” In this case, if you can serve up a compelling ad and landing page that positions you favorably compared to your competitor, it may be a cost-effective way to gain conversions from searchers who are already deep in the purchasing funnel.

3. Target long-tail keywords

To avoid overpaying for highly competitive short-tail keywords, target long-tail keywords instead.

Long-tail keywords are more focused, intentional searches. Therefore, it’s easier to create ads and landing pages that are relevant to that search. Increased relevance improves your Quality Score, therefore lowering your CPC.

For example, someone searching “enterprise accounting software” has a clearer intention than someone searching generically for “accounting software.” Your landing page about enterprise accounting software is more likely to deliver a relevant experience to their search, plus it’s more realistic to expect the click to become a conversion for your business.

4. Use negative keywords

Any time your ad shows up for an irrelevant search, it lowers your CTR and Quality Score, which increases your CPC in the long run.

When you use negative keywordss, you cause your ads to show up only for relevant searches.

For example, if you sell skis, you may want to broadly target searches including the keyword “ski.” However, searches like “ski conditions,” “ski pass,” “ski lodge,” and “ski hill” are all irrelevant to your business. Adding those terms to your negative keywords list will help you avoid a quickly escalating CPC.

5. Use single-keyword ad groups

To achieve a high Quality Score, your ad copy itself must be as relevant as possible to the search keyword. The easiest way to achieve this every time is to use single-keyword ad groups.

Doing so means writing unique ad sets for every keyword you target.

For example, if your product is HR software, you may target different long-tail keywords like “HR software for small business” and “enterprise HR software.”

Rather than sticking each of these keywords into one ad group with ads that broadly target “HR software,” you can create single-keyword ad groups for each keyword, with one set of ads specifically written about small business, and the other ad set written about enterprise.

This focus makes it easy to write ads that are hyper-relevant to the exact search, touching on unique selling points that broadly targeted ads won’t touch on.

Using this strategy will improve CTR, lower your CPC, and boost conversion rates. Not bad.

6. Segment your audience and your ads

If you’ve been doing PPC for long enough, tips 1-5 may not be new to you. Taking your campaigns to the next level starts with segmentation.

Most PPC ad campaigns either assume there’s only one type of customer, or overlook their consumers altogether.

For example, many PPC specialists use the same formulaic keyword-infused ad copy for every ad campaign, regardless of who they hope to attract. If the goal is to create a highly relevant ad experience, you should have a crystal-clear picture of your audience.

Start by defining audience personas with demographic data (e.g. age, profession, location, gender, income, and relationship status) as well as psychographic data (e.g. interests, values, attitudes, and behaviors). Then, use these personas to inspire your ad campaigns.

In the Google ad targeting options themselves, you can use traditional targeting segments like geography, device, day of the week, and hour of day.

To take things a step further, use your psychographic profiles to tailor your ad messaging and landing pages to appeal directly to your audience’s emotions.

So not only will you improve your CPC, but you’ll also boost the bottom line.

7. Follow conversion-centered design principles

The experience is your best opportunity to impress your audience and improve your Quality Score. When lowering CPC, advertisers too often focus on the ads themselves.

Conversion-centered design means creating a landing page with the objective of achieving a specific goal for your page visitor. Every element on the page plays a role in getting the visitor to that goal.

Creating a conversion-centered design includes these best practices.

Following these best practices is more likely to drive conversions and improve your Quality Score and CPC.

8. Employ a 1:1 ad-to-page ratio

Just as you should only have one keyword per ad group, you should also have a 1:1 ratio of ads to landing pages.

HubSpot research suggests companies with greater than 40 landing pages generate 12 times more leads than those with fewer than 5. Why is that?

When someone clicks an ad, it’s because the messaging in the ad resonated with them in some way. If the landing page is message-matched—meaning it features the same pitch as the ad—it’s likely to resonate more strongly.

If you have 20 different ads pointing to a single landing page with one message, the landing page can’t possibly match all 20 ads effectively. Using a unique landing page that’s message-matched to each ad, you can ensure extreme relevance of your landing page—a vital element of Quality Score.

You can take this even further using your audience segments. By tailoring ad/landing page combinations to each audience segment, you can reinforce your segmented messaging even further.

9. Test and optimize your landing pages

Following landing page best practices can only take you so far. By constantly testing and optimizing your landing pages, you can boost Quality Score and conversion rate gradually over time.

To get the most out of your pages, conduct A/B testing and multivariate testing.

A/B testing involves testing your original landing page design against an alternative design that differs by one or more variables.

For example, you could modify any of the following:

Multivariate testing involves testing changes between multiple page elements and their interactions with each other.

For example, you could test the impact of switching between two different headlines, two alternative button colors, and two form formats. This strategy gives you eight separate page combinations, allowing you to discover which page format performs best.

Not only does this lower your CPC, but it also earns you more conversions from your paid traffic.

10. Keep testing and optimizing your ads, too

Your ads should never stay static. Over time, replace your worst-performing ad copy with new text to compete with your best-performing ads.

Keep experimenting with ad extensions, conduct A/B tests with the copy itself, and don’t be afraid to try new messaging to keep things fresh.

The Take-Home Message: Focus on relevance

Reducing your CPC is all about increasing your relevance to your audience in the pre- and experience.

Creating personalized, tailored ad sets and landing pages that target keywords intelligently, you can provide a first-class ad experience for your audience while simultaneously lowering your cost per click.

Pair these techniques with fully optimized landing pages

Lowering your CPC is only part of your marketing strategy—optimizing your landing pages that follow the click is another. Instapage is here to help. We offer three different plans to help take the stress out of building, optimizing, and converting—helping you to create better landing pages and see better results. Sign up for an Instapage 14-day free trial today.

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