Why Brands Need to Consider Cost

When you’re looking at your Google Ad results (or your Facebook Ad results, for that matter), you’re going see a dashboard filled with different metrics like this:

You’ll see a number of clicks, impressions, conversions, and cost.

And while it’s easy to look at the lowest cost and want to throw more ad spend into that particular campaign, it’s never quite that simple.

Sometimes you can get an enormous amount of clicks at a low cost, which can be a sign of a successful campaign. Sometimes these campaigns will even yield plenty of conversions.

But in many cases, cost alone isn’t telling the full story, and it’s imperative to know how to balance and prioritize the cost and quality.

Why You May Need to Choose Between Cost & Quality

It’s common for many brands and even agencies to prioritize low costs when it comes to PPC ads. The appeal of a $1 click compared to a $3 click is hard to ignore.

Cost can sometimes be correlational with quality, however; in at least a solid number of cases, you can get what you pay for.

This is because not all clicks are equal. If you get a lot of clicks on a low-intent keyword or on keywords that are used by people who aren’t a segment of your target audience, you’re likely to get clicks but few conversions. It’s also possible that lower-quality clicks might convert, but only once, or that they’ll convert for a lower average order value than other higher-cost clicks.

There are multiple reasons why a low-cost click could also be a low-quality one. Let’s take a look at a few.

EXAMPLE 1: LOW INTENT OR LOW-VALUE KEYWORDS

Let’s look at an example. Dog trainers are paying as much as $4.11 per click for keywords like “dog training” and $4.95 for “dog training near me.” These are high-intent keywords that indicate they’re looking for a service.

At the bottom, you have “crate training,” which is only $1.45 per click. This is Sri Lanka Phone Number because if someone searches for “crate training” they’re almost certainly looking for quick tips; this is not something you need to take classes for or to work with a professional with. Users might click on your ad but would be extremely unlikely to buy anything, especially since there’s an abundance of free resources online.

EXAMPLE 2: POORLY ALIGNED SEARCH INTENT

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You might be able to place for a keyword, but that doesn’t mean your ad or product is actually answering the user’s search intent properly.

If someone types in the keyword “antique engagement ring,” based on my experience as a jewerly salesperson in a past life, I know that they’re looking for rings you can purchase in antique or pawn stores. They’ve already been worn and were created long enough ago to be considered antiques.

The search results for these terms, however, are for vintage-styled rings. These ads might get clicks, but for the audience who wants a 200-year-old ring for $200 instead of a custom one for $5,000, they’ll get no conversions. This can end up as wasted ad spend at a high volume even at a low cost.

EXAMPLE 3: LOW-VALUE AUDIENCES

Certain long-term keywords may indicate not only intent but audience value. Someone searching for “affordable diamond rings” or “diamond rings sale” is almost definitely not going to be willing to spend as much as someone searching for “certified diamond ring” or “custom diamond ring.”

Keep in mind that you don’t just need to consider the initial conversion. You also want to track customer LTV to determine the following:

  • How long are different audiences retaining?
  • How often are they purchasing?
  • How much are they spending when they purchase?

Some customers will purchase only once to take advantage of initial freebies or welcome discounts, and never purchase again. Make sure you’re factoring that into the equation and looking at long-term conversions. You can learn more about customer LTV here.

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