Greetings all, I help run a rather large agency here, and we have been experiencing some issues with our adwords accounts since the holidays. We have quite a few large accounts, with spends on average of 1000's per day. Our average cpc for all the accounts was ~.40 a click. We made great profit with this, and had a large volume of conversions for the past few years. Ever since this holiday season, starting around november, we have had a spike in cpc. Lately we average almost double the cpc, and our conversion volume is down by almost 50%. Has anyone else experienced this? Our conversion rate and our ctr remain constant. Impressions and clicks are both down. We've also noticed we have LESS competition! Is google just inflating advertising prices like crazy? We are having trouble keeping up with the front page bid requirements. Good thing our msn accounts are kicking ass right now, they are picking up the slack.
Google is not the one inflating prices. The advertisers set the prices. I've noticed this for one client but the trend started many months ago. I believe there are a few newer competitors and others may have increased bids and even quality, although his quality is great with many QS of 10. Another newer client I've managed to reduce his cost from around $5 to $3 per click by improving quality and hoping to do more. Another has higher click costs but only because we increased bids to get in higher positions. This has resulted in higher conversion rates and the CPS has gone up only slightly as a result, hence, more profits. Take a good, long, hard look at your campaigns and see where you can improve. Sounds like you've been sitting still and being overtaken by others.
Are the costs increasing for the Adwords search or content network? One major change Google's done is reduce the face-time for 'content farms', giving other sites a chance to appear near the top of SERPs.