As a PPC specialist, if I could get £1 every time someone asks me: “How much does it cost to put my ad on Google?” or “How much more I need to spend to see my ad in position #1?” then I would be very rich by now!
Every day millions of users surf the net, processing 3.5 billions searches per day, 40,000 of which are only on Google. That means it is imperative in today’s world to be online, to have a website to promote your business or product, and to be active on social media.
But in every case, the question remains: At what cost?
The answer usually is: Well... it depends. [Cue end of the article!]
The truth is that the cost depends on a number of factors: How much you're prepared to spend on Google Ads, your goals and KPIs, and so much more.
So in this article, we’re going to provide our take on the age-old question: How much does Google Ads cost?
How does Google Ads work?
Before we even talk about Google Ads (formally Google AdWords), keywords and more, let’s go behind the scenes of Paid search and explore how an ad ends up on the Google network.
Paid Search is auction based. It starts with your bid on a keyword, your CPC (cost-per-click) bid then goes onto the Google auction to calculate ranks. From there, ads are displayed against the keywords, users in turn click on the ad, and the advertiser pays for that click.
“That’s all? Ok then put a £10 CPC, so my ads ranking will be high!” (a client really asked me this once!)
In an ideal world this would be an easy rule to follow if Google Ads didn’t utilise the “Quality Score” metric. This is Google's rating of the quality and relevance of both your keywords and ads of your PPC campaign. It is used to determine your cost-per-click and multiplied by your maximum bid to determine your ad rank in the ad auction process.
In short, the higher your quality score, the lower your minimum bid and price you will have to pay per click.
There are a number of different factors that can influence the quality score of your ads. Let’s look at some in detail:
Your ad copy, keywords and landing page must be relevant. For example, if your landing page is promoting oranges, why is your ad content about apples?
Click-through rate (CTR) percentage
If your impressions are high, but clicks are low, that means your ads are not relevant to the keywords.
To use the last example, if the ad is about apples but you are bidding on red oranges, not only is it considered not relevant, but your clickthrough rate will be extremely low.
Ad group structure
Ad group structure is important too. Fewer themed keywords per group will make sure that your quality score “holy trinity” (ad copy, keywords and landing pages) are relevant.
4 factors that influence your bid and media costs
On top of the quality score, there are other factors that can influence your bid (and consequently your media cost). Let’s explore each of those further:
When logged into your Google Ads account, you can increase your bid depending on device, geolocation, time of the day, days of the week and more. This can be very handy if you want to be flexible with your daily budgets.
Different industries can require different levels of investment. For example, if you are in the insurance industry, don’t be scared, or alarmed when you’re presented with a cost-per-click of up to £15 or £20.
Check out this article by WordStream to see Google Ads benchmarks for various different industries. Or you can get an indicator from this chart below:
Keywords can become highly competitive. Sometimes short-tail keywords tend to be more expensive than long-tail ones.
Check out the chart below, again from WordStream, to see the top 20 keyword categories, and how competitive and expensive the cost-per-click can end up being.
Unfortunately you can’t control what your competition is doing, nor can you control their ads content and max cost-per-click.
The cost of Google Ads: The real question...
Let’s now return to our original question: “How much does Google Ads cost?”
The real question should be: “How much can, or am I willing to pay to enter the Google auction?”
Media Budgets can vary. If you are new to the Google world, we would suggest a conservative media budget of £1,000 per month, as this would be a sufficient amount to give you an early idea of what you can get in return.
A more established veteran of Google Ads, or a well established business might want to consider a monthly budget of £5,000 per month upwards. But ultimately it comes down to your decision; how invested are you in the success of your ads?
Through the Google Ads platform you can manage your ads content, see what are the most effective keywords, what is the average CPC, what your competitors are doing, what the return on the investment is and above you can see if your goals are met
From here you can then start to organise your Google Ads campaign and think strategically about the next steps.
Let’s not forget as well the other costs to consider: Software fees and agency fees. If you choose to work with a digital marketing agency, there will inevitably be costs associated with that.
A typical agency will either charge a fixed fee per month, or a performance fee which is normally a percentage of your ad spend. You may also want to consider software to help you with your ads, such as SEMrush or Majestic.
Are you ready to invest properly in your Google Ads?
Whatever approach you choose, Google Ads can be a fantastic tool in a business’ advertising arsenal.
Best-case scenario, your ads performing outstandingly well, with a low cost-per-click and high return-on-investment. Worst-case scenario, you lose a bit of your budget when testing out the ads platform.