How Much Does Google Ads Cost?

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Bharat Patel

Head of Digital Marketing

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Google Ads are a great way to promote your business online. But how do you know what the best price for Google Ads is?

Google Ads pricing is based on two main factors: Cost Per Click (CPC) and Cost Per Impression (CPM). CPC is the amount you pay every time someone clicks on your ad, while CPM is the amount you pay every time someone sees your ad.

The price of Google Ads varies depending on these two factors. You can choose to pay a higher CPC or CPM to get more clicks or impressions, but be aware that this will also increase the cost of running an ad campaign.

What Is Google Ads?

Image Source: Leadsbridge

Google Ads is a web-based advertising tool of Google for businesses. It was launched in 2000 to generate targeted traffic to a website by displaying relevant ads based on its content.

By setting up Google Ads, you are essentially setting up your billboard that can be seen by anyone who searches a related keyword or phrase while browsing Google. The text and image ads shown on this “billboard” are called “Ads.”

How Much Do Google Ads Cost?

The cost of ads depends on their objective and the location they are being shown. There are cases when an ad can cost as little as $1 per day, but there are also cases when it can cost $50 per day, depending on your advertising budget.

The objectives for Google Ads include

  • Awareness
  • Conversion 
  • Retargeting

However, the cost of Google Ads also depends on different factors like location, conversion rate, impressions, click-thru rate, and whether they are text ads or images. You must keep track of what works and what doesn’t with your ad campaigns to optimize your budget and make sustainable marketing plans over time.

Image Source: Wordstream

How Much Do Businesses Spend On Google Ads?

Google Ads are the most popular way for businesses to drive traffic to their website, but not all businesses have enough resources to spend on this marketing tool. So how much do enterprises spend on Google Ads?

The answer can be found by looking at two different types of businesses. Businesses that always need to be in front of potential customers will probably spend a lot of money on Google Ads. The other type of business with a budget that limits their investment will likely only invest what they think is necessary, which might not be as much as the former type.

For a thorough perspective into what’s happening in your industry, take a look at the CPC breakdown for Google Ads:

INDUSTRYAVERAGE CPC (SEARCH NETWORK)AVERAGE CPC (DISPLAY NETWORK)
Advocacy$1.43$0.62
Auto$2.46$0.58
B2B$3.33$0.79
Consumer Services$6.40$0.81
Dating and Personals$2.78$1.49
Ecommerce$1.16$0.45
Education$2.40$0.47
Employment Services$2.04$0.78
Finance and Insurance$3.44$0.86
Health and Medical$2.62$0.63
Home Goods$2.94$0.60
Industrial Services$2.56$0.54
Legal$6.75$0.72
Real Estate$2.37$0.75
Technology$3.80$0.51
Travel and Hospitality$1.53$0.44
Table Source: WebFX

How Does Google Ads work?

Google Ads provides a search engine, and it uses data on users’ searches to help advertisers reach the right people with their campaigns.

Google ads are ranked based on the relevancy of the keyword, ad copy, landing page, and website chosen. The algorithm considers even small keywords in many campaigns like “sports shoes” and ranks that page higher than a page with a less specific keyword like “running shoes.” This is why it’s important to use relevant keywords when creating your ad copy.

The goal is to get your ads in front of as many people as possible while ensuring they’re relevant and appealing to them.

Image Source: LeadSquared

Google Ads uses a bidding system to display ads on web pages in a pay-per-click (PPC) form. It is an advertising service that allows advertisers to use contextual targeting to reach potential customers.

Here are some of the ways Google Ads can help you:

1.  Create ads and create ad groups.

2.  Select keywords or topics for your ads.

3.  Use different ad formats, such as text, animated image, video, and rich media.

4.  Control how often your ad appears by setting daily budgets and bids for each keyword or topic selected in your campaign plan.

How To Lower Your Google Ads Cost?

1. Focus more on keyword intent rather than volume

If the volume is low, you can use keywords that have longtail search intent if the volume is low. It reduces the costs of clicking. 

2. Add negative words

Include negative keywords which you do not like in ad copy and reduce Google advertising costs. The use of irrelevant keywords can cause more clicks to be paid out. 

3. Quality Score

Increase your ad quality score by ensuring that you have a relevant ad, landing page, and keyword combination.

4. Optimize Your Ads

This means using tools and scripts to create ads that are relevant to your customers and that people want to click on. Remember that making sure the ad looks professional is also essential – people tend to close out ads they don’t find appealing right away without reading what they say!

5. Ad extensions

Add site link extension or call extensions to improve click-through rates by providing a better experience for the user and improving customer satisfaction.

Set A Budget And Bid For Google Ads

Enter your company’s budget and bid for each advertising campaign.

The budget is the amount of money you are willing to spend on an advertising campaign. The bid is the amount of money you are willing to pay per click.

