I have an idea that I want to try and validate via a landing page and Google adwords. The plan is to try and get 100 visitors a day for a few weeks and measure conversions. Pretty standard stuff.
The problem is that it seems that every keyword in my niche is at least $5 or more a click. These are mostly long tail keywords that are extremely targeted.
My question is what am I doing wrong? Is the high cost of CPC indicative of a too competitive market? Or is there some way that I can drive down the CPC? Perhaps I'm being too specific in my keywords and need to target more popular keywords?
What am I doing wrong?
I've seen attorney, insurance and some technical services over $50 per click. If you want to test your idea in a competitive market the best thing you can do is try and spend your money wisely. Do this by being picky on keywords, doing A/B split testing, limit/tailor your ads geographically.
Optimizing adwords is a complicated topic, but something to keep in mind is that Google doesn't just display ads that bid the most. If you are paying CPC then Google only makes money if people actually click the ad. It does no good for them to show an ad that bids $10 if it never gets clicked, they make a lot more money with a $1 ad that gets clicked thousands of times a day.
With that in mind, you don't necessarily have to outbid your competitors, what you need to do is get a good quality score for your ads and get a good click through rate.
The way to achieve this is by having different ads for different keywords you are targetting. That way you can incorporate the keywords in each ad. Google will assume your ad is appropriate because it contains the keywords and you will also get better click through rates as your ad will appear to meet what the person searching is looking for.
Like I said, Google Adwords optimization is a very big topic and I am by no means an expert. So the above information should be taken as a general concept and I would recommend researching the points further.