The main purpose of contextual advertising is to increase sales or profitably convert traffic. And usually advertisers launch campaigns with payment for clicks – user clicks on links to the main site or a single page. Of course, you always want to save money, and the price of clicks in some niches is just off the charts. So let’s figure out what this price may depend on and what factors will help reduce it.
A little bit about bid assignment
Every advertising campaign has a purpose. And based on that goal, the advertiser chooses a payment model:
- CPC is pay per click (click-through). The account is charged for any click on the link that brought the user to the promoted page. This payment model is commonly used to increase sales and leads.
- CPM – pay per 1000 impressions. The money is withdrawn after each thousand broadcasts of the ad. This option is suitable for companies that want to increase brand/product awareness.
The rate is the price of 1000 impressions or the cost per click. Its size is determined automatically in a special auction, in which the first places in the ad impressions are taken by ads with the highest prices of clicks/views in a particular market segment. In the context of the rates can be set independently, or trust the system, which determines their size automatically, taking into account certain factors.
The simplest and most popular type of rate is the cost per link click. With this approach, the ad gets in the eyes of the target audience when the cost per click is less than or equal to the one that was previously assigned as the limit.
The most clickable (and most impactful, costly) are the displays from “Special Placements,” the part of the display that occupies the first 4 lines. Next comes the 5 lines of the block “Guaranteed displays”.
Changing rates in Direct and Ads
How effective it will be, and how much the campaign will cost the webmaster depends on the time of display ads. For example, if the target audience of the product – office workers, it is logical to show them ads in the evening, when they rest at home. But you should always pre-calculate the optimal time to show, identifying a time of peak activity of the target audience.
To change the broadcast time of your ads you need to:
- In Yandex.Direct – open the “Campaign settings” section and then “Time targeting settings”. Then you need to activate the bid management function. But, Direkt allows you only to lower the price and set a specific time of display of advertising.
- In Google Ads – go to “Settings” and open “Schedule ad impressions”. The first thing to do is to select the time frame in which the rates will change. Then it is necessary to make adjustments in percentage (it is possible both in the smaller and in the bigger side).
What affects rates in context
Let’s look at 10 key points that have a direct impact on the cost per click and 1,000 ad impressions.
1. The degree of competition
A very important factor. And especially in CPC, where the cost of link clicks can be regulated by webmasters themselves. And the larger amounts will be offered by competitors, the higher will be the rates in a particular niche.
Advertising networks themselves display the optimal (approximate) amounts of bids, which can provide the top in a particular niche. But if all webmasters will offer a price that will be lower than the minimum, then the special placements will be empty, and only the next 5 blocks will be filled.
2. subject matter.
The subject matter of the ad has an indirect effect on bids in context. The fact is that payment amounts are set through an auction, so competition plays a much larger role in this regard.
In other words, the harder the competitors fight each other for the top spots in a listing, the higher the bid will be. Paradoxically, but, for example, the price of a link to advertise luxury real estate is often lower than the cost of visiting a resource with children’s toys.
3. Clickability (CTR)
CTR refers to the ratio of the number of clicks on the ad to the total number of impressions of the ad. And the more often users will click on ad links, the more will earn not only the webmaster, but also the advertising network. This is why both Google and Yandex are always trying to encourage their clients with high CTR and reduce their rates to get to the top. But, this has no effect on the display of ads on third-party sites (partner sites of the advertising network).
4. GEO
The region in which the ad will be shown also plays an important role in terms of the size of the rate. For example, in Russia there is the highest competition in regions such as Moscow and St. Petersburg. Therefore, the rate in the capital will be much higher than the rate for a similar ad to be shown in any other region of the Russian Federation.
That’s why experienced advertisers always divide the regions of display before starting to work with context and prefer to work with rates separately. If the campaign is aimed exclusively at specific people, but not a district or city, then the price of impressions and conversions will be lower if you broadcast advertising not only in Moscow and St. Petersburg.
5. Queries
Queries are keywords applied by a search engine user to get an answer to their question (which will be generated in the output). If the advertiser covers the keyword queries, he gets relevant traffic to his site. Queries can be low-frequency (entered rarely), medium and high. And they are subdivided into 3 more important types:
- Commercial (or transactional). These include phrases like “cost,” “buy,” “order,” etc. Conversion for such keywords is the highest, because people who enter them in the search is already aimed at the purchase of a particular product. Of course, the rates for such keywords are the highest.
- “Problematic.” They are used by people who want to solve a problem. And after all, market products are developed just to solve problems, so such keys also have a good conversion rate. Compared to commercial keys, “problematic” keys are not as competitive.
- General (informational). These keys are entered in order to find some information (for example, get an answer to a specific question). Rates for them (as well as conversion) are minimal, because it is very rare for a user who came for an informational query to buy something.
Conclusion: in order to get the maximum benefit from an advertising campaign, before launching it, you need to work carefully on the semantic core and take into account the frequency as well as the type of each query.
6. Stop words
Stop-words (or minus-words) help to exclude ad impressions for irrelevant keywords. It is difficult to predict in advance (and even more so for a beginner) what specific queries will be used by potential clients, so you have to cut off the stop words in the course of the campaign. If you neglect this rule, advertising costs will be decently increased, and the CPC will grow.
7. Ad Context
Advertising text – one of the main “tools” to attract potential customers to the landing page. It should be brief and include the information that will provoke the user to click on the link.
As practice shows, an ad that contains in the text can be clickable:
- the main key query;
- product benefits;
- a call to action (click on a link, etc.);
- extensions – additional attributes like quick links, contacts, rating, etc.
The more thoroughly thought out and the better the ad is, the more useful it will be to users (and from the advertising network as well).
In other words, the attractiveness of the text affects the relevance of the user query, and hence the clickability of the ad, as well as the cost per click or thousand impressions.
8. Show time
We wrote about this above – each target audience may have a different peak time frame for Internet use. Therefore, the rates for the time of decline in audience activity are always lower.
Many advertisers often make the grave mistake of simply turning off ad impressions at night and on weekends. They explain this by the fact that at this time no one will be able to answer the phone and talk to the potential client. But this approach is better not to practice and think of a solution for a preliminary appointment for a consultation or simply inform the visitor that he will be contacted in the near future.
In all other situations, advertising campaigns in context should run nonstop – 24/7.
9. Devices
Surprisingly, even today, when more than 50% of search engine traffic is on mobile devices, not all web resources are adapted for them. Therefore, advertisers simply turn off displays for such users. Accordingly, in this way they reduce the rate and save money.
You can do the same with desktop traffic, leaving displays active only for “mobile users”. This will also lead to lower rates. Yandex has a division for such a solution for desktop and mobile devices, and Google additionally offers tablets.
10. Target page
Landing (or landing) page – the page that opens to the user after clicking on the link in the advertisement. The text (and all content) on this page should not only be of high quality, but relevant to the text of the advertisement and the selected keywords. Also, this page must meet the requirements and rules of Yandex and Google. If its quality will leave much to be desired, the rate will be increased. As the number of bounces.
How stopping a campaign affects rates
By launching a new ad campaign, you can see the system’s prediction regarding the clickability of the ads (a factor that affects the bid). But in the course of the campaign, clickability statistics will be collected – that is, the system will receive up-to-date data. And if on the basis of these data it turns out that the actual clickability is less than predicted, the CPC will increase (if more, it will decrease). Therefore, when stopping the campaign, it is possible to both decrease and increase the price of clicks/views.
There are many factors that affect the rates in contextual advertising. The most significant of them: competition in a particular market segment and clickability. But every advertiser must keep track of all the factors that can change the rate and engage in constant optimization of the campaign.