Optimise google ads: a quick guide

Article last updated October 2025.

Pay-per-click (PPC) advertising continues to be a crucial channel for businesses, but with CPC (cost-per-click) rising across most industries, attracting high-quality leads is increasingly expensive. According to Statista, the average monthly CPC in Google Ads search advertising for the insurance industry in the UK reached $6.94, making it the most expensive sector.

CPC inflation – the gradual increase in the cost of clicks over time – is driven by competition, limited ad space, and more sophisticated ad formats. While you cannot control inflation itself, optimising your campaigns ensures you get the most out of every pound spent. This guide provides actionable strategies to improve efficiency, reduce wasted spend, and maximise ROI.

1. Understand CPC Inflation

CPC inflation occurs when the cost of clicks rises despite other variables remaining constant. Essentially, advertisers must pay more per click to maintain their ad position or impression share.

Two major causes of CPC inflation:

• Competition: Google Ads operates as an auction. More bidders competing for the same keywords naturally drive up prices.
• Limited ad space: The top of the search page now features multiple ad extensions, images, and other SERP elements, reducing visible space for traditional ads.

Pro tip: Monitor CPC trends in your industry to anticipate budget adjustments and avoid overspending.

2. Use Ad Extensions

Ad extensions are a powerful way to increase your visibility, CTR, and ad relevance.

What are Google Ads extensions?

Google Ads extensions are basically what it says on the tin, they extend your ads and claim more real estate on search engine results pages (SERPs). They allow you to provide more information to a searcher and provide more impact on SERPs by being a larger size.

Key types of extensions include:

• Sitelinks: Direct users to specific landing pages like product pages, pricing, or contact forms.
• Callouts: Short messages highlighting key benefits such as “Free Delivery” or “24/7 Customer Support.”
• Location & Affiliate Location: Show your store location or nearby retailers that stock your products.
• Structured Snippets: Highlight product categories or service types for clarity.
• Price Extensions: Display pricing directly in the ad to pre-qualify users.
• Call Extensions: Encourage immediate calls from mobile users.

Why use them: Extensions can improve CTR, enhance lead quality, increase ad rank, and often lower CPC. Essentially, they make your ads more informative and clickable without increasing your base bid.

Pro tip: Use all relevant extensions for your business goals and test which combinations drive the most conversions.

3. Avoid Vanity Metrics

Metrics like impressions and clicks are easy to report but don’t always indicate business success. Focusing on vanity metrics can lead to misinformed decisions.

Instead, measure the following:

Cost Per Acquisition (CPA): Measures how much it costs to acquire a customer or lead. Formula:

CPA = Total Campaign Cost / Conversions
CPA allows you to analyse profitability and adjust budgets accordingly.

Lifetime Value (LTV): Tracks the revenue a customer generates over their relationship with your brand. Comparing LTV to CPA ensures campaigns are profitable and highlights opportunities for remarketing.

Pro tip: Combine CPA and LTV insights with Google Analytics data to understand how your highest-value users behave after clicking ads.

4. Improve Quality Score

Quality Score is Google’s rating of your ad relevance and landing page experience. Higher scores lead to better ad placements at lower CPC.

Ways to improve Quality Score:

• Keyword relevance: Ensure each ad addresses the search intent of the keywords in its ad group.
• Landing page optimisation: Fast-loading, mobile-friendly pages that match ad promises improve user experience.
• CTR enhancement: Use compelling headlines, numbers, and strong calls-to-action.

Pro tip: Regularly test ad copy and landing pages to refine relevance and engagement. Even small improvements can reduce CPC and increase impression share.

5. Target Demographics

Keywords are important, but reaching the right audience is equally critical. Google Ads allows demographic targeting by:

• Age, gender, and household income
• Geographic location
• In-market audiences (actively researching your product)
• Affinity audiences (long-term interests)
• Remarketing audiences (previous site visitors)

Layering demographic targeting with keywords reduces wasted spend and increases conversion likelihood.

Pro tip: Use overlapping demographic filters for high-value segments – for instance, high-income users who are actively in-market for your product.

6. Optimise Keywords

Keywords remain the backbone of any Google Ads campaign. Optimising your keyword strategy involves:

• Long-tail keywords: These are longer, more specific phrases (3–5 words) that usually have higher conversion intent and lower competition.
• Search Terms Report: Run broad match keywords and review the search terms that trigger your ads. This helps identify new opportunities and negative keywords to prevent wasted spend.
• Relevance over volume: Targeting fewer, highly relevant keywords often leads to higher-quality leads than chasing high-volume, generic terms.

Pro tip: Continuously refine your keyword lists based on performance and evolving user search behaviour.

7. Leverage AI and Automation

Artificial intelligence can dramatically improve efficiency and ROI in Google Ads. Key applications include:

• Adjusting bids autonomously: AI can optimise bids in real time to maximise conversions and control CPC.
• Pausing underperforming ads: Automated rules stop ads with poor ROI, reducing wasted spend.
• Predicting consumer behaviour: Machine learning analyses historical data to predict which search queries are likely to convert, allowing smarter targeting and bidding.

Pro tip: Use AI-driven bidding strategies like Target CPA or Maximise Conversions to get the most value from your campaigns.

8. Analyse Using Google Analytics

Integrating Google Ads with Google Analytics gives a deeper view of post-click user behaviour. Key metrics include:

• Bounce rate and session duration
• Pages per session and navigation paths
• Assisted conversions from multiple touchpoints
• This helps identify weak points in your funnel and areas for optimisation.

Pro tip: Set up Goals and Events to track actions like form completions or purchases, tying them back to campaigns, keywords, and ad groups.

9. Structure Your Campaign

Campaign structure can make or break performance. Best practices include:

• Group ads by theme or intent (e.g. branded keywords vs product categories).
• Keep ad groups tightly focused with a small set of highly relevant keywords.
• Direct each ad group to dedicated, conversion-optimised landing pages.

A clear structure makes reporting and optimisation easier, allowing you to identify top-performing campaigns and adjust budgets accordingly.

Pro tip: Use consistent naming conventions and labels to make campaign management and performance analysis more efficient.

10. Monitor and Optimise CPC

CPC inflation is ongoing, but careful monitoring allows you to control costs:

• Track CPC trends: Identify which keywords or campaigns are becoming more expensive.
• Adjust bids strategically: Increase bids for high-value traffic and lower them for underperformers.
• Combine automation and manual checks: Use automated bidding for efficiency, but regularly review performance to catch anomalies.

Pro tip: Set alerts in Google Ads for sudden CPC spikes to avoid overspending.

Final Thoughts

Paid search remains one of the most effective marketing channels, accounting for 28% of global ad spend. Yet with CPC inflation and competition rising, optimising Google Ads is essential to maximise ROI.

Focus on:

• Using ad extensions to improve CTR and ad rank
• Avoiding vanity metrics and tracking CPA/LTV
• Improving Quality Score and relevance
• Targeting the right demographics and optimising keywords
• Leveraging AI and automation
• Structuring campaigns for clarity
• Monitoring CPC trends

By implementing these strategies, you can reduce wasted spend, improve lead quality, and ensure every click brings real business value.

Pro tip: Pair these tactics with remarketing campaigns and data-driven bid adjustments for even higher ROI.

Optimising Google Ads requires a combination of smart strategy, careful monitoring, and ongoing testing. By applying the tactics outlined above — from using ad extensions and targeting the right audience to leveraging AI and monitoring CPC — you can make the most of your budget and drive higher-quality leads.

To find out more about Google Ads optimisation and how to maximise your paid search ROI, get in touch with our team today.