AdWords CPC Rising With Enhanced Campaigns. Or Are They?

As an agency that manages Google AdWords accounts day in and day out, we have a front-row seat to the upheaval of the Google AdWords platform known as “Enhanced Campaigns.” Enhanced Campaigns are a new campaign type that Google says advertisers can use to target the right ads to the right customers at the right times, on the right devices.

It sounds like a gift from above for advertisers, right?

But even Google’s new tools can be misinterpreted or (more likely) implemented poorly, leading many to believe they are just designed to extract more money from advertisers. Many in our industry instantly went into a defensive position and claimed that Google is just out to screw everybody over in the name of profits, but lately more reasonable opinions have prevailed. In fact, we have even published a case study showing the EC changes can be positive for clients & agencies that are willing to take the time to learn and use all the new features.

Adobe vs. Google

Adobe is the latest to publish statistics that seem to indicate a rise in AdWords CPCs since the introduction of Enhanced Campaigns this spring. However, after Forbes.com and others picked up the story, Google has issued statements claiming, “There have been many speculative reports, but it’s far too early for any of them to be reliable. Advertisers will choose their bids and adjust their spend based on the value they see in their campaigns.”

Who to Believe?

As an agency, we are siding with Google (and PPC software providers Marin and iProspect) that all claim that it is too early to know the full impact and whether or not CPCs are actually rising as a direct result of Enhanced Campaigns. The mandatory upgrade deadline is July 22nd, after which ALL AdWords advertisers will be automatically upgraded. At that point, we’ll have the complete picture, but I think it’s far too soon to know.

Higher CPCs, So What?

This is the intractable problem with PPC. Even if CPCs do rise (and they will, eventually),  savvy advertisers have to prepare for a future with higher traffic acquisition costs. There are a few ways to soften the blow and maintain or improve the profitability of a campaign:

  1. Improve conversion rates on a site to lower the total Cost Per Acquisition
  2. Manually lower CPC bids and/or use some sort of automated bidding rules to keep CPCs in check
  3. Re-allocate some AdWords ad spend to other ad platforms with lower CPCs
  4. Diversify the keyword set to include more “long tail” keywords that tend to be cheaper

The list goes on, but my point is that nobody is forcing advertisers to pay higher CPCs.

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