Google Cost Skyrocketing

[PPC]

Maybe its just me, but my spend in Google has gone through the roof the past couple of weeks (especially this week) with no increase in sales at all. I am still not sure if this is related to the new algorithm, the fact that I raised my account budget limit or possible new partners in the Google network. Is anyone else experiencing something similar this week?

I don't think it should have anything to do with our budget since we were not hitting our old budget anyway and were displaying 100% of the time for all campaigns. But who knows if now we are receiving more partner traffic from the Google network now that are monthly credit/buget limit has been raised. seems unlikely, though it wouldn't shock me.

It could have something to do with the new algorithm as I have noticed that minimum bids are rising across the board. What really aggravates me is that we can have a term with good CTR and a landing page that is clearly more relelvant to a term than our competitors yet our bid minimum has gone up to 3X our previous cost. So now when I set our bids to the minimum, we are displayed in first or second position out of 8 advetisers... but if I don't set it at at least the minimum bid, we don't display at all. This seems ridiculous to me, but I'm sure these kinds tactics help keep Google stock sky high. Bid to position does not seem to help us much here either.

Possibly it could be new partners in their network. Our old analytics program could not meet our site transition a few months ago so I don't have reliable stats for right now. Therefore, its tough for me to tell where this excess traffic is coming from. It looks like we are getting 5-10% of traffic from places like India, China, Spain, Germany, malaysia, etc. when our ads should only be showing in the US and Canada and in some campaigns UK and Australia.

Anyway, is anyone else seeing much higher costs through Google recently? If so, any idea what is causing it?

[Mel66]

I'm not seeing this, PPC - our account costs have been pretty stable.

We are having problems with non-US clicks on our US-only campaigns, as I posted in the O Can A Da thread. But not enough to throw everything off.

The only thing I can think of is the new QS algo, as you mention. I'm curious what others have to say.

Melissa

[wasatch27]

It could have something to do with the new algorithm as I have noticed that minimum bids are rising across the board.

It could be related to increased competition in your space. Have you seen lots of new competitors jump in lately?

I've seen average CPC's drop slightly in the past 30 days.

[PPC]

Yeah, its tough to say what is going on. It looks like to me that we are getting more impressions, bid prices are slightly higher and conversion rate is down slightly. Combine all three factors and we are seeing increased spend with no corresponding increase in sales. Sales during February school vacation week were slow the past two years as well; maybe that has something to do with it. If I am still seeing the same thing next week, then I'll have to drop bids.

[abbottsys]

..Anyway, is anyone else seeing much higher costs through Google recently? If so, any idea what is causing it?
No, I'm not seeing this. But I'll be monitoring our account very closely over the next couple of days as the new QS algo becomes fully operational and "settles in." I'm not seeing higher bids, but I think I'm starting to see lower ranking on *single word* keywords. I'll report here as I get more concete results this weekend.

[ExposureTim]

Two things occurred this week that may be causing this...

1) Google's quality score algo for ads was updated. This may be causing your quality ads to appear more often than competitors that you'd previously ranked lower than.

2) The content network has added a HUGE partner in MySpace. My company experienced some severe spikes in impressions and clicks while a return of next to nothing in terms of conversions. If your campaigns have the contextual networks enabled this could be the cause (check your log files).

[flyingrose]

MySpace is also displaying Google SEARCH ads as are a growing number of parked domains full of nothing but advertising. Traffic from these sources is unlikely to convert and can cause huge increases in spending.

I've also seen huge spikes in spending due to Google's ever expanding expanded match hitting formerly stable broad matched keywords. I suspect they also equate a formerly high-performing keyword phrase with a very generic phrase causing a huge jump in impressions, clicks, CPC, and overall spend. Look for keywords with sudden dramatic increases.

And finally if you've paused anything lately Google is most likely showing the most expensive broad matched keyword phrases you've got in your account for the very keyword phrases you intentionally wanted to NOT display ads.

Advertisers whose accounts have the Account Snapshot feature can use the graphs to check every campaign for these spikes in spending, impressions, or better yet cost per conversion and then check those that are out of whack.

I've posted much more in-depth information on these issues in another forum but I don't know what the policy here is on mentioning other forums or linking to them.

[PPC]

MySpace is also displaying Google SEARCH ads as are a growing number of parked domains full of nothing but advertising. Traffic from these sources is unlikely to convert and can cause huge increases in spending.

Thanks! This could definitely be the problem. It does seem as though MySpace is displaying our ads and their audience is definitley a demographic that we are not targeting. Too bad you can't set up Google network only campaigns to test vs. Google search traffic.

