Columnist Larry Kim shares insights gleaned from WordStream’s research on global CPCs and explains how you can use this data to power your international search advertising.
In my last column, I looked at research that showed what people Google most often around the world. Today, I’m happy to share new WordStream research illustrating the average costs per click across industries for countries around the globe. (Disclosure: I’m founder of WordStream.)
More than a curiosity, there are great insights to be gained here. Our data scientist, Mark Irvine, analyzed more than 15,000 high-volume English search keywords across more than 20 different industries to determine the average cost per click (CPC) for each country. He then ran his list through Google’s Keyword Planner to get the average CPC estimates for each keyword in each country.
To complete his analysis, he indexed his findings and compared each country’s estimated CPC against the estimated CPC in the US for that keyword term.
I have a few tips for you to help drive smarter international SEM, but first, let’s have a look at what Mark found.
Only One Country Had A Higher CPC Than The United States
Bad news for US search marketers: You’re paying very near the top price for clicks, on average, by advertising in the United States. Only the United Arab Emirates averages higher CPCs than in the US, by 8%.
After those top two most expensive markets, the next ten highest CPCs (expressed as percentages less than the US average) are as follows:
- Austria: -2%
- Australia: -5%
- Brazil: -11%
- United Kingdom: -13%
- New Zealand: -14%
- Chile: -16%
- Switzerland: -21%
- Italy: -25%
- Canada: -29%
- Germany: -31%
Local Search Engines Can Affect Google CPCs
If you have a look at the bottom countries in the full rankings Mark shared, you’ll notice that there are many countries in Eastern Europe and Russia with super-low CPCs. This may be partly explained by the presence of search engines like Yandex, which dominates search market share in Russia.
As you’re reviewing this data and considering entering new markets, keep in mind that you should first understand which properties your users frequent online in that geographic region.
Three Tips for Smarter Targeting in International Markets
The good news, of course, is that doing business in one of the highest CPC markets in the world means you might be surprised by the opportunities you have elsewhere. Here are three tips to help you target smarter with PPC in various countries:
1. Remember To Use Geo-Bid Modifiers
I’m always surprised to audit PPC campaigns targeting different countries that don’t leverage geo-bid modifiers.
Geographical bid modifiers allow you to adjust your bids up or down by percentages of the base bid, based on the different cities, regions or countries you’re targeting. Now, it’s pretty confusing to know what your initial bids should be. That first bid is really just a shot in the dark, so you can use our average CPC data above as a jumping-off point.
For example, if you’re targeting searchers in the United Kingdom, and you can see that the average UK CPC is 13% lower than the US CPC, you can set your geo-bid modifier to -13%. This tells AdWords to lower your bids in the UK by 13%.
Of course, you’ll want to monitor your performance closely and adjust over time, but this can help you get started.
2. Use The Dimensions Tab In AdWords To View Performance By Country
Once you’ve set up your initial geo-bid modifiers, you can examine the performance of your campaigns based on geographic segmentations in the Dimensions tab.
Go to Dimensions > View: Geographic to view all campaign metrics based on geography. Notice how the CPC and CPA vary greatly depending on the country being targeted. Leverage this information to further refine your geographic bidding strategy.
3. Reconsider Your Markets
Your analysis of which countries to focus on might warrant reconsideration with this new CPC data. You might have assumed that Eastern Europe, for example, just isn’t a good fit for your products, because your profit margins are, say, three times lower there. However, if you can manage a CPA five times lower than your US acquisition cost, it could be worth it for you to expand into that market.
Averages are just that — the average, not a definitive guide to what you should be paying in these different countries. However, I hope they serve as a logical starting point for your international bids and that perhaps you’ll be inspired to experiment in new countries, now that you know how much cheaper it may be to advertise there.