What Is Google Ads?
Google Ads is a platform that allows you to create ads, bid on specific keywords, and determine how much you’re willing to pay for every click on your advertisement. When users search for a keyword you’ve selected, if your bid is higher than what other advertisers bid on that keyword, your advertisement will appear at the top of the search results with a small tag next to it, indicating that it’s a paid result.
You can also set daily and monthly budgets on a campaign-by-campaign basis. So, after you find winning keywords to bid on and winning ad creative/layout, let your campaign run knowing there are no surprises since all costs are pre-determined in advance. Lastly, Google Ads offers great flexibility when compared with traditional advertising models – payments only happen when users click through an ad!
What Are The Factors That Influence Google Ads Prices?
Several factors influence Google Ads prices. The most important ones include:
- Location targeting
- Device targeting
- Network targeting
What Are The Strategies For Budgeting For Google Ads?
There are a few key concepts to understand when budgeting for Google Ads. These include: campaign objectives; target audience; budget allocation by keyword or campaign type (display, search or landing pages)
Once you understand these basics better, you can begin to develop your plan. If you still don’t have enough information to create a budget, speak with an experienced ad planner.
What Are The Services That An Agency Can Provide For Google Ads?
An agency can provide a range of services for Google Ads. These services include campaign management, click tracking, lead generation and conversion optimisation. Costs vary between different service providers for Google Ads but typically start at around $1000/month. It’s important to research what is the best fit for your business now so you can optimise your campaigns efficiently and reach your desired goals!
What Are The Right Questions To Ask An Agency About Google Ads Pricing?
You should ask a few questions when planning your Google Ads campaign to ensure you’re getting the most out of your investment. These important questions include:
- How much will my ad spend per click?
- What are the costs associated with running ads?
- What kind of targeting options are available?
An agency can help answer these questions and provide additional insights into how best to reach your target audience. Asking these key questions upfront will help make sure you’re getting the most out of every dollar spent on Google Ads. Contact UDS for more help and support in creating your Google Ads Campaign.
How Does Google Ads’ Pricing Work?
Google Ads’ pricing—or how much Google charges your company directly—depends on:
- Your campaign settings, like your budget and bid
- Your performance in the Google Ad auction, which involves Quality Score and Ad Rank
In a nutshell, the Google Ad auction determines your Ad Rank by combining your bid and your Quality Score (which considers your ad’s relevancy, the landing page and historical performance). Your ad’s placement and cost per click are based on your Ad Rank.
For more information on how Google advertising expenses are determined, see our breakdown.
Top Factors That Impact The Cost Of Google Ads
You must consider other factors as you plan your Google Ads campaign in addition to your budget. A few different variables can significantly impact the price of your advertisements—and how much you’re prepared or anticipated to spend to get good results.
Some industries just have higher expensive costs per click than others, as we noted before in this essay. The industries with substantial revenue, like law, accountancy or real estate, tend to have the highest CPCs. Therefore, if you work in one of these sectors, you’ll need to make room in your marketing budget for the greater charges.
On the other hand, you can have a lot of budgetary flexibility if you work in a sector with a lower CPC (such as the arts, travel, hospitality or entertainment). Instead of looking for average Google Ad prices generally, try focusing on your industry to find out what other companies in your niche pay and what your CPCs will be.
2. Current Trends
Online trends are constantly evolving, and Google Ads are no exception. Based on actual events, CPCs for keywords might substantially rise or fall.
Consider the impact of COVID-19 as an example. CPCs in the garment sector fell, while those in the consumer goods sectors soared as consumers rushed out to buy food, drink, toiletries and other necessities.
This is not to claim that you can accurately forecast changes in your Google Ads costs. Nevertheless, keeping an eye on societal shifts and noteworthy occurrences is beneficial. This can assist you in getting ready for and navigating waves of industry change.
The Cost Of Agency Services
In actuality, managing a PPC program (like Google Ads) is challenging. A good campaign involves a myriad of intricate details, and managing them might take hours out of your team’s day every day.
Because of this, many companies that spend money on PPC advertising also spend money on a partner for PPC management. In essence, they’re paying a group of experts to create, roll out and manage their Google Ads campaigns. Not only can working with a PPC partner reduce your workload, but it also puts you on an even playing field with your rivals (who also have PPC teams in their corners).
Without going overboard with your ad budget, a great PPC management provider may assist generate clicks and leads to your website. They’ll make sure your expenses stay low while producing worthwhile results.
The Benefits Of Advertising With Google Ads
You may be asking yourself at this point, “Is Google Ads worth it? Should I really invest thousands of dollars in paid advertising?”
