Hi there,
Thanks for reaching out. I had a look at your situation and it sounds like a classic case of taking back control from an agency that wasn't delivering. It's good on you for diving in yourselves, and it's great to hear you're already seeing improvements. That's a massive first step.
You asked about your CPCs being higher than the max bid you've set. This is a really common point of confusion with Google Ads, and tbh, it's not explained very well by Google themselves. There's a few reasons this could be happening, and it's not always a bad thing, but you definately need to understand what's going on to make sure you're not just wasting money again. I'm happy to give you some initial thoughts and guidance on what to look for.
I'd say you need to check your bidding strategy first...
This is the most likely culprit. When you set a bid, you're telling Google what you're *willing* to pay, but the final price is decided in a live auction for every single search. Your bidding strategy tells Google how much leeway it has in that auction.
You're probably using a setting called 'Enhanced CPC' (eCPC). It's often enabled by default on Manual CPC campaigns. The idea behind it is to let Google's algorithm increase your bid if it thinks a particular click is more likely to lead to a conversion. So, if it sees a user who's search history and behaviour looks like someone who has converted before, it might decide to bid €24 for that click, even if your max bid is €12, because it's confident it'll pay off. In theory, it should also lower your bid for less promising clicks to balance it all out over time.
Is this a bad thing? Not necessarily. If those more expensive clicks are genuinely turning into valuable leads for you, then it's working as intended. The problem is, you need to have rock-solid conversion tracking in place to know for sure. If your tracking is off, or you dont have any, then Google is just guessing in the dark, and you're footing the bill. You can check if eCPC is on in your campaign settings. If you want absolute control, you can turn it off. Your CPC will then never go above your max bid (unless you have some bid adjustments, but we'll get to that).
The other possibility is that you're not on Manual CPC at all, but an automated strategy like 'Maximise Clicks' or 'Maximise Conversions'. With these, you're essentially handing the keys over to Google. You might set a 'target' CPA or a 'max' CPC bid as a guideline, but the system's main goal is to get as many clicks or conversions as possible within your budget, and it will bid whatever it deems necessary to achieve that. For someone just taking over an account, I'd probably recomend sticking to Manual CPC (maybe with eCPC off to start) until you get a better feel for things.
We'll need to look at your Quality Score...
This is the other massive piece of the puzzle that dictates what you actually pay. Quality Score (QS) is Google’s rating, from 1 to 10, of the quality and relevance of your keywords and ads. It's a huge factor in your ad rank and how much you pay per click. A low QS is like trying to run a race with your shoe laces tied together – you have to work much harder (and pay much more) to get anywhere.
Your Ad Rank, which determines your position on the page, isn't just your bid. The basic formula is:
Ad Rank = Your Max CPC Bid x Your Quality Score
This means someone with a lower bid but a higher QS can actually rank above you. More importantly, it directly affects your actual cost. The price you pay is calculated to be just enough to beat the Ad Rank of the competitor directly below you. The simplified formula looks something like this:
Your Actual CPC = (Ad Rank of the advertiser below you / Your Quality Score) + €0.01
Let's look at a quick example. Say you and a competitor are bidding on the same keyword.
| Advertiser | Max CPC Bid | Quality Score | Ad Rank (Bid x QS) | Actual CPC |
|---|---|---|---|---|
| You | €12 | 4/10 (Poor) | 48 | €10.01 |
| Competitor A | €10 | 10/10 (Excellent) | 100 | €4.81 |
In this scenario, your competitor gets a higher position for less than half of what you bid, because their Quality Score is so much better. Your own actual CPC is driven up because your poor QS means you have to pay more to beat the person below you (who isn't even shown here). Improving your QS from a 4 to, say, an 8 would dramatically lower your costs across the board. To improve it, you need to focus on three things: the relevance of your ad copy to the keyword, your expected click-through rate (CTR), and the user experience on your landing page. Make sure the journey from keyword to ad to landing page is as smooth and relevant as possible.
You probably should look at your keyword targeting...