[Beatever]

It could have something to do with the new algorithm as I have noticed that minimum bids are rising across the board. What really aggravates me is that we can have a term with good CTR and a landing page that is clearly more relelvant to a term than our competitors yet our bid minimum has gone up to 3X our previous cost. So now when I set our bids to the minimum, we are displayed in first or second position out of 8 advetisers... but if I don't set it at at least the minimum bid, we don't display at all. This seems ridiculous to me, but I'm sure these kinds tactics help keep Google stock sky high. Bid to position does not seem to help us much here either.

Hi,

Thanks to the recent update: half of my words on a certain account have doubled in price (this has happened this weekend). They accounted for 14% of all clicks, roughly 13% of the views, so they weren't that bad in CTR in the past. Yet, Googles algorithm has decided that due to lack of relevancy, prices should be doubled. Would that be the reason that I'm upset?
Does anybody else experience this phenomenon?

[Discovery]

PPC, Wow! you mean you don't want to tap into the 3 trillion pimple faced teenagers, posting get rich quick scams on MySpace?

We got nailed with a few million impressions in a day with one campaign last month, ton of clicks too, the CPC was very low for us like 12 cents, but ultimately the CPL was too high and the quality of the conversion VERY poor.

So either MySpace has accounted for some of the spend, or perhaps you upped your cpc to those $10 mins and forgot to turn a couple back down to their normal price?

Discovery

[ExposureTim]

Discovery, same here.
Tens of millions of impressions per hour! Glad we caught it quickly.

[Robbed]

This is absolutely crazy! I have been in contact with Google all week after they charged my credit card for over $1500 for clicks accrued while all my campaigns were paused!

They have admitted its a technical fault and are offering to give adwords credits for the amount but are flat out refusing to refund the charges! This is horrible - I don't know what to do!
Edit/Delete Message

[Discovery]

I feel your pain "Robbed" Google is generally pretty good with refunds and charge backs. Try to work with your account rep.

We had the same issue happen a couple times in this last month. Turned off the campaigns and they were still running and charging for 4 days straight.

Even more puzzling was, one campaign that had been off for MONTHS, then we decided to spruce it up and run it again. The second we turned the campaign on the page refreshed and we had hundreds of impressions and a handful of clicks.

MySpace presents a much larger problem due to the volume of traffic they get, and in my view traffic that has little intention to pay for anything.

Discovery

[AussieWebmaster]

I have noticed a lot of inactivated terms in cases where we are working to lower terms... high ctr but not enough cpc... they inactivate... the quality score should be perfect... they are looking in to it.

[Beatever]

I have noticed a lot of inactivated terms in cases where we are working to lower terms... high ctr but not enough cpc... they inactivate... the quality score should be perfect... they are looking in to it.

Hi Aussie webmaster,

Do you mean that Google knows that there is something wrong with the minimum score? And it's not about the bug that occurred around Feb 16 where CPC skyrocketed?

[AussieWebmaster]

Hi Aussie webmaster,

Do you mean that Google knows that there is something wrong with the minimum score? And it's not about the bug that occurred around Feb 16 where CPC skyrocketed?

There are a few bugs left in the new system.... though Google is not formally admitting that.... if you read around you will find there are things still going wrong or unexplained.

Terms can go inactive and then come back without anything being done....

Tight landing pages and solid ads with decent CTRs go inactive if a couple of advertisers leave the space... do they have an income level that the loss of advertisers impacts or are numbers reassessed on the average of those left???

[Beatever]

Tight landing pages and solid ads with decent CTRs go inactive if a couple of advertisers leave the space... do they have an income level that the loss of advertisers impacts or are numbers reassessed on the average of those left???

This could be a downward spiral: ads go inactive which means less advertisers which implies recalculating so ads go inactive which means less advertisers, ...

Time to sell my google stock? :)

[PPC]

Tight landing pages and solid ads with decent CTRs go inactive if a couple of advertisers leave the space...

Maybe those adveritsers didn't leave, but their ads also went inactive.

[Robbed]

I don't understand how Google can do this to a small business - I can't afford to take a $1500 hit like this. They have admitted that it was a technical flaw that caused the charges and yet they refuse to refund the charges to my cards!

How can they justify this?

[AussieWebmaster]

I don't understand how Google can do this to a small business - I can't afford to take a $1500 hit like this. They have admitted that it was a technical flaw that caused the charges and yet they refuse to refund the charges to my cards!

How can they justify this?

take the google credit to your account and make the money back ASAP... though they have been known to cut checks... reversing cards is tricky

[Robbed]

Unfortunately I am a beginner and I do not have enough skill to make the money back quickly :/ I have just started with an online mall - a shopping site using commission junctions web services. Any advice as to how to best to use these credits would sure help..

[AussieWebmaster]

Unfortunately I am a beginner and I do not have enough skill to make the money back quickly :/ I have just started with an online mall - a shopping site using commission junctions web services. Any advice as to how to best to use these credits would sure help..


first look at all the products and price the cost of clicks for each of them... spend money on the less competitive products and see what the conversion rates are... make sure your ads are tight and land them on the purchase page that has specs or general info with the ability to buy it now.