Even if we can’t decide for you, we can let you know that:
- 62% of all core search queries in the U.S. are generated by Google
- Google is the biggest provider of search advertising
- Over 70% of U.S. search ad spending goes to Google
The basic line is that your competitors are probably (if not definitely) investing in sponsored advertising. The easiest approach to stake out a position in search results and attract the attention your company needs is to start a Google Ads campaign.
Some of the main advantages consumers of Google Ads have cited are as follows:
1. More Conversions And Traffic
New strategies for prioritising and optimising higher conversion rates are constantly being introduced by Google Ads. For instance, “conversion targets” have been added to the platform in 2021 to assist users in managing their campaigns.
People who click on Google Ads are looking for something. They are prepared to make a purchase, which is a lucrative type of customer to attract to your page. Directly displaying Google Ads in search results (or displays) is a great way to increase traffic, particularly for the most sought-after customers.
2. Precise Audience Targeting
You want valuable clients for your firm, not just valuable consumers in general. This entails focusing on the appropriate age range, area and shopper type. Thankfully, Google Ads makes this simple with a variety of methods for fine-tuning your audience targeting.
3. Quick, Lucrative Results
The basic fact is that Google Ads advertising provides a quick way to the top of the search results. Although SEO is a potent weapon, it takes a lot of work and perseverance to succeed. Paid Google Ads, on the other hand, can bring you to the top of searchers’ minds.
Google Ad campaigns typically have good ROIs as a result. To see a noticeable increase in traffic and conversions, you don’t need to spend tens of thousands of dollars, and you only pay for your advertisements when someone clicks on them.
We can’t tell you how much you should spend on Google Ads, but we can tell you that a successful campaign has some significant, high-paying advantages. Your competitors are already using paid advertising, therefore, the time is now to start learning about your income potential in this area.
Factors That Impact Google Ads Pricing
As was already said (and is precisely the reason this guide was created), there is no easy or universal solution to the question of how much Google Ads will cost your company. Your sector, customer lifetime, current trends and how effectively you manage your account all affect the cost of Google Ads.
The industry has the most impact on Google Ads price. For instance, one of the more competitive verticals in Google Ads is business services (legal, accounting, real estate, etc.), which typically results in higher costs per click (CPC). This is due to the nature of the professional services sector: a $50 CPC is a tiny amount to pay for a client whose revenue could range from $1,000 to $10,000, depending on your firm.
Businesses in the arts and entertainment vertical, on the other hand, have lower CPCs, but they must reach a lot more consumers to achieve the $1,000–$10,000 mark.
2. Customer Lifecycle
The lifecycle of your consumer is another important factor to consider. The decision-making process for larger ticket offers takes more time. Therefore it’s important for your company to remain top-of-mind during that period. Before making that last decision, this can entail several visits to your website, a few content downloads, attending a webinar and more.
3. Current Trends
Online advertising platforms and consumer trends are never at a standstill. It’s critical to stay current with both emotive and empirical developments in your field and within your sector. Consider COVID as an example. The average cost per click for the apparel sector was around $1.40 at the height of the pandemic. When average conversion rates increased in April, they fell to $0.70 before rising to $0.89 in May.
How Does Google Ads Determine Your Cost Per Click?
The wonderful thing about Google Ads is that even while it functions as an auction, the winners aren’t decided only on the basis of bid, and you don’t always have to spend your maximum bid. How is that even possible? Let’s quickly go through how Google Ads chooses the winners and how much each click costs.
1. Quality Score
Google checks to see if any advertisers are placing bids on keywords related to a user’s search when they conduct one. If the answer is yes, Google places all pertinent ads in the auction. Each advertisement is given a Quality Score as the first step in selecting the winner. This score ranges from 1 to 10, depending on the keyword relevancy of the ad and landing page, anticipated click-through rate (which takes into account past performance) and landing page experience.
2. Ad Rank
The Ad Rank of each competing ad is then calculated by Google, determining if and where your ad will appear in the paid results area. The highest bid or the amount you’re willing to spend per click on your ad, multiplied by your Quality Score determines your Ad Rank.
The commercials that have the highest Ad Rank scores are displayed.
3. Cost Per Click
You only pay if someone clicks on your ad if it is displayed. However, as was already said, you may not actually pay your highest bid. The cost per click for Google Ads is calculated as follows: your Quality Score multiplied by the Ad Rank of the ad that is immediately below yours, plus one penny.
By using this formula, an advertiser in the SERP can pay less per click than another advertiser and still rank higher because of a greater Quality Score. Because of this, small-budget advertisers on Google can compete with those who have large budgets.
How Does Budgeting Work With Google Ads Costs?
