Today we are going over cost per click and explain exactly what it is, how it works, and how it can be very confusing.

When I do a search for the keyword “roofers” on Google, there are a number of ads that come up at the top.

We have one here, and it’s designated by this green ad square.

There are typically 3 ads at the top of the page and down at the bottom, there are three more. Now these ads are free to post in these spots. This is not costing these companies any money.

However, once I click this ad, that company will be charged a specific amount. How much? We don’t know. But it can get quite expensive.

Cost-Per-Click Defined

Cost Per Click is the amount that it costs the advertiser each time that someone clicks on one of their advertisements.

But what will happen is, once I click one of these ads, and I’m not going to do it because I don’t want to falsely charge one of these companies, but once I click one of these ads, I will be taken to what’s called the landing page, or the page that they’re directing us to.

Now depending on my experience, if I click on this ad and I go to their landing page and I don’t see what I’m looking for right away and I just click the back button, Google is recording that. They are going to say, you know what, they didn’t find what they’re looking for and they make a note of that.

Now, if that happens to a bunch of people, then every time that somebody types in the word roofers and somebody clicks on this company’s ad, they’re going to be charged more per click.

But, if I get to that landing page, and I find what I’m looking for and I fill out a form, or I take the next step and I get to what’s called a conversion, then Google also records that and they look at it and say, you know what, people who are clicking this ad are finding what they’re looking for and we’re going to actually charge this company less per click.

The cost per click will vary based on quite a few factors.

Number one, it could be based on industry. Real estate, credit cards, insurance. ALl of these are very expensive places to advertise.

Other things like T-shirts, certain types of clothing, maybe tennis shoes. Maybe those aren’t as much to advertise per click.

Now a lot of AdWords’ users will log into their campaigns and say, “I keep getting these errors that say; below first page bid of $29.60. Look at this one, $39.50. I can’t afford to spend that for one click”.

Now what’s happening there is Google is telling us a few things. Number one they’re telling us it’s an expensive keyword, but they’re also saying, “The experience that you have when people click this keyword may just not be what’s working well.”

It could be that the ad isn’t very good. Maybe the ad is misleading people to click on it and they’re not finding what they’re looking for. It could be the fact that once they click that ad, they’re being taken to a landing page that has nothing to do with what they clicked on or what they’re looking for is very hard to find, and people just aren’t converting. It could be a number of different things.

It could also be (this is for a roofing campaign) that these clicks are very expensive. But one thing I want to point out is the the $29.60 figure. Just because you change your max cost per click to that amount, does not mean that every time that somebody clicks it, that it’s going to cost you that amount. Let me show you further proof of this.

In this particular ad group, this max cost per click for this keyword runs $25.31, but, we’ve only been paying $22.

 

Here’s one for $22.77, but we’ve only been paying $15. Now once again, somebody is looking at that, going, how can companies afford to pay for that?

This particular keyword is for a roofing campaign and it’s for a brand NEW campaign. There’s a lot of changes that need to be made in this campaign to bring these costs down. So we would expect that over the next couple of months that we will be dropping this average cost per click significantly.

But, already, in another ad group, we know that they were paying approximately $22.00 per click. So far, we’ve gotten it down almost $7 a click.

So just because it’s set at that max cost per click does not mean that we will be charged that. But the idea is to give the searcher exactly what they’re looking for.

Get the Most Out of Your Cost Per Click – CPC

Make sure that when somebody clicks your ad, your ad is describing exactly what you want them to find so that when they click on it, they’re taken to that exact page.

Don’t just send them to the front page of your website. Send them to the page that discusses what your ad and what the keyword has to do with.

Hope that helps…

-Mike