[flyingrose]

I concur that you should do some research and find the keyword phrases you can get for the lowest CPC. With what is currently going on I would recommend these tips:

1. New campaigns be limited to Google.com (opt out of both content and Google's search network). This will limit where your ads are displayed to the strongest converting traffic until you can verify that you are getting a decent conversion rate.

2. Keywords be entered as phrase and exact match ONLY (no broad match keyword phrases)

3. Put negative keywords in the new campaign immediately. Use any single word that shows up in any keyword research that doesn't apply to what you sell as a negative keyword. Then do a search in Google.com and scour the sites that show up for every other use of any word used in your phrases and add those as negative keywords too.

4. I saw a recommendation here that we can use negative embedded keyword phrases. I have not yet tested this. Years ago I saw doing this blocking keywords I wanted the ads to appear for so if you try this test your positive keyword phrases using the magnifying glass icon at the keyword level to see that it is working properly. To explain this concept, if you want your ads to display for all variations of your keywords except one add -[blue widgets]. Theoretically your ads will appear for blue fancy widgets, cheap blue widgets, blue widgets with black spots, etc. and only NOT appear for a search for just the words blue widgets.

5. Never use the suggested bids Google's system gives you. They're either ridiculously high or way too low. Start with something reasonable or a guess that is within what you can afford. There are two basic strategies:

A. Lowest cost: start bids low, get impressions and clicks, set the individual bids to get them barely onto the first page of results, then raise the default bid, get more keywords on the first page, set their bids, then raise again. PROS: Least risk. CONS: May affect CTR, will limit traffic.

B. Most aggressive: Set bids high, get impressions and clicks, and then drive individual bids lower to the position you want. PROS: More traffic, higher CTRs may lower CPC. CONS: Higher risk, higher spending.

The new magnifying glass icon feature can be used with either method to get your keyword bids set faster.

[AussieWebmaster]

I concur that you should do some research and find the keyword phrases you can get for the lowest CPC. With what is currently going on I would recommend these tips:

1. New campaigns be limited to Google.com (opt out of both content and Google's search network). This will limit where your ads are displayed to the strongest converting traffic until you can verify that you are getting a decent conversion rate.

2. Keywords be entered as phrase and exact match ONLY (no broad match keyword phrases)

3. Put negative keywords in the new campaign immediately. Use any single word that shows up in any keyword research that doesn't apply to what you sell as a negative keyword. Then do a search in Google.com and scour the sites that show up for every other use of any word used in your phrases and add those as negative keywords too.

4. I saw a recommendation here that we can use negative embedded keyword phrases. I have not yet tested this. Years ago I saw doing this blocking keywords I wanted the ads to appear for so if you try this test your positive keyword phrases using the magnifying glass icon at the keyword level to see that it is working properly. To explain this concept, if you want your ads to display for all variations of your keywords except one add -[blue widgets]. Theoretically your ads will appear for blue fancy widgets, cheap blue widgets, blue widgets with black spots, etc. and only NOT appear for a search for just the words blue widgets.

5. Never use the suggested bids Google's system gives you. They're either ridiculously high or way too low. Start with something reasonable or a guess that is within what you can afford. There are two basic strategies:

A. Lowest cost: start bids low, get impressions and clicks, set the individual bids to get them barely onto the first page of results, then raise the default bid, get more keywords on the first page, set their bids, then raise again. PROS: Least risk. CONS: May affect CTR, will limit traffic.

B. Most aggressive: Set bids high, get impressions and clicks, and then drive individual bids lower to the position you want. PROS: More traffic, higher CTRs may lower CPC. CONS: Higher risk, higher spending.

The new magnifying glass icon feature can be used with either method to get your keyword bids set faster.

very insightful....

[Robbed]

Thank you for the advice guys, I really appreciate it.

Unfortunately after they emailed me this morning to say that the technical issue had been resolved, I can see from my logs that it is still continuing. Campaigns that I paused this morning are racking up clicks this evening - this is ridiculous.

Thank you again for the tips, if it happens that I cant get my money back at least I will know how to spend the credits :)

[Fort Cake]

It could be related to increased competition in your space. Have you seen lots of new competitors jump in lately?
I have definitely seen a lot of new advertisers.

[ExposureTim]

Campaigns that I paused this morning are racking up clicks this evening - this is ridiculous

There should be no hesitation or delay in getting monies credited back to you that result from clicks AFTER you pause or delete a campaign. This happened to me recently and I didn't get the slightest fight from Google in crediting back that money.

(Note: We are still discussing the potential fraud that caused me to pause those adgroups in the first place.)

