Building a commanding online presence organically takes time and effort. Careful content planning, technical optimization, on- and off-page optimization, thoughtful design, URL tweaking, and building links for months — just to find out that Google rolled out another update that requires an overhaul on your end.
Paid advertising on Google provides a "shortcut" to results. Of course, there are caveats, but simply put, if you know what you’re doing, running ads on the biggest search engine can be highly profitable. But how to avoid draining your wallet? How much do Google Ads cost, and how can you squeeze the best ROI out of your efforts? Let’s look at some numbers.
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Google Ads Cost: What Determines Prices?
Google Ads is a digital advertising platform where advertisers or business owners pay based on ad impressions. More precisely, it follows a pay-per-click advertising model, meaning you only pay when a user clicks on your ad.
And now to answer the question: The costs of using Google Ads can also vary. According to WebFX, using the platform generally costs a business between $100 – $10,000 per month, with the average business paying between $0.11 – $0.50 for a click, and $0.51 – $1,000 per 1000 impressions.
However, these are rough estimates and generalizations. Several factors can significantly increase or lower pricing for specific businesses and industries.
- Industry
- Campaign strategy and ad types
- Bidding approach
- Ad scheduling
- Device targeting
- Shifting trends
- Campaign management prices
Industry
Typically, competitive industries like fitness, pet care, or finance will have higher PPC costs than other industries. If you are among these highly competitive businesses, you will need a larger budget to reach better ad positions and more people.
However, different industries will also have their unique characteristics that you should consider. For instance, the average PPC cost of an ad for legal services and attorneys is around $9.21, but a single client is enough to bring in significant revenue.
Understanding how your industry can affect your campaign costs is pivotal for having realistic costs, goals, and above all, budgets.
Campaign Strategy and Ad Types
The type of ads you plan to use and the way you plan to execute your campaign also affects Google Ads pricing.
- Google search ads: These show up in the search engine results pages when users search for a keyword that’s connected to what you're offering.
- Google shopping ads: Visual product displays in the search results with important details, such as ratings and price.
- Google Display ads: Banners are displayed across various apps and sites, part of the Google Display Network (GDN). Instead of keywords, you target users based on interests and demographics.
- Google app ads: This helps you promote mobile apps, with ads appearing on GDN, the search engine, and YouTube.
- Google video ads: These are video ads on YouTube before, after, or during a video.
Some of these ad types will require higher bids as they drive more engagement and are more competitive. Your decision whether you’re focusing on conversions, maximizing clicks, or impressions will also affect costs.
Bidding Approach
The way you bid is another factor impacting Google Ads costs. It determines how much you will pay for conversions, clicks, or other interactions. Bidding means that you set a maximum price you are willing to pay for an interaction. Then, your bid enters an ad auction and competes with other bids.
You can bid either manually or you can automate the process. The former enables you to set the maximum cost for an impression for each ad and keyword. This is ideal if you already know which ads and keywords will get better results, so you allocate higher budgets to them. Automated bidding relies on Google’s algorithm and AI, which sets the bids based on the probability of your ad generating conversions or clicks.
There’s also enhanced CPC or ECPC, which combines the two approaches. You set your bid manually, and then ECPC adjusts it if needed when the probability of conversion is high.
Ad Scheduling
Traffic fluctuates throughout the day and the week, also affecting ad costs. Dayparting or scheduling involves selecting the specific days or hours to show your ad to potential leads, enabling you to take advantage of peak times, and boosting visibility and the probability of driving more clicks.
Device Targeting
The type of device you are targeting will also affect the cost of using Google Ads. The more people use devices, the lower the CPC because reaching a wider audience reduces competition.
For instance, the cost per click for desktops may be higher, as nearly 60% of all internet traffic comes from mobile.
Shifting Trends
Changing user engagement and increased competition can also drive Google Ads costs upward.
- Click-through rate (CTR) increases: Better CTR means more engagement, but it can also create more competition among marketers, driving CPC up.
- Decline in conversion rates: Even if more people are clicking on your ads, costs can increase if only a small percentage converts. This can also mean that you will have to reoptimize your ad or landing page.
Campaign Management Prices
Naturally, costs will also increase if you choose to hire a Google Ads expert. However, the knowledge and experience they offer also means that you will get more out of running these campaigns than you would on your own. You can rely on the agency to take care of keyword research, campaign setup, optimization, and reporting.
Some agencies will ask for a flat fee, others will take a percentage from your ad spend, while a third group may work with a hybrid fee model.
How Does Google Determine Cost Per Click?
Several key factors come into play when Goole calculates your CPC.
- Ad quality and auction time: This includes ad relevance, landing page experience, expected CTR, and more.
- Ad rank thresholds: These are the minimum requirements your ad should meet to appear in the search results.
- Mac CPC bid: The highest amount you are ready to pay for an ad click.
- Search context: Including user location, user device, time of day, keywords, and the search query’s nature.
