What Happens When the Cost Per Lead Starts to Go Up in a Google Ads Campaign?

Short Answer: When the cost per lead begins to increase in your Google Ads campaign, it can indicate that Google is optimizing to maximize its revenue. If your campaign’s conversion rate and cost per lead metrics were ideal at a lower budget level, such as $800 a day, the recommended action is to duplicate the existing ad group to target another service.

Full Explanation

As you increase your ad spend in a Google Ads campaign, the cost per lead may start to rise. This phenomenon often happens because Google adjusts its delivery tactics to maximize revenue based on the budget you’re allocating. When your campaign is optimized well at a lower daily budget, the system starts pushing to spend more, which can lead to higher costs for generating each lead.

It’s important to recognize this behavior because the cost per lead is no longer remaining at the initial lower, more profitable level when spending increases. This means the campaign is reaching audiences or contexts that are less efficient or more competitive.

Step-by-Step Breakdown

Monitor your campaign’s cost per lead consistently, paying attention to when it starts to rise.
Evaluate your conversion rate and cost per lead at your current budget to ensure they are optimized.
If the cost per lead increases as you scale the budget, understand this correlates with Google maximizing revenue on your spend.
Instead of increasing the budget within the same ad group, duplicate the successful ad group to create a new one targeting a different service.
Managing multiple ad groups for different services helps maintain efficiency and control over costs.

Real Examples

Suppose your Google Ads campaign runs at $800 per day, and during that time, the cost per lead and conversion rate are optimal. As you try to push your budget higher, you notice the cost per lead climbs. In this case, you would take the existing high-performing ad group and duplicate it to promote another service you offer. This method allows you to tap into new potential customers without the cost per lead escalating for a single target.

Common Mistakes

Continuing to increase the budget on a single ad group without monitoring the cost per lead.
Ignoring signs that cost per lead is rising and assuming the campaign is still efficient.
Failing to duplicate ad groups for different services, which can limit your campaign’s scalability and efficiency.
Neglecting the relationship between budget levels, conversion rates, and cost per lead metrics.

FAQs

Why does the cost per lead go up when I increase my budget?: Because Google adjusts the delivery of your ads to maximize revenue, which often results in bidding against more competitive placements and audiences that cost more.
What should I do if my cost per lead is increasing?: If conversion rates and cost per lead metrics were ideal at a lower budget, consider duplicating your existing ad group for another service instead of just increasing spend.
Is duplicating ad groups effective?: Yes, duplicating ad groups targeting different services can help control rising costs and expand your reach efficiently.

Key Takeaways

Increasing budgets can cause cost per lead to rise as Google tries to maximize revenue.
Monitoring your conversion rate and cost per lead at different budget levels is essential.
When cost per lead rises, duplicating ad groups for new services is a strategic response.
Maintaining multiple ad groups helps manage costs and maintain campaign efficiency.