... but you should be credited 100% of what you spend during/after the pause.

[Mel66]

I think the issue is that Robbed is looking for a refund, not Adwords credits.

Or did you mean they credited your credit card?

Melissa

[ExposureTim]

I see that, but don't have any advice for him there.

Sorry to hear this Robbed. Even the big spenders, like my employer, fight over issues like this and don't get anywhere. We're still fighting, since it's clearly unfair and wrong (and evil?) but I don't have any recommendations other than re: the paused costs.

[AussieWebmaster]

Funny I have actually had the exact opposite happen... they would not give me credit... they had to send me a check... guess when it goes over a $100k they like having a paper trail.

[DaveN]

haha you big spend you :)

Dave

[ExposureTim]

Actually, maybe we'll get a check too. I'm not sure since a portion of the amount is still in discussion. I just know it's coming and that they didn't argue for a second.

[AussieWebmaster]

haha you big spend you :)

Dave

:p don't worry mate you will get there soon enough - have been noticing a few movements over in your camp!!!

By NYC I think we can have some meaningful evasive conversations!!

[Robbed]

And how much would be considered too much to pay per click, I mean is it possible to find good keywords with reasonable volume for under $1 per click or is that just unrealistic?

[Robbed]

btw, Here is what was contained in the latest email I received from them this morning. It is close as I could get without quoting it directly:


They Thank me for my email. They apologize for any confusion.
They understand that I would like a refund for the amount of charges accrued due to a
technical issue, instead of a credit. At this time, they are unable to
provide a refund of the charges accrued. They will still automatically
credit my account for the additional advertising activity which my
campaign accrued after the campaign was paused.


Does that seem fair?

[flyingrose]

And how much would be considered too much to pay per click, I mean is it possible to find good keywords with reasonable volume for under $1 per click or is that just unrealistic?

That varies enormously depending on what you're advertising and how many other advertisers are bidding on the same keyword phrases. It also depends on your creativity. Keyword phrases Google suggests are often the most competitive followed by those found in other research tools.

Targeted keyword phrases you create are usually low traffic, sometimes inexpensive, can have exceptionally strong CTRs and conversion rates, and a low cost per conversion. Some will be just as expensive because they're competing with other advertisers' broad matched keywords while others may have little competition at least for a while. Eventually they are likely to be suggested or broad matched by Google's system but by then your strong CTRs can give you a bidding advantage.

Assuming you are not bidding for the top three spots, most of the time it is possible to find at least some keywords between fifteen and sixty cents even when the related high traffic phrases are averaging over a dollar a click. You may even get some clicks for under five cents. Cost per conversion is awesome when a very targeted phrase has one impression, one click, one sale, click cost two cents. These are very rare though.

There are notable exceptions where finding inexpensive keywords is really a challenge. Mortgages and making money online are extremely tough and might be best tapped by other means or by a creative niche. General real estate related keywords in major real estate markets will be very high while those for smaller cities and towns may be quite reasonable.

[Robbed]

flyingrose thank you very much for your valuable advice, I am in the process of trying it out ..

[flyingrose]

Robbed, I'm sure you've heard the saying "life is not fair". Bureaucracies are typically not in the fairness business. They are focused on making money especially if they are a publicly held company offered in the stock market. They are so large that they are unable to offer the type of personalized service a smaller company often offers at a price the public is willing to pay.

They must automate and apply global policies. How those policies affect the individual advertiser can not always be predicted in advance. Decisions in most large corporations are based on what is best for Fortune 400/500/1000 companies - not small businesses. That actually makes sense because if you lose a giant account it hurts a lot more and is far more obvious than if you lose tons of tiny accounts.

Remember too that they are typically focused on short term benefits. While I consider long term benefits more important, they are less easy to predict and less often used for decision-making especially by publicly-held companies who must answer to the stockholders and provide quarterly reports.

The solution is to help each other figure out how best to utilize the services they can provide at the least risk to ourselves. We can also influence large companies to modify their policies to better suit their smaller clients. By doing so we help them understand how they can grow their businesses by keeping their customers happy. They do want our business and when they see that an issue is important to a large number of clients they are likely to modify their policies on that issue.

PPC ads and particularly Google Adwords (because they have such a lion's share of the traffic) are an exceptional benefit to anyone desiring to create and grow a business. I am extremely grateful for the awesome opportunity they offer. Believe me when I tell you that if you can get your ads working for you the potential can be enormous.

PPC advertising is far more complex than many realize though. For anyone who can afford it I highly recommend you seek out expert assistance from exceptionally talented consultants. You can tell who they are by what they write. If you cannot afford assistance I can offer a limited amount of free advice to point you in the right direction.

[Robbed]

well thank you again for your offer of advice and your well reasoned posts - I may take you up on your offer again as I experiment more.. :)