Higher CPCs Could Affect Your ROI

Writing by Brick Marketing on Sunday, 22 of June , 2008 at 1:52 pm

Here’s an interesting chart showing the average CPC by vertical.

It’s interesting that the CPC for all of these industries is in an upward trend except for the automotive industry. I wonder if gas prices have affected this. If the automotive industry is declining because of lower auto sales and smaller vehicles selling more while larger vehicles selling less then that is very telling for the economy. But even more telling is the increase in every other industry.

The mortgage and auto finance industries have increased - tremendously. Dating, travel, and retail have only slightly increased. I believe these numbers may also reflect more competition as a whole in each of these industries. The travel industry has always been competitive, but fewer people are traveling these days since the cost of fuel is rising. That probably explains why the travel industries CPCs are not skyrocketing. On the other hand, to avert foreclosure, many homeowners are refinancing. That would equate to a huge increase in the competitive field of mortgage financing, driving CPC prices up.

When you plan your budgets for advertising and you are in an industry where CPC is going up, you need to account for that fact. As CPC goes up, you will get fewer clicks for the same number of dollars in your budget. Will that affect your conversion rate and ROI? You need to know.

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