Cost vs. Quality: What Matters Most in Digital Advertising
Digital Marketing Metrics•
Paid social ads•
May 27, 2022
- Analytics •
- Brand Awareness •
- Conversion Rate •
- Digital Marketing Metrics •
- Google Ads •
- Marketing •
- Paid Search •
- Paid social ads •
- PPC •
- Site Optimization •
- Strategy •
Ana Gotter• May 27, 2022
Digital advertising is a pay-to-play game, and there’s a huge push to find the best results at the best price.
We all love a good deal, and the ability to generate a larger volume of leads at a low cost is insanely appealing.
But sometimes low cost doesn’t automatically mean better. There can be a tradeoff in cost and quality when it comes to pay-per-click ads, and if you’re not careful, you can end up with lower-performing ad campaigns and poorer long-term ROAS if you don’t strike the cost vs. quality balance properly.
The term “successful campaign” has a loose definition, after all, so in this post, we’re going to take a close look at the true balance of cost vs. quality and what matters most in digital marketing.
Why Brands Need to Consider Cost vs. Quality in Digital Advertising
When you’re looking at your Google Ad results (or your Facebook Ad results, for that matter), you’re going see a dashboard filled with different metrics like this:
You’ll see a number of clicks, impressions, conversions, and cost.
And while it’s easy to look at the lowest cost and want to throw more ad spend into that particular campaign, it’s never quite that simple.
Sometimes you can get an enormous amount of clicks at a low cost, which can be a sign of a successful campaign. Sometimes these campaigns will even yield plenty of conversions.
But in many cases, cost alone isn’t telling the full story, and it’s imperative to know how to balance and prioritize the cost and quality.
Why You May Need to Choose Between Cost & Quality
It’s common for many brands and even agencies to prioritize low costs when it comes to PPC ads. The appeal of a $1 click compared to a $3 click is hard to ignore.
Cost can sometimes be correlational with quality, however; in at least a solid number of cases, you can get what you pay for.
This is because not all clicks are equal. If you get a lot of clicks on a low-intent keyword or on keywords that are used by people who aren’t a segment of your target audience, you’re likely to get clicks but few conversions. It’s also possible that lower-quality clicks might convert, but only once, or that they’ll convert for a lower average order value than other higher-cost clicks.
There are multiple reasons why a low-cost click could also be a low-quality one. Let’s take a look at a few.
Example 1: Low Intent or Low-Value Keywords
Let’s look at an example. Dog trainers are paying as much as $4.11 per click for keywords like “dog training” and $4.95 for “dog training near me.” These are high-intent keywords that indicate they’re looking for a service.
At the bottom, you have “crate training,” which is only $1.45 per click. This is because if someone searches for “crate training” they’re almost certainly looking for quick tips; this is not something you need to take classes for or to work with a professional with. Users might click on your ad but would be extremely unlikely to buy anything, especially since there’s an abundance of free resources online.
Example 2: Poorly Aligned Search Intent
You might be able to place for a keyword, but that doesn’t mean your ad or product is actually answering the user’s search intent properly.
If someone types in the keyword “antique engagement ring,” based on my experience as a jewerly salesperson in a past life, I know that they’re looking for rings you can purchase in antique or pawn stores. They’ve already been worn and were created long enough ago to be considered antiques.
The search results for these terms, however, are for vintage-styled rings. These ads might get clicks, but for the audience who wants a 200-year-old ring for $200 instead of a custom one for $5,000, they’ll get no conversions. This can end up as wasted ad spend at a high volume even at a low cost.
Example 3: Low-Value Audiences
Certain long-term keywords may indicate not only intent but audience value. Someone searching for “affordable diamond rings” or “diamond rings sale” is almost definitely not going to be willing to spend as much as someone searching for “certified diamond ring” or “custom diamond ring.”
Keep in mind that you don’t just need to consider the initial conversion. You also want to track customer LTV to determine the following:
- How long are different audiences retaining?
- How often are they purchasing?
- How much are they spending when they purchase?
Some customers will purchase only once to take advantage of initial freebies or welcome discounts, and never purchase again. Make sure you’re factoring that into the equation and looking at long-term conversions. You can learn more about customer LTV here.
Can Cost & Quality Ever Go Hand-in-Hand?
I know that there are a handful of people out there reading all up in arms, knowing that sometimes cost and quality can go hand in hand.
That’s absolutely true.
