A number of factors have contributed to rising prices for paid ad strategies. Marketers were recently forced to switch to Enhanced campaigns for Google AdWords, driving up the cost per click. However, there might be another key ingredient making sponsored practices more expensive – aggression. Researchers from the Ohio State University’s Fisher College of Business found that people tend to spend more when they are competitively bidding online.
If marketers find they spend too much on paid ad campaigns – due to rising costs or escalated bidding – they should step back and consider how organic content creation can keep budgets under control.
According to the research, study participants are more likely to bid when they perceived competitors were different from themselves. This could trigger marketers to view other companies bidding on similar keywords as rivals, pushing aggressive bidding tactics to new heights and driving investments higher.
“You need to be aware that, whether you mean to or not, you will naturally see other anonymous bidders as different from you. That will get the competitive juices flowing and you might end up paying more than you really want,” said Rebecca Walker Naylor, the study’s co-author and OSU Fisher College of Business assistant professor.
Rather than running into problems by exceeding their marketing budgets, brands can invest more resource in organic strategies that fuel the same results. Brafton recently reported that Google AdWords is rolling out new Quality Score reports that provide companies with more accurate data no how their PPC campaigns stack up against the search engine’s quality standards.
Ultimately, the brands producing the best web content will win priority positions in SERPs regardless of how much they spend in bidding wars for keywords. Those top performers will just have more money to put toward other campaigns that enhance their content marketing strategies.