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What affects CPC, and why can PPC get expensive?

Short answer

CPC depends on how many advertisers want the same searches, how much they bid and how relevant your ad and landing page are. Google's Ad Rank weighs bid, ad quality, landing page experience, ad assets and the searcher's context. Competitive trades like law and home services cost more because a single customer is worth so much.

In this answer
  1. 01What drives the price of a click
  2. 02Why quality lowers cost
  3. 03Why some trades cost so much
  4. 04How to keep CPC in check

What drives the price of a click

FactorEffect on CPC
CompetitionMore bidders on the same search push prices up
Customer valueTrades with valuable customers draw higher bids
Ad qualityRelevant ads with strong expected CTR pay less
Landing pageA useful, matching page lowers costs
ContextLocation, time, device and the exact search shift prices
Ad assetsCalls, sitelinks and other assets can improve Ad Rank

Why quality lowers cost

Google sets your position with Ad Rank, which combines your bid with ad quality and other factors. You pay what you need to beat the advertiser below you. Higher quality means you need a lower bid for the same position. Quality Score, rated from 1 to 10, gives a rough view of expected CTR, ad relevance and landing page experience.

Why some trades cost so much

A personal injury case or a full roof replacement can be worth thousands. Many firms bid on the same handful of searches, so prices climb. The same logic applies in your own market. Dense cities with many competitors cost more than small towns.

How to keep CPC in check

  • Group keywords tightly and write ads for each group.
  • Send each ad to a page that matches it.
  • Use exact and phrase match on costly terms.
  • Bid down in hours and areas that rarely convert.
  • Add negative keywords for searches that never fit.

Good example. A law firm writes separate ads and pages for car, truck and motorcycle accidents. Quality Scores rise, and costs per click fall.

Bad example. The same firm sends all accident keywords to one general page with one ad and pays top prices for every click.

Read what Quality Score is. Our PPC management lowers costs through relevance before raising bids.

Keep reading

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