Adwords CPC Tracking – Getting What You Expect?

One of the most important factors to consider when you are thinking of acquiring a domain name is the amount of ‘expected’ Adwords CPC (or other ad network CPC) that the keyword phrase is worth.

The reason for this is that it is a quick indicator of the potential for monetizing the domain in question.

This is all well and good of course but is there a difference between the ‘expected’ and ‘actual’ CPC that you’ll experience once in possession of the domain?

I decided to take a look at this and do some CPC tracking from the perspective of two things which I think may be affecting the ‘actual v expected’ CPC that I’m achieving –

• Content quality & quantity
• Competition for keyword phrase

Content quality & quantity

To analyse this factor I have compared 25 random single page parked domains (parked using my ‘DIY Domain Parking‘ template) against a handful of my minisites.

The content on my parked pages is pretty lightweight to be fair as it’s all about getting these up and running as fast as possible. On the other hand my minisites have content that is researched and useful with each having between 6-8 pages of unique 300+ word articles.

To do this analysis I first calculated averages for ‘expected’ and ‘actual’ CPC across all 25 domains and then divided one into the other to work out the percentage of ‘expected’ CPC that I am ‘actually’ getting. The same method was applied for my minisites. Hope that makes sense!

Here are the results for the two different groups of domains. The monetary CPC amounts are irrelevant here, it is the ‘% of Exp‘ CPC achieved that is the all important metric –

As you can see the CPC on my minisites is the clear winner, bringing in around 2/3 of the amount I was expecting. The CPC for my parked pages is much lower, coming in at around 1/3 of the amount. This is a pretty stark finding and goes to show that building out a site with some quality content is well worth the time investment.

Having looked into this for some other of my parked domains I found one example that really emphasises this finding – financial services niche, £15.89 expected, £0.75 actual, so only 5% of expected CPC! Whilst I knew this domain wasn’t pulling in a decent CPC I had no idea it was that bad.. this will definitely be one of the first domains that I add some more content to.

Competition for keyword phrase

Will the amount of competition for a domain name keyword phrase have any bearing on the CPC achieved?

Let’s find out..

To do this test I have used Market Samurai to quickly assess the current level of competition for some of my single page parked domains. I have then divided the domains into high, average and low competition groups (10 domains in each) and then assessed the CPC for each group.

Those of you who are familiar with Market Samurai will notice that I’ve grouped predominantly yellow/red domains as higher competition, a mixture of green/yellow/red as average competition and yellow/green as lower competition. This traffic light system in Market Samurai is simple to understand and allows for rapid visual assessment of domain names in terms of their keyword competition.

As you can see from the above table of results, my findings highlighted a clear and distinctive pattern when it comes to the levels of CPC achieved.

In a nutshell the results are as follows –

• Domains within higher competition niches are bringing in the least CPC as a percentage of that which I was expecting – staggeringly low at just 18%!

• Average competition levels for a keyword phrase = average CPC returns (46%).

• The lower competition domain names are achieving the highest CPC as a percentage of that expected – a pretty impressive 76%!

The reasons for the marked differences between higher and lower competition phrases could be down to a variety of reasons. However, I think it’s most likely that Adsense CPC gets diluted in line with the amount of competition that there is for a specific keyword phrase – my results certainly point to this. When you consider this alongside my findings with regards content quality/quantity you’d have to think that minisites and authority sites in the more competitive niches would lead to a rise in these low CPC levels.

Summary of this CPC tracking analysis..

Where possible, I like to leave you with a short and sweet assessment of my findings so here goes –

Developing out minisites in lower competition keyword phrase niches is your best bet for faster and stronger ROI.

Hope you found this post informative.

original image by hsingh