[VIDEO] Why Google Shopping CPCs have increased by up to 70%

James Holmes, 
James, 

With more and more people setting up eCommerce businesses in the last year, it is becoming increasingly difficult to be seen on Google Shopping.

We analysed what has been happening to advertising costs over the last year and what you can do to react to an ever increasingly competitive landscape.

Google has recently made us aware of some changes in the statistics that they’re seeing coming through from Google shopping. So they’ve seen a rather large increase in the Google shopping CPCs year on year within the last quarter. They’re claiming up to 70% increases in shopping CPCs.

We wanted to have a look at our own clients and see if we’re seeing the same kind of things for our clients.  So what we’ve done is amalgamate all of our client’s data. We are seeing very similar trends as well, ourselves.

 

This graph shows our year and year CPC

 

CPC’s have been rising pretty much year on year, all throughout 2021, but there was an even bigger increase in Q2.  We can see the same trend that Google has identified and as a result that has impacted the ROAS.  We’ve also seen that year ROAS is down for our clients too.

If you’re noticing this on your own shopping campaigns then if you’re a business that is heavily reliant on shopping, then we need to do something about this proactively, to minimise any further risks as we move into Q4.

We’ve looked at the same data for Microsoft Shopping Ads and are seeing is the opposite story; where shopping CPCs are decreasing. Generally speaking, Bing has been cheaper for shopping clicks, as a result, ROAS has been the same or better than last year.  So if you have an account that’s not running have Bing shopping the first thing we would say is definitely have it set up and we can support that or invest more time and money in Bing over the next few months.

Another huge thing to consider is if it’s going to cost more to get a click to your website, you want to make that click more efficient and worth more to your business; so conversion rates and average order volumes are going to be huge key metrics.

Making the most of your paid clicks

Conversion Rate Optimisation (CRO) is going to be a huge thing to look into over the next few months and beyond because if we are getting fewer clicks to our website within our budget, we need to maximize the efficiency of those clicks. Making tweaks to your website to make it a more user-friendly experience.

One of the reasons why CPCs might have gone up is because a lot of competitors in the field have increased the efficiency of clicks on their website and are willing to pay more for their clicks.

Another thing was the average order value, one thing that is working really well for some of our clients is, is encouraging clients to increase their basket order size by giving them free delivery or percentage off for orders over a certain threshold.  This can help turn £50 orders into £80 or £90 purchases, increasing your average order value and making sure that the clicks you’re getting from Google are delivering more money in your pocket.

If you’ve found this useful and you’d like us to help set up Microsoft Ads or improve your conversion rate or basket size, please get in touch today!

 

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