How to Manage Marketing Efforts in the Face of CPC Inflation
In today’s world of digital advertising, one of the biggest challenges that advertisers face is the rising cost of clicks. Known as CPC inflation (cost per click), this trend can be attributed to a number of factors, including increased competition, changes in market conditions, and bidding strategies. According to Statista, the average CPC cost worldwide was $0.52 at the beginning of 2021 compared to $0.62 at the beginning of 2022, indicating a steady increase in the price of CPC in just a span of one year.
Understanding CPC Inflation
There are a number of different factors that can contribute to CPC inflation. Here are a few of the most common:
Competition
Changes in market conditions
Bidding strategies
As the CPC rate increases, the cost of acquiring each customer or conversion can also increase, which may reduce the return on investment (ROI) of advertising campaigns. Additionally, higher CPC trends can limit the reach of advertising campaigns, particularly for smaller businesses with limited budgets. As a result, businesses may need to reduce their ad frequency or target narrower audiences, potentially reducing the effectiveness of marketing campaigns.
Further increase in the price of CPC can create a barrier to entry for businesses that are just starting out or have limited budgets, making it difficult to compete with larger and more established businesses.
Exploring Other Channels to Manage Rising CPC Rate
By diversifying your advertising strategy and leveraging other channels, you can still maximise your ROI and minimise the impact of CPC inflation in your business.
Affiliate Partnerships
Affiliate partnerships are a type of marketing agreement between two businesses in which one business – the affiliate, promotes the products or services of the other business – the advertiser. In return, the affiliate earns a commission for each sale or conversion that results from their promotional efforts.
Rather than competing for ad space or bidding on keywords, affiliate marketing partners can use their own promotional channels, such as email lists, social media accounts, or blogs, to drive traffic to your website. This can be a more cost-effective approach to advertising than traditional pay per click marketing since you only pay for conversions or sales, rather than each click.
According to Forbes, businesses spending on affiliate partnerships was projected to grow to $6.8 billion in 2020 and $8.2 billion by 2022. Additionally, a study from PwC and the Performance Marketing Association found that affiliate partnerships deliver a return of up to 12 times the advertising investment.
Affiliate partner marketing can provide access to new audiences that may be difficult or expensive to reach through traditional advertising. By partnering with businesses that have a similar target audience, you can expand your reach and improve your chances of converting leads into customers.
To leverage this strategy effectively, you need to find affiliate marketing partners that have a relevant audience and create an attractive offer that incentivizes them to promote your products or services. This can include offering a competitive commission rate, providing exclusive discounts or deals for their audience, or creating custom promotional materials that align with their brand.
By building strong partnerships and offering attractive incentives, you can diversify your marketing efforts and leverage new audiences.
Native Advertising
Native advertising is a form of advertising that is designed to blend seamlessly into the user experience of the platform on which it appears. It is often referred to as sponsored content and is used to promote products or services in a way that feels natural and unobtrusive to the user.
According to a survey conducted by Sharethrough and IPG Media Lab, native ads generate 18% more purchase intent than traditional banner ads. Additionally, consumers are 25% more likely to look at native ad formats than banner ads, and they view native ads 53% more frequently, as well.
In terms of cost, native digital advertising can be a cost-effective way to beat the CPC inflation since it is often priced on a flat fee basis rather than by the click. Additionally, since native display ads are designed to blend in with the platform on which it appears, you may not need to bid as aggressively for ad space, reducing overall advertising costs.
It is important to create content that resonates well with your target audience and blends seamlessly with the platform's user experience. Additionally, partnering with relevant publishers or platforms such as Outbrain, Taboola, and Nativo can enhance the impact of your native ad campaigns and ensure that your content reaches the right audience.
Content Marketing
Content marketing is a powerful tool for you to establish your business as a leader in the industry, build trust and credibility with your target audience, and ultimately drive profitable customer action. Not only is it effective, but it is also a cost-efficient method of marketing. In fact, according to a study, online content marketing costs 62% less than outbound marketing and generates more than three times as many leads.
By creating content that is informative, educational, and entertaining, businesses can attract and engage their target audience. This content marketing strategy can lead to increased loyalty and advocacy, as consumers are more likely to trust and do business with companies that provide value beyond just promoting their products or services.
The goal of a content marketing campaign is to drive profitable customer action, such as increasing sales or improving brand loyalty, without directly promoting a product or service. By providing valuable and relevant content, you can position your business an expert, and in turn, attract and retain more customers.
Email Marketing Campaigns (EDM)
Email marketing can be a highly effective tool for reaching existing customers and prospects, and driving conversions without relying on CPC advertising. With an email marketing campaign, you can segment your audience based on demographics, interests, and past purchase behaviour, allowing you to tailor your messaging to each specific group. This targeted approach can lead to higher open and click-through rates, as well as increased conversions.
According to a study by Litmus, an email marketing strategy has an average ROI of 3600%, meaning for every $1 spent, businesses can expect a return of $36.
Email promotions and campaigns can also be a valuable tool for building and maintaining relationships with customers. By regularly sending relevant and valuable content, you can stay top-of-mind with your audience and foster loyalty. This can lead to repeat business, positive reviews and referrals, and an overall increase in customer lifetime value.
To effectively reach your customers through email marketing, ensure that your email designs are mobile-friendly. According to Statista, 46% of email opens occur on mobile devices (2021). This means that businesses must ensure that each email campaign is optimised for smaller screens and load quickly on mobile devices. Mobile-friendly emails can also enhance customer experience, making it easier for customers to engage with the brand and receive important information on the go.
Don't let CPC inflation hurt your business's profitability. With the right strategies, you can effectively manage your CPC costs and maximise your returns on digital advertising.
Quokka Media is here to help. Contact us today to learn how we can assist you in navigating the ever-evolving digital advertising landscape. Let's work together to drive your business's success!