In a perfect world, we’d never have to worry about the cost of our pay-per-click advertising campaigns. We’d be making money on every sale, and we’d have an unlimited budget.

Unfortunately, it’s not a perfect world. There are times when we have to lower PPC costs to stay within our budget.

In this post, I’ll address five quick ways to lower PPC costs and help your business profit from PPC advertising.
Before I address those five tips, however, there are two rules that all PPC advertisers should follow, whether they’re trying to reduce costs or not.

Rule 1: Set Budgets
All PPC search engines allow advertisers to set budget caps on their campaigns. Sometimes, it’s appropriate to set the budget caps very high, or even do away with the cap altogether. But if you’re looking to lower your PPC cost, it’s crucial to set daily budgets that you’re comfortable with. This will undoubtedly reduce your traffic from PPC. If your campaign isn’t as profitable as you’d like, that’s acceptable. Set a budget you can live with, and focus on getting as many conversions as you can for that budget.

Rule 2: Track Everything
One of the best reasons to use PPC is that you can track your results in near real-time. Take advantage of that by using, at a minimum, the free tracking offered by the search engines — see explanations for Google andMicrosoft. It’s quick and easy to install the tracking codes on your site, and you’ll be rewarded with useful information.

If you’re not tracking sales, leads, or conversions, you might hurt your results while trying to lower costs by pausing the wrong ad groups or keywords. Don’t fall into that trap. Track everything so you know what’s working and what isn’t.

Now that you’re following these rules, here are five quick ways to immediately lower your PPC costs.

1. Take Away the Bad Performers
When you need to lower costs, you probably should make a few changes immediately. It’s important to prioritize. Find the campaign with the highest cost, and look at the ad groups in this campaign. Are there any ad groups with a high spend and no conversions? If so, pause them. I’ll discuss how to fix them later in this article. Your goal right now is to cut costs as quickly as you can.

From there, work your way down. Have you reviewed your ad copy tests? I addressed those tests here previously, at “PPC Basics: Part 5. Ad Copy Development and Testing.” Is there one ad variation that’s pulling down performance? End that test and keep the ad that’s doing well.

Do the same thing with keywords. Are there keywords that are costing a lot and not converting? Pause those too.

Once you’ve stopped the bleeding by pausing poor performers, add some controls to your account that will help improve results.

2. Use Negative Keywords
Negative keywords — see “PPC Basics: Part 4. Keyword Match Types” — are keywords for which you do not want your ads to appear. For example, for ecommerce merchants or online service providers, the word “free” is a good negative keyword, since you don’t want your ads to display to people looking for free items.

If you’re over-spending on PPC, a good way to get things under control is to add negative keywords. Even with careful keyword research — see “PPC Basics: Part 2. Keyword Research” — it’s common to discover that you’re getting significant traffic for irrelevant search queries.

To quickly find negative keywords to add, run a search query report — see Google’s explanation. Find all the terms that don’t apply to your business and add them as negatives. This will keep you from spending precious funds on irrelevant clicks.

3. Identify Long-Tail Keywords
Long-tail keywords are keyword phrases of at least 4 to 5 words that specifically describe your product or service. The more words in a search phrase, the more specific it likely is – meaning it can be highly relevant to your business.

Shorter, broader terms are helpful for generating awareness and high traffic volume. But they’re not helpful when you’re trying to conserve cash. Instead, focus on longer, more specific terms. You’ll get fewer visits, but the visits you get will be far more qualified.

To find long-tail terms, you can use a keyword research tool or the search query report mentioned earlier. To use the search query report, find longer phrases that are relevant to your business and add them as keywords.

4. Restrict Match Types
Keyword match types — see “PPC Basics: Part 4. Keyword Match Types” — offer a great deal of control for advertisers. To cast a wide net and generate high traffic volume, it’s best to use “broad match” or “modified broad match.”

But if you’re trying to control costs, it’s better to stick to “phrase match” and “exact match.” Take a look at your keyword list, and change any broad or modified broad terms to phrase or exact.

5. Focus on Brand Terms
If you’re desperate to reduce costs quickly and dramatically, a good way to do it is to pause all non-branded keywords and focus solely on brand terms. This is a drastic measure, so use it only if needed. But if you need to make a sweeping change quickly, this will definitely help.

Summary
The best way to lower pay-per-click advertising costs is through systematic testing and optimization. But if you need to make changes quickly, try some of these tactics to lower PPC costs and increase your return on investment.

This entry was posted on Thursday, July 19th, 2012 at 2:10 pm and is filed under Digital, Marketing 101, SEM. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.