This links directly to Quality Score and your overall costs. The previous agency might of been using lazy keyword strategies. The biggest mistake I see is an over-reliance on 'Broad Match' keywords. It sounds great in theory - you give Google a keyword and it shows your ad for all sorts of related searches. In practice, it often means you're paying for completely irrelevent, dodgy clicks that will never convert.
You need to be using Phrase Match and Exact Match. Here’s a quick breakdown:
- Broad Match:
electrician services-> could show for "how to become an electrician", "low voltage technician salary", "plumber near me". A total waste of money. - Phrase Match:
"electrician services"-> shows for searches that include the meaning of your phrase, like "emergency electrician services" or "local electrician services cost". Much more controlled. - Exact Match:
[electrician services]-> only shows for searches with the exact same meaning, like "electrician services" or "services for electricians". This gives you the most control.
I remember working with a software company that was acquiring users at a cost of £100 per user acquisition (CPA). By switching to a tight structure of Phrase and Exact match keywords, we managed to reduce their CPA to £7. It's a bit more work to set up, but it's always worth it. Go into your 'Search terms' report in Google Ads right now. This shows you exactly what people typed before they clicked your ad. I bet you'll find some absolute shockers in there. Add all the irrelevant ones as 'Negative Keywords' immediately. This tells Google never to show your ad for that search again. It’s like basic account hygeine.
You'll need a solid structure and tracking...
For any of this to work, your account needs to be built on a solid foundation. This means having a logical campaign and ad group structure. Don't just chuck all your keywords into one ad group. Group them into tight themes. For example, have one ad group for 'emergency electrical repairs' and another for 'new home wiring'. This lets you write super-specific ad copy for each theme, which boosts your ad relevance, your CTR, and ultimately your Quality Score. Better QS means lower CPCs.
And as I mentioned before, none of this matters without proper conversion tracking. You need to know which keywords, which ads, and which campaigns are actually generating the leads. Without that data, you're just flying blind. Make sure you have conversion tracking set up to record every form submission or phone call from your website. Once you have that data, you can make informed decisions. You can confidently pause keywords that are spending money but not delivering, and you can put more budget behind the ones that are. You can also make a proper judgement on whether eCPC is actually helping or hindering your efforts.
It's a lot to take in, I know, especially when you're trying to clean up someone else's mess. But focusing on these core areas will make the biggest difference and give you back control of your spending.
I've detailed my main recommendations for you below:
| Area to Check | Actionable Advice |
|---|---|
| Bidding Strategy | Check your campaign settings. If 'Enhanced CPC' is on, understand it can bid above your max. Consider turning it off for a short period to regain full control and establish a baseline CPC. Avoid 'Maximise Clicks' until you have more data. |
| Quality Score | Check the QS for your main keywords. If they're below 7/10, work on improving them. Ensure your ad copy is highly relevant to your keywords and that your landing page provides a great, relevant experience for the user. |
| Keyword Match Types | Review your keywords. Pause any broad match keywords that are spending significant budget. Rebuild using more controlled Phrase and Exact match keywords. This will improve traffic quality and lower wasted spend. |
| Search Terms Report | Regularly review the 'Search terms' report. Aggressively add any irrelevant search queries to your Negative Keywords list. This is one of the quickest ways to stop wasting money. |
| Conversion Tracking | Double, triple check that your conversion tracking is working perfectly. Without accurate data on which clicks are turning into leads, you cannot optimise effectively. This is non-negotiable. |
Getting this right can be a bit of a faff, and it takes time and experience to really get the best out of a Google Ads account. After a bad experience with an agency, it's understandable to be cautious. However, working with a specialist who can guide you through this process can save you a lot of time and costly mistakes, ensuring your budget is invested as efficiently as possible from day one.
If you feel you might need a hand with this, we offer a free, no-obligation initial consultation where we can have a proper look through your account with you on a call and give you some more specific, tailored advice. Just let me know if that's something you'd be interested in.
Hope this helps!
Regards,
Team @ Lukas Holschuh
