June 28, 2016 – a day that will live in infamy. Hopefully not, but maybe. After letting the dust settle on the Fourth of July holiday weekend, we at PMG have continued to notice a disturbing, but familiar, trend. Google Brand CPCs (average cost-per-click) are on the rise. Yes. Again. This time, in mobile.
What do the numbers say?
After sifting through all of the hearsay of the past few weeks, we finally compiled the data for a handful of clients. Out of our sample pool of clients that did see the mobile CPC spike, the numbers were pretty shocking. On the actual day that we noticed the shift (Tuesday June 28th), these brands averaged 50% higher mobile CPCs on Google than the previous 7 days, with some brands experiencing as much as a 70% jump. In the week to follow, most brands saw a bit of relief as mobile brand CPCs saw a small correction. But in the 7 days that follow, we still see an average 30% lift when compared to the pre-lift period.
Why the rise?
Our initial inkling behind the spike was that the Fourth of July is typically one of the most competitive weeks of the summer. Promotions flood the marketplace with brands vying for the almighty click. But, this theory doesn’t seem to hold its weight when we take a step back. We’ve seen nothing out of the ordinary when examining the competitive landscape (we’ve combed through Auction Insights reports and other 3rd party tools). In addition, as we mentioned previously, now that the hubbub of Fourth sales has seemingly died down, brand CPCs in mobile have remained consistently inflated.
Now let’s make one thing clear: there is no guarantee that your brand has seen or will see this increase. This appears to be affecting the majority of our clients, but there are definitely those that have seen stability over this timeframe. If you are not in the habit of monitoring your device trends, we would strongly suggest that you dig into your Google AdWords account.
So if we aren’t chalking this up to competition, what’s the deal? Let’s do some simple detective work here. Fact #1: Mobile paid search traffic has continued on the rise for the past several years and now has surpassed desktop. Fact #2: CPCs are much cheaper on mobile. Some estimates would say by as much as half. (We have several brands that enjoy upwards of 90% lower brand CPCs on mobile vs desktop!) Conclusion: We may be experiencing a rise in minimum CPCs for mobile, with Google vastly aware that they are losing money as more traffic shifts away from desktop.
Without any official word from Google on the mobile rise, we’re left to only speculate. In the current landscape, where mobile clicks on Google are so much cheaper and now make up a larger piece of the pie, it is only logical to assume that at some point, mobile CPCs will begin to rise. Maybe that time is now. If you remember, it was just under a year ago that Google seemed to implement a market correction for brand CPCs that had everyone in a tizzy.
What can we do?
- Use ad extensions. Seemingly a no-brainer now, but make sure you are utilizing as many appropriate extensions as possible. You may be rewarded with higher click-through rates (CTR) and possibly lower CPCs.
- Test the limits. If it’s been a while since you have update you brand bids, maybe now is a good time to test lowering those max CPCs? Watch that impression share closely though! We have several brands here at PMG that utilize algorithmic bidding tools to achieve optimum bid, but if you are not that advanced, simply pick a handful of your top brand terms and back down those bids a little each day.
- Optimize for mobile. Also seems really elementary, but often forgotten. Mobile is a separate device and should be treated as such. You should test, monitor, and optimize separately when it comes to mobile extensions, ad copy, modifiers, etc.
Again, this could be all for naught and we could simply be seeing a change or correction in the market. We’ll have to be patient to see how it all shakes out.