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Know The Factors That Affect Pay Per Click Rates

Blog / Know The Factors That Affect Pay Per Click Rates

If you're new to pay-per-click marketing, the costs can be as confusing as they are enticing. Most businesses that started out with their first PPC campaigns might have asked, "What's the average cost per click"?

It is an interesting question to ask because it forces businesses to be innovative in getting their message across and finding new ways to increase sales without spending more money than they had. While there's no one answer for what an "average" cost per click is, here are some factors that will have a huge impact on how much your campaign will cost:

Budget

Your budget is the amount you are willing to spend on your campaign. It’s determined by the amount of money you have available to spend, and by the amount of money you are willing to spend. You can set a maximum budget for your campaign in the AdWords interface by selecting Max CPC bid (or Max CPM bid).

If you set a budget lower than what Google thinks it will cost per click (based on its estimates), then it may show fewer ads than it would otherwise show.

This is called underbidding in AdWords because ads were shown less than they could have been shown given their relevancy score. The opposite effect also happens when you overbid: Google will display more ads than they think would be appropriate given their relevancy scores based on cost per click estimates or impressions estimated costs and actual impression performance fees incurred from third parties (such as Facebook).

google pay per click rates

Quality Score

Quality Score is a measure of how relevant your ads are to the keywords you are bidding on. The higher your Quality Score, the more likely it is that an ad with a high score will appear at the top of Google’s results and get more clicks.

Your Ad Rank and Quality Score can be determined by Bid price. The bid price you set for each keyword in your account determines where your ads show up on Google Search results in pages, as well as what percentage of searches they have access to (i.e., if you bid £1 per click for “car insurance” but someone else bids £2 per click, then their ads will show up twice as often because they're paying double what you're paying).

The better position/more exposure an ad gets, the more likely it is to attract clicks from searchers; accordingly, advertisers are willing to pay more for those prime positions!

Targeting

The targeting of your ads is the most important factor in determining pay per click rates. It's a combination of all the factors that determine who sees your ad, where they see it, and what they see. There's a need to define your audience, the keywords, the ad copy, the landing pages and the conversion pages.

pay per click rates

Relevance

Relevance is a measure of the quality of your keywords, ads and landing pages. It’s important to ensure that the content on your landing page is relevant to the ad copy that caused a visitor to click on it.

For example, if someone searched for “Best places in New York City” and clicked on an ad that reads “Book tickets to Great American Ballpark in Cincinnati” then they would most likely be disappointed when they arrived at their destination and found out that they were actually in Cincinnati instead of NYC. This is because there was no relevance between what was promised by the advertiser (NYC) with what was delivered (Cincinnati).

For this reason, Google considers these types of clicks as low-quality ones which leads them to downgrade your account's performance score lowering CPC rates from advertisers who are willing to pay more than you deserve based on their conversion rate per visitor or leads generated by such clicks.

Competitors

There are a few different factors that affect a Google ads pay per click rate. The most obvious is the competition. If you are bidding on keywords where there are many other advertisers, you will likely pay less than if you were the only advertiser bidding on a keyword or set of keywords. You can see how many competitors there are by looking at AdWords' "competitor data" (a feature of AdWords), which is available for free to all users.

Other factors include:

  • Your own bid price - if your bids are high enough to stay in the top spot, this may cause your costs to increase significantly; however, it can also help attract more clicks and drive up sales volume overall.
  • Linking ads to landing pages with relevant content - when linking ads directly with relevant landing pages, users tend to respond better and make purchases more often.
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Seek help if you're not sure.

Calculating the cost of pay-per-click campaigns is complex, so seek help if you're not sure. Google does all the heavy lifting for you when it comes to calculating your pay-per-click rates (or CPCs). They know what you are bidding on, how much you are bidding and how much your competitors are bidding.

This information can be found in their keyword planner tool; however, there may be some additional metrics that they don't provide to determine whether or not your CPC will drop or rise after a change in either search volume or competition level.

These could include:

  • The number of clicks per keyword bid
  • The average conversion rate across all keywords related to this campaign
  • The average profit per keyword bid

PPC can be a great source of business for your company, but it's important to understand the factors that affect Google pay per click rates and how they impact your bottom line.

PPC Agency London is one of the top rated pay per click companies that can guarantee the best PPC rates.

That's because PPC Agency London has a team of experienced professionals who are experts in pay-per-click marketing. We understand the factors that affect pay-per-click rates and how to optimise campaigns to get the best results for their clients.

Our years of experience and knowledge of the industry allow us to negotiate the best rates with advertisers and get our clients the most bang for their buck.

Call us today to find out how we can help you maximise your PPC campaigns and get the most out of your budget!

Jason Ferry
Author: Jason Ferry
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