Cost Per Click – how low can it go?

August 5, 2020

CPC (Cost Per Click) presents marketers with the classic ‘More for less’ conundrum in a very modern way. Every time a potential customer clicks on your digital ad, the platform (Facebook, Insta, Google etc) charges you. 

However, that click could potentially lead the clicker into a sale. If your ads are generating a lot of sales, it’s more than worth paying the click-fee.

On the other hand, if they’re clicking but not following through with a purchase, you’re losing money.

This click-expenditure vs conversion gains issue is measured via the Cost Per Click metric. If what you’re paying for clicks is outweighed by the value of the conversions they’re bringing in, your CPC is low. If, however, you’re spending a lot on clicks but seeing very little return in conversions, your CPC will be high.

A low CPC rate isn’t just good for your bottom line. It’s also a great indicator of how well your creative content is performing with your audiences. 

So, how can you bring that CPC rating down?

1.Target intensively

This is marketing 101, but it bears repeating: the better your targeting, the better your content will perform. After all, the people who genuinely want or need your product are far more likely to follow their clicks with conversions.

Of course, it’s not enough just to throw content at a particular audience. You do also have to convince that audience that your product is what they’re looking for. This is where engagement techniques based around personalisation come in.

Check out this example from Moon Pie. They’re using niche Millennial-style humour via Twitter in order to raise a smile (and hopefully some sales) from their Millennial target audience.

Compare with this example from Fidelity 401K – which also uses humour, but this time to target older demographics (the punchline is that many things grow as you get older, including your Fidelity 401K plan)

Both examples are marketing through humour but, being aimed at differing audiences, the effect is very different.

If you’re good at segmentation, you can easily format social media campaigns to play in front of different audiences. But it does help if the content you send out is hyper-optimised for each audience in the first place.

2. Retarget

‘Retargeting’ means targeting audiences who have already used and (hopefully) liked your products. They’re already ‘warm’, so in theory it should be easier to persuade them to purchase again. It’s also a great way to keep your brand in the minds of existing customers and to build customer loyalty.

In this example, BestBuy are retargeting customers who have already bought from them by offering items which will complement that purchase (in this case, a case for a recently bought smartphone).

As always, of course, retargeting campaigns are only as good as the content and data you feed them. However, if your retargeting content is on point, retargeted customers are 70% more likely to convert than brand new leads. 

If CPC is a real concern for you, retargeting is a great way to quickly start getting that CPC figure down.

If you’re not aiming for mobile app purchases or downloads, advertising on desktop feeds gives lower CPC and higher CTR than mobile advertising. 

Obviously, this is not ideal. Mobile is quickly overtaking desktop in the social media world – more people scroll Facebook on their phone than on desktop, and Instagram is almost solely configured for mobile feeds. By advertising on desktop only you’ll lose a lot of impressions. 

So, given these limitations, why concentrate on desktops? 

Well, desktop displays seem to be more engaging for audiences. The images are larger, the placement is better, they’re easier to navigate…Whatever the reason, CTRs are higher and CPC is lower for desktop ads than mobile ads. If lowering your CPC is a major goal, it’s worth letting mobile advertising slide until you’ve hit your goals.

3.Watch your relevance score and CTR

Facebook provides marketers with a ‘relevance score’, which pretty much does on the tin: tells you how relevant your ads are for your target audience.

The relevance score is a ‘black box metric’, meaning we don’t know precisely how the algorithm calculates it…but the calculation is almost certainly related to your CTR. 

The higher your CTR, the higher your relevance score. And here’s the bottom line: the higher your relevance score, the lower your CPC

Ads with a high relevance score win both reduced per-click costs from Facebook, and are given priority placement in the relevant newsfeeds.

Facebook wants its users to stick with the platform. Users being annoyed by irrelevant ads is bad for their UX, so they’re always looking for ways to put the right ads in front of the right faces. Prioritizing and giving discounts to more relevant ads is one of the ways that they achieve this.

Platforms which don’t give you an outright relevance score are still operating on much the same principle. Getting your CTR up is a good way to please the platforms and win CPC-boosts.

4.Optimise your landing page

Conversions are what make it worth paying for clicks. The higher your conversion rate, the higher your ROI and (therefore) the lower your CPC. 

The landing page to which an ad leads should fulfil the promise of the ad. It should build on the feeling you inspired with the initial advertising content. It should also provide customers with a clear path to conversion, with obvious CTAs and a friction-free UX.

A good landing page can turn hesitant customers into loyal brand ambassadors, but a bad landing page can be a huge turn-off. If your CPC is enormous, check your click-through-rate (CTR). A high CTR but a low conversion rate could indicate issues with your landing page.

5.Get it right the first time

You’ll have noticed a recurring theme in all of the above tips: the better (and more relevant) your content, the lower your CPC.

On the face of it, this is pretty obvious. If people find your content engaging, they’re much more likely to click through and convert.

Getting the right, engaging, and appealing content in front of the right people is a surefire way to make every ad high-converting. And the higher your conversion rate, the lower your CPC.

If your conversion rate is high, you won’t have to do things like only advertise on desktop, because CPC naturally falls as your conversion rate and ROI rise. What’s more, your high-performing ads will gather momentum on an ongoing basis as their relevance scores rise and the algorithms give your content higher priority.

However, getting your content to appeal to your target audience can be a bit hit and miss. Coming up with the right creative strategy and content in the first place involves a lot of research and development – and even then it’s not a sure thing. 

Most brands are cautious enough to test out their content before launching their main campaign. Currently, the industry standard for testing is A/B (or ‘split’ testing) on live audiences – but this can be fraught with problems.

Here at Datasine, we offer an alternative to A/B testing which not only gives deeper, stronger insights – but does so without the need to run adverts past live audiences. 

Our intelligent AI turns your creative ad content down into ‘creative data’ by breaking your images and text into hundreds of ‘atoms’ – elements like colour, background, syntax, graphic styles, mood, tone, subject, figures etc – and analyses these against past creative ad performance. 

This process results in clear and actionable insights about the kind of creative elements which will go down well with your target audiences. And, because we use data from your own past campaigns, you never have to worry about live testing. You can then incorporate these insights into your new creative content. The result being flawlessly optimised ad content which is guaranteed to have great CPC from the second it hits your channels.

It’s a quick, easy, low ROI process which will quickly boost your CPC. Sounds too good to be true? Request a quick demo, and let us explain how we do what we do!