- Auction competitiveness: The more advertisers bid for the same terms and keywords, the higher the CPC can potentially become.
- Ad format and asset impact: Ad extensions such as structured snippets, callouts, and site links all impact ad performance and boost ad appeal and visibility,
Managing and Optimizing Your Ad Budget
Having a daily budget keeps you from overspending. Your daily budget is the amount of money you set up for each of your campaigns, specifying how much you are comfortable spending each day of the month.
- Check your quality score
- Negative keywords
- Ad extensions
- Test different times and days
- Utilize geotargeting
- Stick to what works
Check Your Quality Score
Your ad’s Quality Score (QS) is a metric that the search engine uses to determine just that — your ad’s quality. Google tries to rate how useful and relevant your ad is to its users. While Quality Score won’t affect your budget, it can affect your cost per click. It can influence ad performance, rank, etc. Most importantly for this topic, Google may reward a higher-quality ad with a lower CPC because it’s deemed more relevant than others.
One of the ways you can improve your QS is by optimizing your landing pages. For instance, you should ensure that your keyword and ad match your landing page. It should also load quickly and be optimized for every screen size and device.
Finding the right keywords can also help you improve your ad’s quality. Experts recommend starting with low-competition keywords to remain cost-effective and give your campaigns a better chance of appearing in relevant searches.
Negative Keywords
Negative keywords are the terms and phrases you don’t want to rank for when potentially showing your ads. Using negatives lets you optimize your budget, eliminating those displays that would be irrelevant to your brand.
Let’s say that you sell custom computer parts, but you don’t service low-budget and pre-owned markets. Adding the phrases “refurbished” or “budget” to your list of negative keywords will prevent your ads from being displayed in such searches.
Ad Extensions
Ad assets or extensions are additional pieces of information you can add to your campaigns to make them more inviting for prospects. Experts recommend adding as many extensions as you can, potentially boosting your click-through rates, which can lower your CPC.
It also makes sense — infusing your ads with more information (just like with other pieces of content when opting for organic optimization) can boost your standard visibility. Callouts for special offers, additional links to your sites, and business location can all help you with lowering your CPC.
Test Different Times and Days
By knowing when your ads perform the best, you can be more effective when it comes to allocating your budget and focus more on ads that are more likely to drive traffic and conversions. In other words, this helps you align your spending with the most impactful times of the day and week. Also, if you avoid peak hours, you won’t waste money when your customers probably won’t see them.
To check which are your best post times, simply review your campaign history and ad performance at different times and throughout the week, and then create a schedule accordingly.
Utilize Geotargeting
Targeting potential prospects’ geographic locations can help you improve ad relevance and optimize your budget because you are not showing your ads to people who aren’t even remotely close to your business.
Geotargeting allows you to select locations where you want the search engine to display your ads. You can target by city, region, country, or even radius around a specific location.
Stick to What Works
Once you’ve figured out your best-performing keywords, crucial locations, and peak-performance hours, it’s time to start generating profit.
Naturally, boosting your profit potential and keeping your budget optimized involves monitoring campaign performance and constantly analyzing your data to determine the types of approaches that help you achieve your goals the quickest.
The best way to monitor your campaign performance is by linking your account on Google Ads with Google Analytics. This way, you can:
- Track your conversions
- Measure engagement on your landing pages
- Identify the content that drives the most traffic
- Gather insights about audience details
- Compare performance on landing pages
- Optimize your budget and bids using cost per acquisition and conversion data
How Much Does Google Ads Cost: Wrapping Things Up
Getting the most out of your ad campaigns on Google Ads requires you to understand how the platform works, how your target audience uses the internet, and just how competitive your industry is regarding paid digital advertising.
While this isn’t impossible to grasp, it may take you more time to get right than you are comfortable with sacrificing. That’s why it’s always a good idea to ask for help from a seasoned advertising team that fully understands the nuances of running a successful campaign.
How Much Does Google Ads Cost FAQs
1. Can you make Google Ads profitable?
The average ROI is around $8 for every dollar spent. However, this will vary depending on your industry and campaign. You can always experiment with different ad types and strategies. Track your performance and create a strategy around the approaches that work best for you.
2. Is SEO superior to Google Ads?
It depends on what you’re looking for. SEO organically ranks your content and website, which is more cost-effective in the long run than advertisements. However, it takes time. Ads, on the other hand, quickly position your site on page one, but will require you to constantly invest in campaigns to keep your ranking high.
Usually, combining the two yields the best results as you can maximize your traffic potential with short-burst ad campaigns and long-term optimization strategies.
3. What should be your ideal budget?
It highly depends on your business goals, industry, ad types, strategy, and the amount of funds you are ready to allocate.
It’s always best to start small and see how your campaigns are doing. You can always increase your spending gradually as you gain more experience and knowledge about the platform, your customers, and industry ad trends.
