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04.05.20

How CPC and CPL Relate in B2B

Lucia Rodas-Estrada, Search Director

CPC in B2B is Not Cheap

It is common knowledge that cost per click (CPC) can be pretty high in B2B tech. I have seen CPCs range in price from $10 to $250 per click for exact non-brand keywords. Is $250 per click worth the price?  I would say it depends. However, for the client who paid that CPC, the answer is yes! For the tech company that made the $250 investment, being present for that specific keyword was extremely valuable; not only because competitors were bidding on the same keyword, but also because they were seeing leads and pipelines generated by the keyword. Fortunately, CPCs were only above $200 per click one week, and then the cost went back to normal the week after.

 

How to Evaluate CPC for Lead Gen Campaigns

Many clients get concerned when CPC goes up and immediately ask us to pull back and decrease max CPC. Nonetheless, I recommend looking at all metrics and campaign performance before decreasing your max CPC. In my experience, clients worry about higher CPCs when they are seeing a higher cost per lead (CPL).

The question is, would you achieve a lower CPL by decreasing your CPC?

In the example below, you’ll see how lead volume can decrease when decreasing CPC. Even though we decreased CPC month-over-month, our CPL went up. With lower CPC, our ads were not eligible to be shown in all auctions and we got fewer impressions. Therefore, we got fewer clicks and leads. In case you are curious, this competitor campaign was never limited by budget and there were no major changes from Month B to Month C.

 

Finding the ideal CPC in B2B

You have probably heard that paid search is an art and a science, and I think that is true.

To find the ideal CPC, you need to understand how metrics in SEM work, what they mean, and how they affect each other. At the same time, you need to leverage your experience, look at the big picture, and predict if a lower CPC will help to achieve the campaign goal.

The SEM fundamentals are always the same, but every account performs differently. The only way to know how much you can decrease your CPC is by testing different CPCs and adjust them accordingly until you get the desired results.

In the example above, we increased CPCs for the best performing keywords in the campaign, and CPC went back to $15 per click. We know our ideal CPC for that campaign is between $14-$16 per click. Our lead volume is going up again, but not at the pace it did in previous months. This month, the landscape has changed due to COVID-19 and we are taking that into account for optimizations.

If you have a lead generation campaign, don’t get concerned the moment you see a higher CPC. Instead, look at the campaign’s overall performance, its conversion volume, and CPL. Are you getting more conversions with a slightly higher CPC? Is your CPL in line with your goals? If so, leave your max CPC alone and find other ways to improve performance.

Also, when evaluating CPC, see if there have been any changes in quality score, impression volume, and competition that may have affected it. If you want to improve your CPC in the long term, focus on improving your quality score and your CPC will automatically decrease. Improving ad relevancy goes a long way.