Bids can vary depending on the specific type of advertising campaign (text ads, image ads, video ads). For example, video ads cost more pay per click than text or image ads. So if you want to get the best return on your investment, it’s best to use a mix of different types of advertisement – although there may be a higher upfront cost, this will make it more worthwhile in the long run.

Image Source: Google Support

Budgets can be determined by the cost-per-acquisition, which is the amount of money spent to get the sale. For instance, in eCommerce, if you know that you will get two sales for every 1000 visitors who click on an ad and your conversion rate is 1%, then your CPA would be $49.00. This means that you earn one sale for every $49 spent on ads.

It is essential to set a budget not just by how much money you want to spend but also by how many conversions or sales per month do you want to make? For example, if a CPA of $49.00 isn’t profitable enough for your business goals and your monthly conversion rate is 1%, then you should raise the monthly budget so that there are more leads to convert.

Advertisers enter a keyword or phrase for their advertisement campaign and create a list of keywords, target geographic area, set budget, set bid type (fixed CPC or cost-per-click), and set days to run ads. Google’s Ads Auction decides which ads are shown to users who are searching on Google’s search engine.

Image Source: Google Support

The Google Ads auction occurs in real-time, and the highest bidder takes up the slot on a search engine’s results page. During this process, Google determines how much to charge for each ad by how “relevant” they are to what people are searching for, so advertisers can show ads to people who might be interested in their product or service.

Best Budget For Google Ads

With so many options out there, it can be challenging to find the best budget for Google Ads. But these three easy steps will make your budget search more manageable and more effective.

The first step to finding the best budget for Google AdWords is determining your budget. Many different factors go into this cost, such as what you plan on advertising, how much profit you want to make, and how much work you are willing to put in.

The next step is determining your goals. This will help determine how much of each type of ad you should be running and other details like keyword volume or campaign duration. You need to assess your goals to see if a blended approach will help you with them.

Finally, measure the results of your campaign. This will allow you to see whether or not your campaign is successful or not and make future adjustments if necessary.

How Much Should You Spend On Google Ads?

Paying for Google Ads can be tricky because there are many different options. In addition, so many various factors can affect the success of your ad campaign, so you may need to experiment with a few things before you find the winning formula.

Need help creating your Google Ads budget?

Our PPC management services can provide you with the customer insight that you need to become more effective with your ads.

The more you spend on your ads, the more customers you will reach. With higher bids, you will place your ads in more spots and increase the number of ad impressions. The downside is that this often leads to lower click-through rates, as many people will become desensitized to seeing your ad over time.

Always test new ad campaigns before investing a lot of money into them by running them in a small batch first and then monitoring their progress over time.

How To Predict Your Google Ads Costs?

Knowing the conversion rate of your ads is the most critical metric to predict Google Ads costs. You can predict your Google Ads costs by using the following three ways:

  • You can estimate a ballpark range of your cost just by looking at your keyword bids, total clicks, and total conversions.
  • You can use Google Keyword Planner Tool to get an estimate for how much you will pay for every click.
  • You can also use also hire PPC Agency in USA, which is more in-depth and provides more details like estimated cost per lead, cost per conversion Actual CPC, etc.

Factors Influencing Google Ads Spend

The Google Ads spend depends on the industry, the advertiser’s goals, and location. This affects how you bid, the ad placements, click rates, and click cost. 

The factors influencing Google Ads spending include product quality, bid amount, cost per conversion, and conversion rate.

Product Quality

If a product is more popular or has more of a selling point than another product, it will cost more because its quality is better.

Bid Amount

The Google Ads bidding system works on the keyword level, meaning the bid amount per keyword will affect the total ad spend.

Cost Per Conversion

The higher your cost per conversion, the more money you have to spend to get a customer. And if your campaign has reached its goal and you’ve stopped spending money on it, then this factor would be irrelevant.

Conversion Rate

This factor is essential because it’s all about how many people buy after contacting a company through their online form.

In some instances, two companies compete for the same position on Google Search. Also, there appears to be plenty of competition during holiday shopping. The costs per click can therefore vary during the month.

Quick Tips to Optimize Your Google Ads Campaign

Image Source: Google Support

Optimizing Google Ads campaigns can help you maximize their effectiveness. Google ad campaigns can achieve measurable ROIs with little optimization and precision. Let’s take an overview of increasing ROI on Google advertising with this list.

Optimize for Negative Keywords

Image Source: PPCexpo

A good way for your website to ensure optimum search results in Google Ads keyword research is by adding negative keywords by checking your search results. When a search engine optimizes a negative keyword, you can indicate that the keywords are useless to the business you offer. As a result, your advertisements are unlikely to appear in search results in areas where your customers don’t understand the intended purpose. For example, when you’re selling footwear for women or children, the terms women or children shoes and some other terms should be excluded.

Pause/Stop Underperforming Keywords

Search engines must be regularly reviewed for performance. It is essential to see which keyword group produces clicks and converts and which one does not. Check its click rate to determine if a keyword has a low conversion rate. A keyword that generated just five or more conversions will need to be paused. But you must check the click-through rate too. A keyword that converts from 5 to 10 clicks will have 50% conversion — and therefore, it can make good use of your campaign.

