Now, I am not one to spread vicious rumors (though I do like to hear one every once in a while), but what is up with the search engines’ sporadic and unexplainable fluctuations in CPCs? MSN and Yahoo! seem to be bigger offenders of this than Google, but Google is not innocent of this yet. They just put a great PR spin on it calling it Real Time Quality Score. I am just going to state it — I feel that the search engines are doing these increases because they can.

A very specific example that I have of this is one of my clients saw a 100% increase in their CPC for their brand term in MSN over just one week. We probed MSN to see what the possible reasons could be for this huge increase in one week – their answer was “could be competition.” My first problem with this answer is the could part. Don’t they have a better understanding than could? My second issue with this answer is the competition part. I went online and checked who the competition was, and to my surprise, there was none. I hit the refresh button; again, no competition.

The above is just one example of the increase of CPCs in MSN without a solid explanation. I have seen through another one of my clients our branded CPC has increased from the $1.00 range well into the $3.00 range in a very short period of time, without any obvious changes in the SERP environment.

Yahoo! is not immune to this problem either. They actually had started to show large increases in CPCs about 3 or 4 months ago with no explanation. I have my own explanation – Jerry needs to hit quarterly expectations… I know I said it, it is out there.

Google has increased the CPCs the best so far, and I am not going to go into detail about their Real Time Quality Score. Please read Erika Moersch’s “Google’s Real Time Quality Score Changes Your Query Results” post for more on how this changes the current landscape. I have noticed CPCs go up for a majority of my clients all for the benefit of user experience.

Now when I stated that there is a CPC conspiracy happening, I say it half-jokingly. I am not completely sure that I believe it, but without a tangible explanation for these dramatic CPC increases, I have no option but to entertain the notion. We as an industry need to have a better understanding, and I put this onus on the engines, on what is effecting the CPC fluctuations. We all are or will have to answer the client when they ask why are my CPCs fluctuating so drastically. Right now I don’t believe I have a strong belief in why this is happening and the engines up to this point have not given me a tangible answer. I know from experience that there are many factors that change the CPCs, but none of them seem to be in play of late.

I would be very interested in what your thoughts and experiences are, and hopefully this opens a can of worms. The truth is out there…

(Image credit: Artist: Chris Madden. Thanks to http://flinchbot.files.wordpress.com/2008/04/conspiracy-theory.gif for the image.)