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Old 23rd August 2010, 11:24 AM   #19
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Join Date: Jun 2010
Posts: 133

If you want to decrease your CPCs, you need to improve your quality score for the keywords in your ad groups. There are lots of ways to do this. Quality score is not JUST based on CTR. It's based on several other factors.

Having a high quality score means your ad will be shown in higher positions for lower CPC costs. In other words you could be paying $5/click for the #1 spot when your competitor has to pay $7 per click just to have #3 position... just because the quality score for the keyword in your ad group that Google is matching the search phrase with is much higher than the quality score for the keyword phrase and ad group to which Google is matching that search phrase for your competitors.

How relevant your ad is to the keyword phrases in the ad group affects the quality score of those keyword phrases. In other words, does that keyword in the ad group appear in the title of the ad? the text of the ad? the display URL of the ad. Having ads that are very relevant to the search phrase can also drastically increase (double, triple, quadruple, or more) the CTR for a particular keyword phrase in an ad group.

How relevant your landing page is to the keyword phrase in the ad group affects the quality score of those keyword phrases. Does that keyword phrases from the ad group appear in the <title> of the landing page? in the <h1> of the landing page? in the <h2>s of the landing page? In the content of the landing page? etc.

Optimizing your ad groups themselves can increase the quality score of your keyword phrases and reduce CPCs. For example, say I have a loan related site and my ad group has an ad like:

Get a mortgage today
Call today to get a free quote.
We offer mortgages in 50 states.
Assume also that my ad group for the above ad has the following base keyword phrases in it (forget about for now whether exact, phrase, or broad match):

home loan
home loan refinance
fha loan
fha mortgage
fha refinance
fha home loan
va loan
va mortgage
va refinance
va home loan

I can almost guarantee that the phrases "mortgage", "fha mortgage", and "va mortgage" will have a higher quality score and likely a better CTR than the others because the word "mortgage" appears both in the ad title and the keyword phrases. Its more relevant to those search phrases. And because of that people are generally more likely to click on it for those search phrases since Google will BOLD the occurences of those keywords in the ad to draw attention to it.

You could improve the quality scores of the other phrases by putting them in separate ad groups. Perhaps you would group the refinance related terms as follows:

Best Refinance Rates
Refinance your home today!
Get a free refinance quote.
with the following keywords in the ad group:

home loan refinance
fha refinance
va refinance

You could further break the above refnance ad group down into a "home loan refinance" ad group, a "fha refinance" ad group, and "va refinance" ad group and have even more specific ads like:

Home Loan Refinance
Refinance Your Home Loan & Save!
Get a Home Refinance Quote Free.
with keywords like:

home refinance
home loan refinance
refinance home
refinance home loan

The more granular you get, the more relevant your ads and landing pages can be, the higher your CTR will generally be, the higher your quality scores will be, and the lower your CPCs will be.

But how granular you get depends on how much time/effort you want to spend managing the ads. The more ad groups you create, the harder it is typically to manage because you will likely want to always be A/B test ads for each of your ad groups as well as A/B testing landing pages for each. So you have to weigh the benefits of the lower CPCs from having higher quality scores with the additional efforts required to manage them.

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Last edited by Social-Media; 23rd August 2010 at 11:30 AM.
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