Schedule your FREE growth strategy session

If your website generates over $20k per month, let’s chat. We’ll discuss your goals and figure out how we can help your business get to its next stage of revenue and growth. 

Client feedback

Mac Steer
Mac SteerSims Direct Owner
Read More
“Almost $4 million in revenue from basically nothing.”
Matt Childs
Matt ChildsWine Stash
Read More
“[They] helped us to more than 10x our conversions while decreasing the amount we're spending on Adwords almost every day.”
Ellen McCaleb
Ellen McCalebHeadwaters Studio
Read More
"My conversion rate went from like 1.83 to over 9%."
Pat Langley
Pat LangleyVaikobi
Read More
“We've been using them for just over a year now and we've had incredible success. We've grown our online business 145% and achieved a ROAS of 4.9. Fantastic return on investment!”
Read More
"Our ROI's went from 88% to 275%, which is huge."

Over 1.4 million views and growing fast on YouTube

We’re proud to be helping thousands of ecommerce business owners by giving the most digestible, battle-tested advice to be found online about succeeding with Google Ads.

Be sure to follow our channel to stay in the loop.

Google Inflating CPC

Google Confirms Inflating CPCs: What Advertisers Need to Know

Delve into the mechanisms behind Google’s ad auction pricing and discover effective strategies to mitigate its impact on your advertising costs. Stay ahead in the advertising game with insightful tactics.

You may have heard about Google's recent legal issues and how the U.S. government is looking closely at Google's prominent role in internet searches and, specifically, allegations of CPC inflation.

One crucial area they're examining is how this affects ads, especially the ones you see when you search for something. These ads make up a huge part of Google's earnings.

It's believed that Google might be adjusting the prices in their ad auctions, and there are some things you can do to look after your interests.

Shifting ad positions

In the trial, an insider who knows about Google's workings said that Google changes how they promote ads. Sometimes, ads that are ranked lower get shown more prominently than higher-ranked ones.

Why? To make more money by displaying ads in spots with higher minimum prices.

Here's how it works: In a usual ad auction, Google puts all the ads that are competing for each position on the search results page (SERP) in order. The one with the highest rank usually gets the best spot.

But sometimes, the top ad might not meet specific Google rules and can't be in the top position. In that case, Google will run an out-of-order promotion that allows a lower-ranked ad to jump into that top spot. But this isn't at the price that the lower ranked initially opted for; it's at a raised price to the advertiser. 

It allows Google to show an ad in the top spot while adhering to their eligibility rules. This tactic helps keep the ads relevant and benefits advertisers, with lower-ranked ads appearing in premium positions. It obviously also earns Google more revenue.

Minimum prices and auction limits

Have you ever wondered why the cost of your ads keeps going up? According to what was said during the trial, Google quietly adjusts the lowest prices for auctions and the minimum amounts you must pay, slowly making advertising more expensive.

The auction's minimum CPM (cost per thousand impressions) and the related CPC (cost-per-click) determine if you can be in the advertising competition. CPC is the least you must pay to have your ad shown in a specific spot. CPC is calculated by combining each ad's QS (Quality Score) and the auction's reserve price. In this setup, you can only control how much you're willing to pay.

If Google raises the minimum amount you can bid, you have to increase your bid and budget to have a chance at being seen. This change affects everyone and makes them spend more to get their ads in good positions. In effect, CPC inflation causing a big chain reaction!

Inflating CPC

Protecting your interests when CPC changes happen

Google plays a bit of a black box game with CPC inflation, and they won't notify you about pricing changes. This may lead you to think that your optimizations weren't effective and led to increases in price when, in reality, it was beyond your control.

However, there are a few ways you can control your costs:

  • Leverage Quality Score: To minimize ad auction costs, focus on reaching the expected click-through rate and ad relevance. A higher Quality Score means a better Ad Rank and lower costs per click. Quality Score is your golden ticket—work on it diligently.
  • Stay Vigilant with Monitoring and Alerts: Use PPC monitoring tools to get alerts on price changes. Being proactive allows you to react swiftly and make necessary adjustments before things spiral out of control.
  • Benchmarking for Insight: Compare your metrics with industry benchmarks to gauge whether a price hike is widespread or specific to your account. This intel helps you tailor your optimization strategies accordingly.

Strategy changes for the best results

The previously mentioned suggestions focus on a holistic level of control. Still, you can tailor your campaign more directly to adapt to the current environment.

You can revert to a manual CPC strategy. Even though it may seem like a good idea, it won't give you the same results as Smart Bidding options.

An alternative technique is to use a portfolio bidding strategy. This entails establishing your maximum CPCs, allowing you to reap some benefits from Smart Bidding while placing a cap on the CPC you're willing to pay. This option is best for you if you're sensitive to CPC (cost-per-click).

Share this article:

Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

'How To Write Successful
Google Ads'

Google Ad Ebook Cover
We are committed to protecting your privacy, as described in our Privacy policy.
Sam single blog pages

I hope you enjoy reading this article.

If you want us to help you scale up your ecommerce business, book a free strategy call.

Subscribe to Our Newsletter to Improve Your eCommerce Digital Marketing!

Thank you for your interest in our newsletters. We will send you only the most important news and updates. No spam, we promise.

We are committed to protecting your privacy, as described in our Privacy policy.

What’s your goal today?

1. Hire us to grow your ecommerce store

We’ve generated millions for our clients, using the methods we’ve developed over years with a singular focus on Google Ads for ecommerce. To discover how we can help grow your business:

Claim your FREE website strategy session with one of our renowned experts.

2. Learn & develop your ecommerce skills

Watch our highly regarded YouTube channel, followed by over 23,000 store owners and ecommerce learners from around the world.

You can also subscribe to our weekly email newsletter to get real-world tested growth and optimization strategies, as well as notifications on anything you may need to know as an ecommerce store owner.

Browse our blog, written and structured to be the best resource in the world for anyone starting and growing their online store. It includes strategy guides, setup instructions, checklists, and tools.

Explore our KeyCompendium, which is a comprehensive wiki of digital marketing terms. Many readers have commented on the usefulness of this content.

3. Join our team

If you want to join our team—or discover why our team members love working with KeyCommerce—then see our “Careers” page.

4. Contact us

We help ecommerce store owners around the world, so get in touch!