How to run effective CPC campaign when competition is high
Source: SEO podcast, episode #224.
Track conversions for your CPC keywords. Make sure Google Analytics is synced with AdWords. Setup ecommerce tracking on Google analytics to see how much money is generated from specific keywords and where they came from.
Be careful with default 'broad matching' option. Your Ad may show when search term contains variations of your keywords. For example "women's hats" may show for "buy ladies hats". Consider using 'Phrase match' and 'Exact match' options for expensive keyphrases.
Consider turning off close variations. Otherwise you will pay for different variations of your keywords that you can't control. Close variations are plurals, misspellings and other related words.
Have robust negative keyword list. Look at keyword details on your CPC campaign to see keywords that you are getting clicks for. You probably don't want to pay for words like 'free', 'how to', 'jobs' or 'diy'.
Add brand names to get more targeted customers. For example, try using 'Lego toys' instead of 'toys'. You will get people who already know the brand they want. Such visitors are more likely to convert.
Pay more for mobile
Increase your bid for mobile if you want more mobile traffic. Make sure your site is optimised for that.
Bring back your customers through remarketing. It will allow you to show Ads to people who already visited your site. Remarketing Ads can be much cheaper than keywords.
Use managed placements if you want to show your Ads on certain sites where you think your customers may spend time.
Bid higher on keywords that show intent. Examples: 'buy dining table' or 'kitchen renovation quote'.
Relevant landing pages
Use custom landing pages for your Ad. Ideally, your landing page and your Ad should have identical text.
Expand in other advertising channels that have your target clients: Bing, Facebook, LinkedIn etc.