How Inflation is Impacting PPC

Root Keywords are main keywords that marketers need to identify when setting up a PPC campaign. Usually Root Keywords are higher volume words that will trigger much longer tail keywords. It is not necessary to begin a campaign with tons of longer tail keywords. Only a few high volume root keywords are necessary to get started.

Increasing CPC Costs due to Inflation

Inflation has been on the news and it definately impacts business results both from a topline and bottom line standpoint. For some the pandemic was a boon, but for others it really hurt their overall sales.

In terms of PPC, what we have seen across many different client accounts is overall higher PPC spend and CPC costs have begin to creep up. This does make intuitive sense due to inflation. Most likely many industries have also been able to raise prices during this time for their products and services. As a result many businesses have increased margins and decided to raise bids in order to acquire more business. When many companies at the same time raise CPC bids, then the overall cost to acquire customers has also gone up.

For example, we have seen several clients with a cost of acquisition from a year ago compared to now increase by 10% to 50%. Unfortunately if all competitors bid higher, and also search volumes decline, there really isnt a good way around it. If we were to keep bids the same the amount of new customers that could be acquired would be severely limited. Agencies can only cautiously increase bids and limit the expense as much as possible.

Overall, we have been working with customers to fine tune their advertising, their landing pages, and keyword research to limit any damage. Unfortunately based on the current economic climate many industries have seen an increased CPC cost that will have to be passed through to customers.