Let’s move on to the budgeting aspect of Google Ads cost. Too frequently, advertisers witness their monthly Google Ads budget disappear in a matter of days, causing them to feel Google Ads is unaffordable. This isn’t always the case; more frequently, it’s due to an incorrect understanding of how Google Ads budgeting functions. So let’s correct the record. The terms to understand are listed below:
- Budget: How much you’re able to spend on Google Ads
- Bid: The most you’re willing to pay for a click on your ad
- Spend the amount Google takes out of your budget when an ad participates in an auction
- Cost: The actual amount you pay for a click on your ad
Daily Average Budgets
You will be prompted for a daily budget when you create a campaign in Google Ads. Although there is a shared budget tool, giving each campaign its own distinct budget is recommended when you start off. However, your daily spending cap does not guarantee that Google will spend that much daily. You’re providing Google with a ballpark figure for how much you want your daily spending to total up to at the end of the month, so it may go over or under that figure on any given day. It brings up financial restrictions.
What Other Factors Influence My Google Ads Costs?
There are aspects that affect how your budget is spent, which also has an impact on how much money you can save using Google Ads, just as there are factors that affect your Quality Score, which influences your Ad Rank, which affects your cost per click.
Dayparting also referred to as ad scheduling, is the technique of deciding when you want your adverts to be seen by potential customers. You can specify a time for Google to display your ads, even though they will still go through the ad auction process.
This is especially helpful for small businesses that wish to leverage their advertisements to draw clients into a real location. For instance, if you own a bakery that shuts at 7 p.m., you might not want your advertisements to appear outside of those times. Alternatively, you might specify that your adverts run continuously throughout the day but reserve a larger chunk of your daily budget for the times when you want them to be more noticeable.
You can spend more of your Google Ads budget in specific geographic locations just as you can spend more of it at specific times of the day. Geotargeting also referred to as location targeting, is this method.
Using geotargeting, you can ensure that only Google searches in particular locations see your advertisements. These areas can be as broad as a state or province or as tiny as a three-block area around your business.
Google Ads geotargeting can be a great method to take advantage of rising mobile traffic patterns and today’s consumers’ on-the-go shopping behaviours, and it may influence how you allocate your daily ad budget. For instance, you might want your advertisements to appear next to pertinent searches in a certain state, but you might also devote more resources to searches made in a certain city or neighbourhood.
3. Device Targeting
The days of consumers only conducting online searches through desktop browsers are long gone. Consumers now conduct internet searches across several devices, frequently concurrently, so you must be aware of the source of your most valuable leads. Device targeting becomes important in this situation.
Let’s imagine you want to appear in search results for desktop and mobile users, but you value mobile traffic more. You may designate a chunk of your budget for desktop use while allocating a larger portion to mobile devices. Depending on what you’re advertising or your ad text, you might even want to spend more money on visitors from particular types of mobile devices.
The most crucial parts of budgeting for PPC are setting a daily budget and understanding how it will be used up, but it pays to be aware of how sophisticated targeting options might impact your ad spend.
How Much Do Typical Businesses Spend On Google Ads?
The topic of how much “normal” firms spend on Google Ads as part of their overall online marketing expenses is sometimes asked after someone inquires about the average cost-per-click of a PPC ad. Unfortunately, there is no simple answer to this query either. But it doesn’t mean we can’t provide you with some further information regarding the average amount of money spent by businesses on paid searches. We must first examine the total spending information by industry.
In the end, there is no one response to the query “How much do Google Ads cost?”
The CPCs and administrative costs are just two of the many factors that go into the entire cost of Google Ads. To create a competitive AdWords budget that works for you, you must evaluate the broad objectives of your company. To discover what a successful campaign looks like for your organisation, you’ll typically need to go through a phase of testing and reconfiguration.
It may be time to speak with a PPC marketing firm if you’re having trouble coming up with a Google Ads budget or are simply unsure of where to begin with the entire process. They’ll be delighted to steer you in the proper direction.
Is The Google Ads Price Right For You?
Although there are many variables that can significantly affect the cost of operating a PPC campaign, as we’ve said throughout, practically any sort of business can benefit from Google Ads. Leave a comment if you have any specific questions or if you’re unsure about anything we’ve addressed in this tutorial; we’ll do our best to respond.
Follow our detailed instructions on running Google Ads if you’re ready to get started, and then use our free Google Ads Performance Grader to ensure you’re not wasting any money.
We recommend you reach out to Ubique Digital Solutions, a digital marketing solution that helps you plan your marketing actions and strategies. UDS will surely help you with how much cost you might spend on your Google ads in the future. Contact UDS now and avoid any other unnecessary expenses for your business.