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This Just In: SEM CPCs Keep Going Up

What is a click really? Think about trying to explain the concept of a click to your great-grandparents? If anyone has a good definition for a click, make sure to let me know.

Anyway, this past June, AdGooRoo released this report of the cost of Google CPCs over the past few years:

Rise in Average Google SEM CPCs 2012-2014

On the whole, U.S. AdWords text ads have increased an average 26% in the past two years!

A little silver lining is that franchising, which is closest to the financial category looks like it’s under-indexed in terms of price increases. Can you imagine being a law firm experiencing twice as expensive online marketing in a two-year span?

As a point of comparison, here’s the same chart for one year of data on the Yahoo! / Bing network:

Rise in Average Bing SEM CPCs 2013-2014

While the average cost went up 21% in the past year, it started at a much lower base, leading to this comparison of the two networks:

Comparison of Google and Bing CPCs in 2014

So, on average advertisers are paying 45% more on AdWords relative to Bing. That’s not too surprising, and is a big part of what we called the Google AdWords Question: Do I Have To?

Based on our experience, the CPCs you see here listed for “financial” are a little high relative to what we see in the franchising vertical, so it’s not a perfect proxy.

What’s important to keep in mind as a lead generator is that CPCs are very likely to inflate over time. As more and more companies and larger and larger slices of marketing budgets get dedicated to digital channels, SEM is only going to get more and more expensive.

Of course, there are a few things you can do to combat this. Namely:

  • Get more efficient with your spend, only bidding on search terms that work well for you
  • Bid on longer and longer tail keywords, eliminating competition
  • Raising the franchise fees you collect, allowing for the offset in marketing increases

If you want to talk about any of these strategies, drop us a note!

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