In this article I’m going to reveal the 3 steps you can use to reduce your Google Adwords search cost per click (CPC) by as much as 94% and maintain the same ad rank.

Every market is different so you may not be able to reduce your bids by 94% like I did for one of my clients, but if you follow these steps you’ll definitely cut your costs without losing traffic.

The three steps are:

  1. Get Clicked
  2. Play Bid Limbo
  3. Isolate Top Performers


1. Get Clicked

The first step to reduce your ad cost is to improve your ad click through rate (CTR).   In my experience, your ad CTR is the #1 factor in determining your Quality Score.

Google wants to display advertisers who give their users exactly what they are looking for (i.e. ad relevance).  The best measure of ad relevance is click through rate because people click on ads they believe will answer the question they’re searching for.

So Google rewards advertisers with high CTR by giving them better ad placement and lower cost per click.  There are other factors that affect your overall quality score, but CTR is king.

For more info on how to write compelling ads that will “get clicked,” read “How to Write Profitable Google Ads.”

This step is really never complete because you should NEVER stop testing to get a higher CTR.  Over time your ad copy may not work as well so it’s critical to continually optimize by rotating new ad copy.

Once you have your ad tests running, then move on to step 2.


2. Play Bid Limbo

This is the fun part and where you’ll see the big cost savings assuming you put in the work in step 1.

To “play bid limbo” you simply test how low Google will go before they drop your ad rank.

For example, let’s say you’re bidding $2/click, but you’re only paying $1.50 to be at the #2 position.  You can lower your bid  between $1.50 – $2 and then re-evaluate in a day or two to see how that impacts your ad position.

Typically, I’ll find that my position will not drop, but my actual cost per click (CPC) will go down as I drop my bid.

For one of my clients I was able to drop my actual CPC from $1.22 down to $0.07 using this technique.  That’s a 94% decrease in cost!

Now this is highly dependent on your ad CTR, which is why it’s so important to focus on step 1 before you start playing bid limbo.  If you’re CTR is bad relative to your competition, then you will not be able to get a big discount.

So if you try this strategy and it’s not working for you then go back to step 1 and work on your ad copy.

If this does work for you and you’re able to drop your CPC without losing your ad rank, then you’re ready to move on to step 3.


3. Isolate Top Performers

Once you have a high ad CTR and you have driven down your CPC by playing bid limbo, then the next step is to isolate your top performing keywords.

By isolating your keywords in a campaign with no poor performing ads, you’ll be able to improve your Quality Score even further and, in turn, further reduce your costs.

Now I’m assuming you started with an adgroup with multiple keywords or maybe just one Phrase match keyword.

(I hope you didn’t start with Broad match and if you did then stop reading this and immediately read, “Google Adwords Checklist: 9 Key PPC Search Campaign Settings.” to make sure your campaign is set up properly.)

First, we want to find the exact keywords that are performing well (i.e. generating sales or some other conversions).  We do this by running a Keyword Query Report in Adwords.

A Keyword Query Report will show you the exact keywords that were typed into Google and triggered your ad to be displayed.  In this report you’ll see which keyword phrases are driving sales/conversions.

Second, create a new campaign and add ONLY your top performing keywords.  For example, if you were advertising on the phrase “local SEO” and you see in the Keyword Query Report that “local SEO service” is actually generating sales, then you would add “local SEO service” in this new campaign.

Third, increase your bid slightly in this new campaign in order to steal the traffic from the old campaign.

Finally, once your new campaign has some clicks and sales/conversions, then pause and/or negative match the keywords in the old campaign so only the new campaign will get impressions on your top keywords.

Over time, this new campaign’s Quality Score will improve and you’ll be able to use the Bid Limbo strategy to drive your costs down even further.

If you have any questions about this strategy or maybe an alternative that is working well for you, then please post below.