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How to Reduce Cost Per Lead in Google AdWords

Adithya Kumar

November 1, 2022

The art of marketing has evolved into reaching your ideal audience through search engine results pages, specifically Google. This platform is the biggest search page consumers go to search for products and services they need. So it makes it a strategic gold mine for marketers to advertise their products or services on the platform. Now the challenge is to be seen by said consumers on the platform rather than exhausting your budget. So while Google has made an advertising tool available for brands to run google ads and target a specific audience, you might need to pick up a few tips on how to use it effectively

Some businesses and brands that start on the platform use the PPL campaign payment model, which means you pay for every lead the ad generates. The cost of the generated lead is pre-decided on the platform. Once you start generating those leads, payments must be made for the ad to run without interruptions. This form of advertising can be structured to stay within your budget to get top-quality leads while also paying the Google leads cost. Remember that the average Facebook cost per lead across all industries is $19.68. So a good cost per lead would be around that amount. This blog will explore how you can successfully reduce CPL in Google ads. 

The following ways to reduce your cost are:

1. Narrow Down Key Words

When you start with Google Ads, your natural marketing instinct will tell you to cast your net into the vast ocean of consumers and see how many users you can get. This might not be effective initially because you would be waiting for your resources of consumers that might not be interested in what you provide. The Google Ads platforms functions based on specifics and how well you understand your target audience. If you can pinpoint exactly what your audience is looking for, then you will appear on their search results more frequently and get more success with leads. The more relevant your keywords are, the more relevant your audience will be. Please do not get stuck including broad keywords in your ad metrics, as it is not cost-effective and you will probably not get the desired results. You can always access PPC keyword ideas through third-party sites.

Once you have narrowed down your keywords and made them more specific to your product or services, this will reflect on the Google Ad platform. The ad copy will be more refined and targeted, while the keyword bidding strategy will be more effective. For example, if you want to find Nikon camera patrons in Sao Paulo, Brazil, you need to enter specific keywords to find your ideal audience. A broad keyword like Brazil will give you a large audience pool that might prefer something other than cameras. Including just Sao Paulo and camera might get consumers who don’t like that camera brand. But, including Nikon will narrow the audience pool to a specific number of consumers with the highest chances of generating a lead. This kind of directed and throughout keyword selection will save you money on leads that will not be conversions.

Similarly, when you know exactly who your audience is, you can match your ad copy to be more specific and have the ad speak directly to consumers. This would feel relatable to your target audience, as generic ad copies don’t make an impact on niche audiences. With time, you can make more directed ads and hone in on what your consumers want. Your budget will also be more streamlined for your future CPL campaigns. 

2. Observe Consumer Search Queries 

As mentioned before, being specific is essential. What also is vital to achieving a reduced cost for your leads is figuring out the kind of search queries consumers in your industry are putting out. This play a significant role in creating a solid PPC (pay-per-click) campaign. You can effectively hone in on your most promising customers in the process. By analyzing the search queries on Google, you can find the audience that would be most beneficial to your ad and the least desirable audience pool. If you figure that difference out before you start running your campaign, your ad might be clicked on by these uninterested groups, but the leads would be fruitless and will take up your time. This would also reduce the CPL in PPC campaigns in the long run.

Including negative keywords in your ad targeting metrics is an effective practice to incorporate into your strategy. This is an economical method of spending your ad budget. By including these words, you also open up new avenues by which you can explore new keywords that have better relevance and results. For example, you can redirect more money into the new keywords you find and stick to high-performing ones as well. Negative keywords might sound like a bad idea to someone starting just from the name, but they are the opposite. These words can positively affect the growth of your PPC campaign and help ease any staring on your ad budget. 

There are three main reasons veteran marketers include negative keywords in their ad targeting metrics. The first is that it assists in filtering out any irrelevant or non relatable searches. For example, if you create an ad for running shoes, you could put your negative keyword as shoes. This would prevent your ad from popping up on the SERP of consumers just looking for shoes rather than running shoes. Then, thereby you save money from your ad appearing on unnecessary searches. 

The second reason is your ad will show up on the SERP of consumers that want the product or service you are selling. These consumers would also click through your ad and give you a quality lead that you can follow up on. The final reason is negative keywords reduce the overall cost you spend on keywords by eliminating the ones that give you the least amount of ROI. Of course, your conversions would also be better when your negative keywords are included and the overall cost of leads will be reduced.

3. Conduct A/B Testing For Different Ad Elements

If you have been in digital marketing, then you are well-versed will the capability of split A/B testing. For those new to the space, this testing compares two ads based on their ad copy and design. These ads are shown to test consumer groups and the results in terms of reactions are analyzed. The main aim of this comparison is to find which ad format and content perform better within targeted audiences. 

