Other factors may have contributed to improving the campaign’s performance, but I have seen this happen enough times to be confident in recommending clients to at least try a test.
Keep in mind that during the test, you might miss out on a small percentage of high-value clicks. If this happens, you can simply revert to your original settings.
However, the potential upside is that you eliminate clicks you’re being overcharged for and improve your ROAS for the foreseeable future.
The one caveat is that CPCs and caps perform differently around holidays and other tent poles, so be careful not to set the caps too low.
Dig deeper: There is no ‘best’ Google Ads bidding strategy, study finds
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Implementing CPC caps
To run the test yourself, start by building a report like this with a selected long date range. (I’ve filtered clicks here to include >0.)
Next, download the report to Excel and in Excel, create a CPC column rounded to the nearest cent.
To create your distribution buckets, use a formula like the one below. This formula will match the CPC within a range of upper and lower bounds.
To calculate ROAS, use the Fields, Items & Sets button to create a calculated field as shown.
Then, pivot the table using fields similar to those in the image below.
The result should yield a data table like this, which can help you determine whether meaningful spending is dragging down your performance.
Finally, implement a maximum CPC within your portfolio bid strategy in Google Ads.
Run the configuration for a point-of-purchase (POP) table to see if your performance has improved. Hopefully, you’ll see savings of as much as 5% of your spend.
Working within Google Ads requires knowing its mechanics and tactics, like implementing CPC caps to optimize and improve an account. Moreover, it can ensure you get the most out of every ad dollar you invest.
Dig deeper: Branded keywords: How Google Ads drives up CPCs
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