Allowing for seasonal and economic forces, if either year-over-year or two consecutive month-over-month sets of PPC metrics are slipping, you’re facing increased competition. The most likely scenario here is that your competitors have increased their maximum bids and/or keyword quality scores, causing your ads to show up in lower positions. Lower positions = fewer impressions and lower CTR.

If your competitors are more sophisticated, they may have modified their Adwords strategy in order to decrease the overall quality of your clicks while only slightly affecting your PPC metrics. This type of competition usually goes unnoticed if you’re only focused on the metrics from warning sign #1 above.

While there are many factors that can affect the quality of sales leads, steady erosion of lead quality over time can be traced back to Paid Search competition. Usually coupled with dropping Paid Search conversion rate, lead quality erosion is caused by falling average position. Prospects that are serious about purchasing a product or service usually click on the top couple of paid search results. On the flip side, people who are not yet at a purchase decision point will often click on many more paid search ads to comparison shop.

So what can you do if your company is showing these warning signs?

Contact Venable.