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I have an idea that I want to try and validate via a landing page and Google adwords. The plan is to try and get 100 visitors a day for a few weeks and measure conversions. Pretty standard stuff.

The problem is that it seems that every keyword in my niche is at least $5 or more a click. These are mostly long tail keywords that are extremely targeted.

My question is what am I doing wrong? Is the high cost of CPC indicative of a too competitive market? Or is there some way that I can drive down the CPC? Perhaps I'm being too specific in my keywords and need to target more popular keywords?

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Optimizing adwords is a complicated topic, but something to keep in mind is that Google doesn't just display ads that bid the most. If you are paying CPC then Google only makes money if people actually click the ad. It does no good for them to show an ad that bids $10 if it never gets clicked, they make a lot more money with a $1 ad that gets clicked thousands of times a day.

With that in mind, you don't necessarily have to outbid your competitors, what you need to do is get a good quality score for your ads and get a good click through rate.

The way to achieve this is by having different ads for different keywords you are targetting. That way you can incorporate the keywords in each ad. Google will assume your ad is appropriate because it contains the keywords and you will also get better click through rates as your ad will appear to meet what the person searching is looking for.

Like I said, Google Adwords optimization is a very big topic and I am by no means an expert. So the above information should be taken as a general concept and I would recommend researching the points further.

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What am I doing wrong?

  • The long tail is the obscure, not typically sought after keywords. You usually have to bid on tons of these to make up the same traffic you would if you bid on just one popular keyword phrase. But the theory is the cost of traffic from many obscure terms would be less then the cost of the same amount of traffic from the most popular terms. You need to go further down the tail.
  • If you can't think of more niche terms and your CPC is still $5/click then you have to accept that there is a market that exists and it it relatively competitive. It's going to cost you more money to test your theory... or you need to test your conversion rate % on 10 people a day versus 100. Or however much you can get before your ad budget runs out.
  • I don't think going from more obscure keywords to the most popular will drive down your CPC. Typically your CPC will only go down as your Google quality score goes up. However, if it's a competitive market it's going to be expensive no matter what.

I've seen attorney, insurance and some technical services over $50 per click. If you want to test your idea in a competitive market the best thing you can do is try and spend your money wisely. Do this by being picky on keywords, doing A/B split testing, limit/tailor your ads geographically.

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