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How much should Google Ads cost? A guide for marketers

Paid search can be a great way to boost your brand’s visibility and awareness – but do you know how much Google Ads cost and what you can expect to get for your money?

Why use Google Ads?

The Google Ads platform is one of the best tools available for quick lead generation. When used correctly, it can provide your website with highly targeted traffic to improve your chances of conversion. It’s a flexible, scalable platform that’s suitable for all firms, regardless of size or budget.

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What options are there for advertising on Google?

Google Ads actually covers a large variety of different ad types, from basic pay-per-click text ads that show up at the top of organic search results to display, video and retargeting ads. At a broad level, they can be broken down into nine key types, which are as follows:

  • Search – Text ads that appear alongside Google search results.
  • Display – Image-based ads that are shown across the web via the Google Display Network.
  • Video – Usually five to 15 second videos that primarily appear as YouTube ads.
  • Shopping – Designed to be seen specifically in Google Shopping results.
  • App – Encourage people to install or engage with your mobile app.
  • Discovery – Targeted ads that aim to reach users at the point of engagement.
  • Local – Reach customers looking for results within a specific physical area.
  • Smart – Use Google’s targeting algorithms to find the right audiences based on key themes.
  • Performance Max – Goal-based campaigns that can show ads across Google’s network.
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Why use Google Ads for marketing products and services?

One of the main reasons for turning to Google Ads is reach, as this gives you access to the largest audience on the planet. Worldwide, the platform accounts for around 84 per cent of searches – but in the UK, this increases to 93.6 per cent as of 2023.

What’s more, these users are well-accustomed to advertising. According to HubSpot, almost two-thirds of people (63 per cent) have clicked on a Google ad, while 68 per cent of marketers agree that paid advertising is either “very important” or “extremely important” to their overall marketing strategy. 

In other words, your competitors will be using Google Ads, and your potential customers will be clicking on them. Therefore, if you don’t want to miss out, you need to be getting on board. 

What are the benefits of using Google Ads?

Google Ads can offer benefits to all businesses, as long as campaigns are planned and managed effectively. Among the key advantages are the following:

  • It’s flexible and scalable – Google lets you spend anything from a few hundred pounds to millions, so you can run tests, experiment with altering your targeting and easily ramp up what works.
  • It’s fast – When compared with organic search engine optimisation, paid ads offer much quicker returns. While it may take months for organic efforts to get you to the top of search engine results pages (SERPs), Google Ads provides instant visibility and access to customers.
  • It’s measurable – Using the included suite of Google analytics tools gives you clear insight into how your ads are performing, allowing you to easily improve your future campaigns.
  • It’s controllable – Google makes it easy to refine ads based on who you want to target and what your budget is.
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What sort of ROI can Google Ads offer to marketers?

Another key benefit of using Google Ads as part of a campaign is its potential for a strong return on investment (ROI). According to Google’s own estimates, on average, for every dollar spent on the platform, marketers can see a return of $2.

This makes for a typical ROI of 200 per cent, which certainly compares favourably with other forms of paid marketing. However, the search engine itself goes further than this when the value of added clicks and visibility are taken into account. In fact, the company states:

“We conservatively estimate that for every $1 a business spends on Google Ads, they receive $8 in profit through Google Search and Ads.”

How much do Google Ads cost? A quick pricing guide

There’s no easy answer to the question of how much businesses can expect Google Ads to cost, as there are numerous factors that go into the calculations. Indeed, figures vary widely across industry, the size of the business and the type of campaign you’re running. However, having a broad understanding of what similar businesses and promotions are paying can give you a good starting point as to what you can expect.

What is the average CPC for Google Ads?

There are a lot of factors that can affect cost-per-click (CPC) for Google search ads, so ‘how much will it cost?’  is not a straightforward question. In practice, it will depend on a wide range of scenarios and goals, which is why different sources often give different answers to this question.

However, to give an indication, figures from WordStream indicate that in 2023, the average overall CPC for Google Ads stood at $4.22.

Headline figures like this only tell half the story though. For instance, they don’t consider how likely each of those clicks is to lead to a conversion. If you’re in a niche industry or are targeting users with very specific queries, a higher cost-per-click may be more than offset by an improved conversion rate, whereas ads with a higher clickthrough rate may only lead to a few results if they are not targeted effectively.

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How does the average CPC of Google Ads compare to other platforms?

While Google is the most popular platform for running PPC advertising, it’s not the only choice available. For instance, there are options with other search engines, such as Bing Ads that you may want to consider if Google Ads pricing seems too steep for your budget. 

Indeed, some estimates suggest that Microsoft ads can be up to 70 per cent cheaper in terms of CPC than Google depending on the sector you’re in. Of course this reflects the lower traffic you’re likely to receive, but if you’re competing for highly popular terms, it may be an option worth considering.