This can happen in the following instances:
- You’ve found a high-value, low-volume keyword that either is exclusively valuable to you or that the market hasn’t caught up to yet
- You’re potentially running campaigns on your branded keywords, which are likely to be less competition and high clicks because of the intent
- You’ve got a solid quality score
That last one is particularly important. Your quality score on Google Ads (and your relevance score on Facebook) tells you how relevant your ad is to the audience who is seeing it.
It’s calculated by looking at multiple different ad factors, including the ad copy quality, keyword relevance, the landing page, and overall ad performance (particularly CTR).
If your quality score goes up, you can actually get more placements and more clicks at a lower CPA than if you have an average or poor quality score. If you have a poor quality score, your CPA goes up.
In this particular instance, good quality clicks at scale can also mean a decrease in your cost per click. Because of this, you could see some ads having lower costs but higher performance, meaning that you don’t have to make hard choices on what to prioritize.
How to Improve Your Google Ads Quality Score
Want to get more results at a lower cost? Who wouldn’t?
We’ve got a full guide about quality score here, but these are a few quick tips that will help:
- Try single keyword ad groups (SKAGs) or tight ad groups to increase ad relevance to the keywords you’re targeting
- Ensure that each ad sends users to a relevant landing page based on what the ad says
- Consider using features like dynamic keyword insertion or dynamic ads in order to potentially increase ad relevance
- Take advantage of Google’s Performance Max campaigns when applicable so you can leverage their machine learning and automatic optimization
Cost vs. Quality with PPC Ads: Which to Choose
Cost and quality— which should you prioritize when it comes to Google Ads?
Sometimes, you have to make a hard decision. We all need to pause campaigns, move funds around to allocate them to higher-value campaigns, and determine which campaigns to scale up or down.
While there is no one blanket correct answer for every circumstance out there, there are a few guidelines that can help you make the tough decisions.
Let’s take a look at when you should prioritize cost over quality for PPC ads, and when you shouldn’t.
When to Choose Cost
I know— it’s so tempting to want to scale up those low-cost campaigns, especially if they have solid CTRs behind them.
These campaigns only make sense to prioritize over quality campaigns when you’re getting almost duplicate results from two similar ads of different costs.
If you’ve got two similar ads driving extremely similar results quality-wise for similar keywords but one has a much lower cost, it makes sense to scale that one up.
And you don’t want to stop the other campaign if it’s targeting a different audience segment that you still want to reach.
This doesn’t mean you should stop running all of your low-cost campaigns. Sometimes keeping a few low-cost campaigns going even if they aren’t driving an overwhelming number of conversions is okay.
A good example of this would be branded keywords; paying a few dollars a month to keep other competitors from running ads with your brand name to try to snag some of your traffic could be well worth it.
When to Choose Quality
This is easy: In 99.9% of cases, you’re going to want to prioritize quality when it comes to your PPC ads, especially when you’re choosing when to scale your campaigns up and down.
Long-term, quality clicks are going to drive more repeat purchases at a higher average order value. It’s what’s going to help you see your LTV metrics skyrocket (or at least increase). Since PPC advertising can be a fairly significant investment, it’s crucial for you to get the most out of it possible.
This goes for retargeting campaigns, too; users are most likely to convert if they’re already familiar with your brand, so don’t skimp out on ad costs when it’s your chance to recapture an engaged audience.
And when it comes to return on ad spend (ROAS), the quality of the initial leads will beat out cost every time.
As a quick note- this does not mean that you should be spending more than you can afford to pay per click on average.
You can set a target CPA for your campaigns or maximum bids for certain campaign types to make sure that you’re not exceeding the limit where the campaigns would be profitable. But if you can afford spending $3 per click, go ahead and spend $2.99 instead of $1.25 if it gets you better results.
When it comes to the debate of PPC cost vs. quality and which to prioritize, our answer is clear. Quality will win out almost every time, but it never hurts if quality clicks come at a low cost!
As you’re creating your campaigns, we’ll leave you with these few final tips about how to manage the two:
- Always give your new campaigns a few weeks to balance out so you can see the cost and impact of each ad; sometimes it takes a week or so for Google’s machine learning and optimization to kick in
- Watch your campaigns closely; changes in the market, in consumer behavior, and even in keyword popularity can shift performance
- Find the balance that works for your brand; we said it before and we’ll say it again, there is no one blanket right answer so find what works for you
Need help optimizing your campaigns and finding the right balance in the debate of PPC cost vs. quality? Book your free audit with Disruptive Advertising today.