It would be best if you remembered that the landing page you use for both ads needs to be similar so each has a similar customer journey. At the same time, the ad copy and elements like imagery and tone can differ to give a consumer opinion from different perspectives. The results of conducting A/B split testing will give you a better idea of what kind of content the target audiences lean towards and what drives the highest click-through rates. This will lead to higher conversion rates for the brand’s ads. 

Google Ads offers users different options when they want to optimize this testing:

  1. Optimize for clicks; this pinpoints ads that will gather more clicks for you.
  2. Optimize for conversions; this shows ads that will lead to more conversions. Then, there is rotate evenly; spreading the ad exposure over 90 days and optimizing it.
  3. Rotate indefinitely is when Adwords shows the low-performing ads more evenly on the platform, as shown in the image below.

These optimization options should be thoroughly examined and selected according to the marketing goal you want to achieve through advertising. 

A/B testing for different ad elements


An effective practice is to select the rotate evenly option initially. This would show you which ad copy performed the best over 90 days and then you can pick the most successful one to fit into the relevant search queries. Similarly, just like how you can use A/B testing for ad copy, you can use it for landing pages. In this case, you stick to the exact copies for both ads but use different versions of landing pages from the brand website. So, for example, if you decide to test your landing page, ensure you click on the rotate evenly option. This will again show what ad performed better with your target audience. 

The A/B split testing can be done for any element of an ad to determine what is best for your audience. For example, when you figure out the most effective format for your intended audience, you will only pay for leads that will bear conversions. Instead, your overall costs for CPL ads will reduce because your ads are more appealing to the right customer. 

4. Use Location Reports To Optimize Your Ad Costs

Location is essential in how your ads will perform with audiences and how much you will spend on running those ads. For example, you should access Location reports on the Google Ad words dashboard to view that data. These reports’ significance is to detect the locations where you would achieve the most success. These areas would be hotbeds of potential prospects and audience pools that have yet to be exposed to your brand. 

To implement this data into the ads, you must first enable location targeting settings on your campaigns. After some time has passed, you can go back to the settings tab and under locations, you can monitor or track the ad’s performance according to which location you selected. When the data is located, you will be able to receive two different kinds of reports. The first is the geographic location report. This report shows consumers’ geographical location and the locations users are interested in based on their search queries. This kind of data aims to expose your ads to consumers who might not be in the exact location you are at the moment but might be interested in the area you operate in. Either for a holiday or business or an event. 

For example, if a user is situated in Kyoto, Japan, but is still looking for leisure activities in Tokyo, where your business operates. It might be worthwhile to include them in your audience pool as you offer leisure activities and the consumer is interested in those activities in your area. Similarly, the second data point you can access is the user location report. This shows the consumer’s location, irrespective of whether they are interested in another location. The data you receive here will assist you in targeting the right audiences and you will not spend money on less opportunistic geographical areas. With better targeting and better leads, your cost will reduce and conversions will increase.

5. Review Your Ad Quality Score

This concept is straightforward, Google will give you a discount on the cost you have to pay for the lead based on the quality score of the selected keywords. You will also have to funnel less money to secure an ad position. The quality score components include ad relevance, landing page experience and expected CTR. Your score for each factor is added and you are given an overall score as shown in the image below. The higher the score, the less Google will ask you to pay. 

review ad quality score


Let us explore the different factors one by one. The first is ad relevance, you must ensure that at least one of your keywords is included in your ad headline to make it relevant to the ad group you have selected. The next is the landing page experience. This factor has many subgroups you need to keep in mind. 

The subgroups are:

  • Originality – This means the content on your brand pages needs to be original and not plagiarized from other sources
  • Navigation – Your page should be clear and consumers should flow through pages easily. This includes consumers viewing the website on their mobiles.
  • Trust & Transparency – All your product information and company information should be displayed so consumers can understand your brand before they share their information or make a purchase.
  • Page Load Time – If your pages load quickly, it makes the user experience a lot smoother and consumers are more willing to spend time on your website

Finally, the last factor is expected CTR. This stands for click-through rate and Google will assess the estimated rate you will get for that specific keyword. The assessment is based on the performance of your ad. To ensure you have a high CTR, only select keywords that are relevant to your brand and your ad copy. If you are too busy to audit the quality score for your ad, view the Shown Due to Low Quality Score warnings on some keywords. Avoid them, or they might harm the overall score of your Google account. You can also use other methods to improve your Google Ads CTR.

These tips are designed to help you reduce the cost of your leads and also ensure you are getting the most out of what you pay. This is a trial-and-error experience for any digital marketer and you will only get your desired result if you experiment with different parameters. It might be tedious and time-consuming, but the overall results benefit your business. Google opens up a new avenue to reach consumers for your brand, but navigating through it all is challenging.

It would also be helpful to keep an eye on what your competitors are doing using PPC competitor analysis tools. If you need assistance in your journey, feel free to reach out to experts like SV Digital, who offer excellent PPC services for their clients.

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