Jul 22, 2016 - 06:15 PM
Also note, the conversion rate of your website has a big impact on your conversion cost and therefore the cost of a click itself isn’t the only important factor.
For example if clicks cost $1 each and your website converts 10% of visitors then a conversion costs $10. But if your conversion rate is 1% then a conversion costs $100.
Aug 15, 2016 - 10:54 PM
1. The level of competition on the term (as mentioned in the answer above). - the more competitors bid on the keywords that trigger a particular term, the higher the bids and CPCs will go.
2. Your Ad Rank - Your Bid x Quality Score. If your quality score is low you will end up paying higher CPCs because it will require a higher bid to compete for the same ad position.
Since Google Search is the most competitive marketplace it has the highest overall click costs for a majority of keyword verticals. Bing holds a lower search market share and is not as popular amongst advertiser so CPCs on Bing are generally lower than on Google for the same keywords (might be the opposite in certain cases). The recently established Yahoo Gemini Search platform has even less active advertiser than Bing does and it's CPCs are much lower (but so is the search traffic). Keep in mind though that Google usually performs better than Bing and Yahoo from conversion rate standpoint.
If you optimize your campaigns well, you might be able to lower your overall CPCs on Search.