I have been using Google Ads (previously Adwords) since 2005. A lot has changed in that in time. But it still remains basically an auction. You bid how much you are prepared to pay for a click when someone types a particular phrase into Google. Google then decides which ads to show based on bids and a variety of factors. It has always been a basic article of faith that (if you choose manual bidding) you are never charged more than the maximum cost per click you set. But this is no longer true. Check out this recent Google Ads report for my data transformation software, Easy Data Transform.
How can the average cost per click be 3x more than the maximum cost per click? I am using manual bidding, am not using ‘enhanced CPC’, have no positive bid adjustments and I haven’t recently changed these bids. I emailed Google technical support. This is the reply I got:
Post reviewing the search campaign : Easy Data Transform, I can see that you have applied Bidding strategy as Manual CPC, also you have included Google search partners due to which system has charged extra amount. As in Google search partners maximum capping would not work.
For example the keywords: [keyword redacted] in this the maximum cpc is set as while as you have included Google search partners due to which system has avg cpc charged £0.45.
‘Google search partners’ are “hundreds of non-Google websites, as well as YouTube and other Google sites”. New Adwords campaigns are opted in to search partners by default.
So I emailed back:
So when did this policy change?
Is there a limit what you can change for Search partners clicks? If I bid a Max CPC of £0.10 CPC can Adwords charge me £100.00, if it feels like it?
And the reply was:
Andy, I would like to inform you that there is no recent changes made in this policy. However, I would not be able to provide the exact date of change made in this policy. If you have applied the Max CPC of £0.10, system may charge you £100 if the search partner is enabled at your campaign level.
WHAT? They can ignore my maximum bid and charge me £100 per click (if I am using manual bidding, tracking conversions and opted in to search partners)! I don’t trust Google’s algorithms to bid for me based on prior experience. Presumably they can’t charge more than my daily budget, but they can use this whole budget in a single click, if they choose.
Running a report you can see that the average cost per click of the partner network (red) has shot up recently for my Easy Data Transform campaign:
Digging a bit more I found this.
So it looks like they quietly introduced this new policy in October 2018. I don’t remember being told about this. It doesn’t mention this policy if you hover over max CPC:
It is only if you click ‘Learn more’ and read to the bottom of that page that they tell you about the exception for network partners.
I checked with my goto Google Ads expert, Aaron of softwarepromotions.com. He knows Google Ads inside out, but he hadn’t heard of this policy either.
Google Ads have a long history of quietly introducing major changes and not telling their customers, let alone asking them to opt-in. For example with in-app ads.
This change is particularly galling given that clicks from the partner network are generally lower quality and convert significantly worse than clicks from Google itsself.
So far the costs to me of this change don’t appear to be significant. But they could be very significant to people with larger accounts. I did a quick surf and I found this on webmasterworld.com, dated March 2019:
Don’t have all the numbers yet but it looks like so far this month about 60% of our spend this month has been on these inflated clicks. And when I say inflated, on the extreme end we have a keyword set to $0.27 CPC and the average CPC has been $4.67, and almost all clicks for the keyword have been from the search partner network.
I have turned off the Google partner network on all my campaigns. You might want to do the same.
I had the same experience back in February I have since dropped off of all Google ads. Since my site is always pulling on page one, a fortunate thing for myself, I was able to do this without really losing any business that I could tell. The whole do no harm thing has long left the building
John, Good for you if you are appearing on page 1 for important terms. I doubt you are one page 1 or 2 for *all* important terms though.
But, if you stopped the campaign and didn’t notice any difference in sales, then you were probably right to pull it.
Thanks for the valuable information.
Quick question – is it worth to set MAX CPC as low as £0.15? Does it convert?
I believe the average CPC for software is around $2 or so.
You can get conversions at £0.15 CPC for ‘long tail’ keywords, particularly for more niche markets. But for mainstream keywords such as “CRM software” you will probably get 0 impressions for that sort of bid.
I gave up Google Adwords 6 years ago. It became completely useless for my business (software app for home users) and too expensive. Too many changes and the service becomes more useless with every year.
Now I use 2 strategies:
1. Word of mouth. Our product is well known in its small niche during many years and our customers recommend it to their friends.
2. I create many landpages for key phrases on my website and they work very well. For many keywords I have 2-7 position in Google. And completely for free, every day, without stupid requirements from Google. It just works.
Organic search traffic is better, if you can get it. I have tagetted lots of phrases with landing pages with my new Easy Data Transform product. But it is often a difficult and slow process, particularly if you aren’t targetting a small niche. I agree that Adwords clicks are now too expensive to be profitable for much B2C software.
Word of mouth is best of all, but you need exposure in the first place!
Also it isn’t either/or. You can try to get PPC, organic and word of mouth traffic. I have been resonably successful at all 3 with PerfectTablePlan. Although PPC has declined over time as Adwords got more and more expensive.
I would be interested to see one of your successful landing pages, if you feel like posting a link.