Keyword CPC up 50% compared to last year

[skuba]

Guys, I have been running report for some of the campaigns I manage. Most of them are in retail. And I have been seeing a 40% to 50% increase in CPC rates for the same time period last year. For example, March 09 compared to March 08.

It's not a matter of optimization, let me explain why. The conversion rate for all these campaigns are way up. The quality scores are up too.

So how come the CPC just keep going up?

Are you guys experiencing something similar?

Thanks

[avalon37]

Prices are definitely up.

[skuba]

How much higher are you observing?
Anybody else to chime in?

Thanks

[avalon37]

It's really hard for me to say because I switch match types and distribution partners all the time based on performance. But I am having to raise max cpc frequently to maintain desired positions. I feel confident in saying we are up 15% in the last month alone.

[martinibuster]

According to Google's recent financial report [marketwatch.com], Google reveals that their first quarter Cost Per Click is down 14% year over year, and down 6% in comparison with the previous quarter.

Average cost-per-click on Google web sites and our Google Network members' web sites decreased 14% from the three months ended March 31, 2008 to the three months ended March 31, 2009 and 6% from the three months ended December 31, 2008 to the three months ended March 31, 2009.

What you are experiencing may be either niche related or due to the aggressiveness of your bidding. Are any of you who are experiencing CPC increases by any chance fighting for the top three spots?

[skuba]

We are not fighting for top spots. We optimize for ROI.

Google's overall CPC might have decreased because there are more advertisers targeting new keywords, keywords with sometimes very little competition. So those have low CPC usually.

I doubt that for veteran adwords companies the CPC are going down.

[LucidSW]

7 clients I manage (or used too). I ran queries for the month of March and compared 2008 to 2009:

A client which I had started his campaign in February 2008. His CPC up 4.4%, position up by a full spot.

Another client's CPC is down from one year ago by 15 cents, 37%. His position slightly down as well by 0.6 positions. This was by design to get better ROI.

Third client also with lower CPC by four cents, about 17%, also by design, in March no less. Position is down by one spot. Conversions was off by 25% so I upped the CPC back to where it was.

A campaign which nobody managed at all in that period, so a good barometer: his CPC is down almost 25%, position slightly up by 0.3

New client just last month. I don't think he put much effort into his campaign, his CPC went up by less than a cent, less than 4%. Position also improved by a full spot.

The biggest campaign I actively manage in a fairly competitive field, their CPC virtually the same (down by a fifth of a cent) as is the position. Conversions up 50%.

Finally, another former client with a poor campaign for which I have data, his CPC also virtually unchanged, now has better positioning. He got rid of a lot of poor campaigns earlier this year. Conversions up by 65% but still poor.

So on the whole, I don't see CPCs going up, certainly not 40%. I also don't normally fight for top spots, optimizing for ROI.