Dramatic Drop in CPA, Increase in CPC's August/September 2023

[codyecp]

I'm wondering if this has already been talked about extensively, and if it has, please feel free to direct me to the appropriate places for discussion.

We have noticed a drastic drop in performance across all of our Google Ads accounts for local businesses that started in August and especially September 2023.

A little background: I am an agency owner and we work with 50+ local businesses throughout the US. We've noticed a drastic decline in Google Ads performance over the past 30-60 days. Increase in CPA's, sometimes as much as 100% for the same (main) target KW's. CPA's have probably risen 30-40% on average across this time period. We haven't made any drastic changes to the accounts, and primarily run Manual CPC with the occasional Max Clicks / Max Conversion strategy sprinkled in. We've upgraded to GA4 prior to the changeover and updated Conversions across channels to match. In other words, we've properly updated, prepared and been ready for change prior to actual data changes. We also utilize ClickCease for (hopeful) click fraud prevention.

At first I thought an influx of advertisers into the space spiked an increase in CPC's, but ALL Google accounts across the US have had the same declines...

Then... I thought we may have muffed the UA to GA4 conversion updates. All seem to be working properly, but I have noticed GA4 "Unassigned" conversions increase.. (not sure what that's about). However, we're using CallRail for call reporting so it's easier to check the call logs. Call logs across the board tell the story of a dramatic drop.

I also checked 2022 data to see if seasonality could play a role in our vertical, but 2022 #'s were solid for August/September.

I have noticed an uptick in super irrelevant KW's showing for phrase match searches that didn't before.

Worth noting *We've preferred to run Manual CPC strategies as we can better control lead quality via only running on small groups of main target KW's. Smart bidding has produced great CPA's in the past, only to come to find out the lead quality was REALLY BAD.

Has anyone else noticed a drop in Google Ads for local businesses? Has anyone found any correlation from UA to GA4 update causing declines? Is Google's shift into Smart Bidding the official end to Manual CPC strategies? How are other people building quality audiences for lead capture if running Smart Bidding strategies?

Curious what people are seeing...

 

[Chris Barnard]

Definitely noticed a drop across many accounts, since Aug - LSA volatility included. No correlation with GA4 update, since like you say we can also back up the attribution with call data, and the conversions would still show up in Ads or on the client side.

"I have noticed an uptick in super irrelevant KW's showing for phrase match searches that didn't before."

Same, and yeah, it does seem like any match type is pretty much gone, we've definitely noticed many totally irrelevant terms thrown in there.

Aside from the same best practices, just trying to weather the storm. Empirically, it seems these performance drops are related to the broad algo/core updates in the past few months, but that's just guesswork.

Super-frustrating for sure. Feelin your pain.

 

[codyecp]

Super frustrating...

Out of curiosity have you been running many Smart Bidding campaigns? If so, how have they performed? Or were you noticing this more for Manual?

I always thought Google Ads fundamentals were based on competition and in being competitive with your own campaign efforts. However, it seems with the fundamental shift towards "AI" and smart bidding goes against those very principles. Google is now giving a clear path towards a less transparent model (Smart Bidding) and leaving the scraps for us traditionalist dinosaurs. Forcing everyone to fork over more money for lower quality campaigns with less transparency / control.

I'm just hoping after this earnings period there will be some rollback/tweaks to Google Ads...

 

[Chris Barnard]

Most definitely on the smart bidding - CPCs, cost/conv up, and conversions down - for a while now, like several months. Yeah, that manual sentiment is certainly shared industry-wide from what I've been seeing.

I see no rollback from earnings calls (but what do I know), perhaps slight changes as a result of legal slaps? Again, just guesswork...wish in one hand...