Are High CPCs Killing Your Google Ads ROI?

By: Jyll Saskin Gales, Google Ads Coach

Have you ever looked at your Google Ads costs and thought, "Yikes, these CPCs are eating up my budget!"? You're not alone. Many advertisers worry about the rising cost of clicks; your groceries aren't the only thing experiencing bad inflation! But what if I told you there's a way to embrace those higher CPCs and actually improve your return on investment?

In this post, we're diving deep into the world of Smart Bidding in Google Ads and exploring why higher CPCs aren't always the enemy. We'll cover:

• The Truth About Smart Bidding and CPCs: Understanding the trade-off between cost and value.
• Why Manual Bidding Might Be Holding You Back: Discover how focusing on cheap clicks can limit your success.
• The Power of the Full Picture: See why giving Google's AI room to breathe is essential for optimal results.

Smart Bidding: It's About Value, Not Just Cost

Here's the deal: Smart Bidding strategies in Google Ads often result in higher CPCs than manual bidding. But this is by design! When you use manual bidding, you're essentially telling Google, "Find me the cheapest clicks possible." While this might sound appealing, it often means missing out on the clicks most likely to convert into customers.

Think of it like this: you could buy a cheap pair of shoes that fall apart after a few weeks, or you could invest in a slightly more expensive pair that lasts for years. Smart Bidding focuses on the predicted value of a click, not just the upfront cost.

Why Cheap Clicks Can Be Costly

Manual bidding can be tempting, especially for beginners. It gives you a sense of control, but that control can come at a price. By fixating on low CPCs, you might miss out on valuable clicks from users who are:

• Further down the sales funnel: These users are closer to making a purchase and there are more advertisers who want to capture them, which drives up costs.
• Highly engaged with your ads: They've shown strong interest in your offerings and are more likely to convert, even if the click costs a bit more.
• Searching for high-intent keywords: These keywords might have higher CPCs, but they also indicate a stronger purchase intent.

Give the AI Room to Breathe (and Learn)

One common workaround is to use a portfolio Smart Bidding strategy with a maximum CPC cap. While this approach is better than sticking solely with manual bidding, it still limits the AI's ability to optimize your campaigns fully.

Imagine trying to paint a masterpiece while only being allowed to use a few colors. You might create something decent, but you'll never achieve the full potential of your artwork. Similarly, by capping your bids, you're restricting the AI's ability to "see" the whole picture and make the best decisions for your campaigns.

To truly benefit from Smart Bidding, you need to trust the process. Give the AI enough time and budget to learn, analyze, and optimize your campaigns. This means:

• Setting realistic goals: Don't expect miracles overnight. Give the AI time to gather data and adjust its bidding strategies.
• Providing sufficient budget: A limited budget can hinder the AI's ability to explore different bidding options and find the sweet spot for your campaigns.
• Monitoring and adjusting: Keep a close eye on your campaigns and make adjustments as needed. While you should trust the AI, you still need to be an active participant in the process.

By embracing Smart Bidding and letting go of the need to control every single CPC, you can realize the true potential of your Google Ads campaigns and achieve a higher return on investment.