Why Have Click Costs Gone Crazy?
There is no denying the importance of having a solid online presence as a business owner in today’s world. Your enterprise needs to appear in online search results to get more website traffic and boost its chances of gaining new customers or more online conversions.
For this reason, many companies allocate a budget for pay-per-click (PPC) advertising, with data indicating that about 45% of small businesses spend marketing budget on PPC.
However, Google Ads and other PPC advertising solutions have become more expensive in recent times. This means, many marketers have been forced to pump more money into their online advertising efforts, as minor optimisations to PPC ads aren’t enough to circumvent these rising costs. Below are some insights into why PPC click costs are higher and what you can do about it.
COVID-19’s Impact On PPC Click Costs
The pandemic has undoubtedly impacted many aspects of business, including paid search. As such, COVID-19 is partly responsible for the skyrocketing PPC click costs many marketers incur nowadays. Google Ads or PPC is fundamentally an auction since countless individuals and enterprises want to appear in the top spots on Google’s search results. Therefore, there is incredible competition even for companies in non-competitive niches. As such, businesses must outbid other users who want to appear in search results under the same keyword to have their ads rank higher.
It is common knowledge that the more parties enter into an auction, the higher the bids get. Consequently, COVID-19 has increased the number of bidders in the auction space because it has altered the world’s modus operandi since 2020. As a result of global lockdowns, many people’s professional and personal lives moved online. Additionally, shopping moved primarily online, as individuals were forced to depend on ecommerce websites for various goods due to physical stores being shut down. Data indicates that 87% of people in the UK shopped online in 2020, compared to 78% in 2018
Many businesses moved online to adjust to this shift in consumer behaviour. In addition, marketers diverted a chunk of their funds from traditional to digital channels to adapt to this change. Therefore, digital is now the highest-return and lowest-risk advertising channel. An increase in the number of online advertisers coupled with the limited supply of advertising space has led to a price increase, a typical manifestation of supply and demand. Indeed, a Gartner survey revealed that 74% of CMOs expect to spend more on online advertising, while 66% anticipate a rise in PPC click costs. As such, larger companies with more money to spend are paying more for top-ranking keywords in particular industries, raising the overall advertising prices. As a result, many small businesses with limited budgets are unable to compete.
Will PPC Click Costs Remain High Forever?
The rise in PPC Click costs will likely continue for some time, so many marketers are preparing to spend more money. An estimated 33% of marketers expect COVID-19’s impact to last beyond 2021 and are ready to adjust their marketing strategies and budgets accordingly.
However, PPC click costs will ultimately reduce a little eventually, as many companies’ advertising budgets will fail to bring in the desired results. Numerous competitors are still vying for the exact keywords, and PPC click costs continue rising. This reality will lead to multiple businesses adjusting their annual marketing budgets to increase their bidding limits. However, the competition for the exact keywords at the same time will remain. Therefore, increased paid search budgets will be ineffective for many companies since competitors will always be willing to outbid them. Over time, many businesses will likely cease spending more on paid search and concentrate on less expensive but equally effective ways to be visible.
How Can Small Businesses Survive High PPC Click Costs?
Small businesses with limited budgets can’t compete with larger companies willing to incur high PPC click costs to rank higher for key phrases. Nevertheless, your small business can leverage long-tailed key phrases as an effective way to remain competitive in online searches. Long-tailed key phrases account for 70% of all web searches and are easier to rank for than short-tail keywords due to less competition.
Also, these key phrases have better conversion rates because people using them are more likely to purchase immediately. Finally, long-tailed key phrases contain short-tail keywords and can help you rank for them also, so you will be killing two birds with one stone by using these key phrases.
The perfect scenario is to allocate PPC budget to those phrases with robust search volumes but less competition. Whilst at the same time working on SEO for those phrases on your website to create strong landing pages for PPC as well as achieving organic results too. The two areas working together will give businesses a much stronger performing website.
Why Choose TU Marketing For Your Paid Advertising Needs?
We are committed to getting the very best results for our patrons and achieving a great ROI. As such, we advise our clients on the best-paid advertising areas to spend their hard-earned money on based on their unique needs. This way, our patrons make the most of their advertising budget and enjoy practical results that drive their businesses forward.
Reach out to us today to get started.
