Why is Your CPC Decreasing and CPA Increasing During COVID-19?
Although we don’t have any conclusive data as to why we’ve seen a decrease in average CPC’s metrics over the last few weeks, we can assume this trend has occurred due to fewer advertisers on the Google Ads and Facebook Ads platform and/or advertisers having less budget and thus bidding less.
Let’s take a look at a few Facebook ad examples:
Client A: £0.30 during February and £0.21 over the last 7 days.
Client B: £.39 during February and £0.25 over the last 7 days.
This is great news for advertisers. These decreases mean you will get more clicks per £1 spent than before. Although not set in stone, it’s likely that CPC’s will rise again once businesses advertising starts to move back to normal. But for now, take advantage of the traffic.
You might find that despite a drop in CPC, you still see a slight increase in CPA (or cost per conversion). Some industries will be more greatly affected by this than others. Industries where search volume remains steady but intent decreases will the greatest hit (for example real estate or car sales). With more people at home, there's likely to still be a good amount of search traffic, however, how many of those people are actually likely to enquire right now about buying a house or a car for example? Purchase/enquiry intent is much lower than previously. Take advantage of remarketing here. Just because these visitors haven't converted, this doesn't mean they're not interested. They're probably just not quite ready to enquire given we're in the middle of a global pandemic.
Let's take a look at some numbers
Example:
Let's say your car sales campaign was previously running with a CPC of £1 and CPA of £10. If you CPC has now dropped to £0.80, you'll be getting more traffic however there is less purchase intent so instead of 1 in every 10 people making an enquiry, you're now looking at 1 in every 15 making your CPA £12.
Don't panic. This will return to normal and we're already seeing increases in conversion rate in many of the accounts we manage here. Take advantage of the extra traffic due to low CPC's and get remarketing set up ready to advertise back to those non-converters in a few weeks time.