…ask what you can do for Google.
To effectively lower your cost-per-click (CPC), and therefore your cost-per-acquisition (CPA) or cost per sale, you need to first appreciate Google’s perspective. If you understand what motivates Google, you’ll understand what Google AdWords can do for you and better understand how to manipulate the system to your advantage:
1. Obvious perhaps, but Google is a SEARCH engine. Its job is to make sure that the user finds the most relevant results, first time, every time. Google leads the search market by a very wide margin because it focuses so hard on this principle. If users consistently see results irrelevant to their search, there’s a strong possibility that they’ll switch to another search engine that works better. That’s not what Google wants.
2. Whether results on Google are natural listings or paid ads, this same principle applies. Google wants your ads to be relevant to the keyword on which you are bidding. The ads that are most relevant WILL appear in the higher positions because that’s what motivates Google. Not how much it earns for each click fee, but how relevant your ad is to the keyword.
3. Google measures your ad’s relevance to each keyword in a number of ways; the keyword appearing in your ad, the keyword being mentioned a number of times on your landing page. But most importantly, Google measures the relevance using the most reliable method: users vote with their feet every time they click – generating your click-through-rate (CTR) statistic.
4. When your keywords achieve a high CTR, Google will promote them up the ranking without you needing to increase your bid. More importantly, once you reach those top one or two positions, you can begin to lower your bids and still achieve position 3-4 and continue to retain a good CTR.
5. Maintaining a good CTR in positions 3-4 will again push your ads to positions 1-2, and again you can reduce your bids, repeating this cycle as often as possible whilst still maintaing those important top positions.
To lower your CPC and CPA – you must first satisfy Google’s first rule – RELEVANCE.
Learn more about how to lower your CPC by reading the AdWords Success Guide.
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