You should also look into areas such as social advertising. Facebook ads, LinkedIn advertising and X/Twitter campaigns tend to be more expensive per click than Google search, but they have the advantage of often being more highly targeted, as social media sites can use the wealth of information they collect on their users to narrow down your desired audiences.

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What factors affect your Google advertising cost?

There are several factors that Google takes into account when calculating the price you’ll pay for your ad campaign. These include:

  • Keyword
  • Industry
  • Level of competition
  • Quality Score
  • Ad type
  • Target audience/device
  • Budget
  • Ad rank
  • Maximum bid

This can be quite a lot to think about, but once you get to grips with what each means in practice, you can start making changes to your ads and experimenting with techniques like A/B testing to find the combination that works for you.

How does the cost of Google Ads differ by industry?

The total cost of Google Ads can vary widely by industry. Indeed, this is one of the biggest determining factors that influences pricing, as this also has an effect on issues such as keywords and competition. Therefore, it’s important to understand what the typical expenses are for your own sector when determining whether or not your campaign will be cost effective.

WordStream’s figures show that in 2023, the average cost per click for search advertising across all industries was $4.22. However, it noted that actual costs can vary substantially depending on the sector in which you operate.

For instance it found that the three most expensive industries in terms of CPC are:

  • Legal services ($9.21)
  • Dental services ($6.69)
  • Home improvement ($6.55)

By contrast, the cheapest sectors in the study for ad cost were:

  • Real estate ($1.55)
  • Arts and entertainment ($1.55)
  • Travel ($1.63)

How to optimise costs for your Google Ads campaign

Once you understand what factors go into calculated Google Ad costs, you can set about crafting a campaign that’s optimised to provide the highest return on investment. While Google dashboards aim to make this as straightforward as possible, it still pays to have an expert pay per click partner on hand to manage your ad spend and offer expert advice on where best to focus your resources – as well as to help with the content creation for the ads themselves.

How does budgeting work with Google Ads?

The first thing you need to do when creating a Google Ads campaign is to set a budget. This places an upper spending limit for each individual campaign – but you won’t necessarily spend all of this, depending on how you choose to manage bids. You can set a budget for a single campaign, or a shared budget – so for example, if you underspend on one campaign, the remaining budget can be automatically sent to another.

You should set your budget based on the average amount you’re willing to spend per day. If you prefer to think in monthly terms, you can calculate this by multiplying your average daily budget by 30.4. You can also set a maximum cost per click for bids, which places a cap on how much you’ll pay for each ad click. The higher you set this, the more bids you’re likely to win and the more traffic you can expect – though naturally, it will mean spending more.

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How does Quality Score affect the cost of Google Ads?

How much you’re willing to pay for an ad is only half of how Google determines where your ad is seen. The other half relates to quality. This means you can still appear above your competition even if they pay more than you, providing your ad has a strong quality score and highly relevant keywords. 

The best way to assess your ads is by using Google’s Quality Score, which is a tool to see how your ads perform compared to competitors. This isn’t a direct factor in a Google Ads auction, but can be used to improve your ads, landing pages or keyword selection in order to reduce your CPC.

Quality Score is calculated based on three key elements. These are:

  • Expected click-through rate – How likely is it that someone who sees your ad will click it?
  • Ad relevance – How closely does it match a searcher’s user intent for its keyword? 
  • Landing page experience – How relevant and useful is the landing page that people reach after clicking?

Ads that are rated as above average in all three categories are more likely to be rewarded with higher placements and, in turn, lower costs. According to Wordstream, an ad with a top Quality Score can enjoy a 50 per cent lower CPC than an average ad, while one that scores poorly (one out of ten) can cost 400 per cent more than average

How can you monitor your Google Ads account performance?

Google provides a range of tools for monitoring the performance of your ads. In addition to the Quality Score that can tell you how you measure up to the competition, you can find a variety of information in your Google Ads account.

For example, under the Ads page, you’ll be able to view the following key details about your campaigns:

  • Status – This shows the eligibility and approval status of your ads and can alert you if any of your ads have been rejected or have any limitations on where they may be seen.
  • Click-through rate (CTR) – This details how often customers click your ad after it’s displayed to them. A low CTR (generally less than one per cent) indicates that your ads aren’t reaching the right audience.
  • Average CPC – Shows the average cost each time a potential customer clicks on your ad, which

As well as ads, you can also view the performance of each of your keywords and your wider campaign goals. Google offers tools for key performance indicators such as impressions, traffic, conversions and sales in order to give you a clearer idea of your overall return on investment.

It also pays to team up with a full service agency. A good partner will not only be able to provide full analytics insight into your campaigns, but offer clear advice for how to improve in the future. This may include keyword research to uncover any new opportunities, content creation for search and display ads, and website audits to make sure your landing pages are up to scratch. 

Get in touch with Axonn today to find out how we can help you make the most of your Google Ads account.