Why does a click cost over 10 euros in my industry?

A click costs over 10 euros when many advertisers compete for the same searches and each customer is worth a lot to them, so the auction price rises. In Google Ads you pay only what is needed to beat the Ad Rank of the advertiser below you and to clear Google’s minimum thresholds. In industries where a single customer is worth a lot, for example legal services, finance, insurance or high-value B2B, competitors can afford high bids because one new customer pays for many clicks.

Your own account also plays a part. Ad quality, the position you aim for and how broadly you target all influence what you pay. High click prices in an expensive industry are normal; paying more than necessary is not.

How does Google set the price of a click?

• Ad Rank decides position. Google calculates Ad Rank for every auction from your bid, the quality of your ad and landing page, the Ad Rank thresholds, the competitiveness of the auction, the context of the search and the expected impact of your assets.
• Actual CPC is usually below your bid. You pay what is minimally required to clear the thresholds and beat the Ad Rank of the competitor immediately below you. If nobody is below you, you pay the reserve price.
• Top positions cost more. According to Google, thresholds and actual CPCs are typically higher for ads above the search results than for ads below them.
• Close competition raises prices. When two ads have similar Ad Rank, the gap is small and the price to win the position goes up. Your price is influenced not only by the advertiser directly below you, but also by those below them.

Why is my CPC higher than it needs to be?

1. Many strong competitors. Check the auction insights report. Impression share, overlap rate and outranking share show how many advertisers compete with you and how often they rank above you.
2. Low ad quality. If expected CTR, ad relevance or landing page experience is “Below average” for your main keywords, you need a higher bid for the same position than better-rated competitors.
3. Aiming for the very top. A target impression share bid strategy aimed at the absolute top of the page, or high manual bids, push you into the most expensive auctions.
4. Broad reach. Broad match, wide location targeting or search partners can add auctions that are expensive but rarely lead to customers.
5. Bid adjustments or automated bidding. Google notes that actual CPC can exceed your max. CPC when bid adjustments or automated bidding are used.

How can I lower click costs?

• Judge by cost per customer, not cost per click. Work out what a lead or sale is worth to you. An expensive click that regularly brings customers can be cheaper overall than a cheap click that never does.
• Improve ad and landing page quality. Ads that match the search closely and landing pages that answer it directly improve Ad Rank, so you can hold a position with a lower bid.
• Focus your keywords. Concentrate on searches with clear buying intent, check the search terms report regularly and exclude terms that do not fit with negative keywords.
• Narrow targeting. Limit locations, times and networks to where you actually win customers.
• Plan with Keyword Planner. Before you expand, use Keyword Planner to estimate costs for new keywords. Google points out that real results depend on bid, budget, ad quality and targeting.

Our budget calculator works out what budget follows from the click prices in your industry.

Accept that clicks in competitive industries are expensive, and compete on quality and focus instead of bids alone. Measure success by cost per lead or sale, not by the price of a single click.

Sources

• Google Ads Help: Actual cost-per-click (CPC)
• Google Ads Help: About Ad Rank
• Google Ads Help: Use auction insights to compare performance
• Google Ads Help: Use Keyword Planner

Paying high click prices and unsure whether they are worth it? We analyse your auctions, ad quality and targeting and show you where you are paying too much. Book a free intro call or read more about our Google Ads management.