Brand Cost-per-clicks on the Rise in Google: Causes and Ways to Combat

Post by Kali Walker, Media Manager and Mary Sinker, Media Manager

Many advertisers have noted rising cost-per-clicks (CPCs) for brand terms running on Google. Where are the rises in click-costs coming from? We’ll cover some possible causes of this upward trend, as well as a few ways to combat it.

Possible Causes:

1) Google Raising Minimum CPCs

  • Competitors aren’t the only factor inflating the cost of branded keywords. Sometimes it’s Google, as they control minimum CPCs which can fluctuate regardless of how much competition exists for a given query. According to a report in 2014, it was found that estimated minimum CPCs increased 40% between 2012-2014.

2) Fewer Ads on the Search Engine Results Page (SERP)

  • Fewer ads are serving on the SERP, lending to a decline in impressions. Part of this can be explained by ad extensions taking up more real estate and pushing ad positions down on the page.
  • More and more searches are happening on mobile devices. Due to the smaller screen size, mobile phones by nature host fewer ad spots than desktop or tablet devices, creating increased competition in mobile auctions.
  • It is possible that Google is simply serving fewer ads. As a result, advertisers are bidding up for top positions out of fewer ad spots available on the SERP.

Ways to Combat Rising CPCs:

1) Headroom Testing

  • Review brand keyword bids and pull back on any that are significantly higher than actual CPCs. By closely monitoring brand bids and actual CPCs, advertisers can find the sweet spot between maintaining coverage while avoiding paying more than a profitable click would warrant.

2) Monitor the SERP for Trademark (TM) Violations

  • Regularly monitor the SERP to catch any advertisers improperly using your brand trademark in ad copy to help reduce competition and ultimately lower brand CPCs. If you identify a trademark violation, right click the ad to copy the link address and share with Google to have the ad removed from the SERP. Keep in mind, there may be some instances where Google deems the ad context acceptable within their trademark policy. You can review the details of their policy here.

3) Implement More Ad Extensions

  • Ad extensions can significantly help improve ad rank, and the more you have, the better. Google determines which ad extension(s) to show based off an advertiser’s max CPC, ad rank and position to determine whether that extension (or combination of extensions) will boost click-through-rate (CTR) and performance.
  • If two advertisers have the same bid and quality score, the ad with greater expected CTR will likely appear in the higher position on the SERP. Thus, to attain stronger positioning, advertisers should utilize all relevant ad extensions before increasing brand keyword bids. Read more on the various ad extensions available here.

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