With costs rising and click throughs falling, are Adwords good value?

The lastest study from Iprospect shows that Adwords are becoming more expensive. Cost Per Click (CPC) has risen significantly in the past 3 months. Does this mean that some advertisers will be forced out? Well probably. Not only is the CPC rising but the Click Through Rate (CTR) is falling. The biggest fall in CTR was on mobile devices which quarter on quarter saw a whopping 17% decline, and 52% in the past 12 months! However, online shopping has increased substantially, especially from mobile devices.

So it’s sort of good news for retailers! Volume is up even though the cost of acquisition is also up. The report also shows that B2B advertising is becoming the most competitive in terms of bids. Google has put an increased emphasis on bid price rather that the quality of the result, which doesn’t help. However the value of each customer acquisition is substantial.

Paid search is still a great performing channel but it is definitely becoming more expensive. Advertisers will have to pay more if they are to keep on doing what they are doing. To get a better return the ads will have to become better targeted, and this especially true in the B2B area. Businesses will need to put resources into this and know the lifetime value of a customer.

All ads whether Adwords or Social Media posts have to be tested and measured constantly. Many smaller businesses do not do this crucial step and this failure will throw them out of the advertising space!

Will this be good news for Social Media ads? Probably. Watch this space!

To learn more about what’s happening now, what to expect for the rest of 2017, and how to get the most out of your paid search efforts, download Iprospects full report.