Keep track of your campaign

How do we improve things based on lack of tracking? Keeping track of campaigns enables optimizing their effectiveness. PPC is about optimizing the budget for generating better results than a poor search term. Having feedback loops to monitor conversion rates won’t allow you to push the limits harder or stop. Monitoring your PPC campaign by professional PPC Agency can be very useful in analyzing how you are generating conversions as well as business incomes within your organization.

Check High-Converting Keywords

You should have more money available for the best keyword upon deleting low conversion keywords. First, make sure you know which group has the highest CTR. Identify your keywords. We recommend learning the search terms and the keywords in your Google ads. 

Optimize Your Landing Page

Landing pages are notoriously known to be a great place to convert visitors into leads.

To make sure that your landing page is converting, it needs to have a call-to-action (CTA).

Landing pages have the ultimate goal of getting people to take any action – it should be clear that they should do something by scrolling down or clicking on a button.

Use Ad Extensions

Ad extensions are a series of tools that Google Ads offers to help you reach more people better. If you are not familiar with Ads extensions, it is a simple way to get your ad to display in more places throughout the SERP, leading to increased conversion rates.

Here are three of the most popular ad extensions that content marketers should be adding to their Google Ads campaigns:

  • Sitelink Extensions

Sitelinks allow each link within your ad extension to link directly back to individual landing pages on your website.

  • Callout Extensions

Callouts provide additional details about your business for people who may be interested.

  • Structured Snippets

Structured snippets allow you to include up to two lines of text and a photo or video from YouTube or Google. This way, you can tell your story with an image or video relevant to the content.

Is Google Ads An Effective Advertising Platform?

To answer this question, let us first look at what Google ads are.

Google Ads is a platform for advertisers to show ads on Google’s own websites and third-party websites. It is an effective advertising platform because it can track the success of the ads from the billions of user searches and clicks made on the Google search engine.

There are four types of products for advertising: 

  • Text ads
  • Image or multimedia ads
  • YouTube video campaigns
  • Shopping campaigns

These serve as customer acquisition tools rather than branding tools. The effectiveness of these products is determined by their business objectives and not by clicks or views, which generate revenue per click (CPC). The cost-per-click (CPC) will depend on how well-targeted your advertisement is to your potential customers’ needs and intent. For example, if you are an organic food company and your target audience is interested in healthy eating, ads promoting free-range chicken may be relevant. However, if you are a music streaming company that mainly competes with Spotify, it may not be as useful to advertise with Google search.

Other Factors Influence The Google Ads Spend

The spend decision is extremely important for advertisers. It involves careful consideration of the effectiveness of a campaign and looking at variables that influence this decision. There are many factors that influence the spending decision. 

Let’s look at some of them.

Geotargeting

Image Source: Wordstream

Geo-targeting allows a searcher to focus their search results in particular areas. These zones can reach as large as states or provinces or as tiny as three blocks from the store. Google’s geo-targeting is a great opportunity to gain a better insight into growing consumer mobile activity and mobile shopping preferences.

Device Targeting

Image Source: Wordstream

Device targeting is a way for marketers to decide who to advertise to. There are three ways companies can do this:

1) Target mobile devices only: This is the most cost-effective option because it costs less to reach people on a mobile device than it does on desktops or laptops. This targeting method is also helpful for getting people who are not logged into their social media accounts – which increases conversion rates.

2) Target desktop users only: Desktop users have a higher lifetime value than mobile users, but advertisers pay more per click because they spend more time on desktop computers – especially when they are using a laptop or desktop.

3) Target both desktop and mobile devices: People use various types of devices at different times, so it would be best to split this content up by device type.

Dayparting

Image Source: Wordstream

Dayparting is an advertising strategy based on the appearance of the advertisement to potential customers. While the ads will still need the auctioning process, you can tell Google if you want the ads to appear on the internet. The feature will help local businesses attract people to an e-commerce website with advertising. You may have fewer ads in a bakery if you have one that closes before 7 pm.

Why Advertise On Google Ads?

Advertise on Google Ads because it is the most effective method of reaching customers. It is also the best way to show results and growth in return on investment (ROI).

● Advertisers can reach clients through cost-per-click (CPC) bidding for specific keywords.

● With conversion-based bidding, advertisers only pay when a customer completes an action like downloading software or adding to their shopping cart.

● Google Ads also provides measurement tools to help advertisers understand how their campaigns perform. The tools include Google Analytics and DoubleClick Insights, which provide insights into how visitors interact with the website.

Here are a few facts to consider when deciding whether or not online advertising is right for your business:

  • Core searches made on Google generate 62% of all searches in the US
  • Advertisers have 46% of clicks come from the top three sites on SERPs
  • There are over 167 billion searches per month on Google
  • Google Ads PPC is used by 7.2MM advertisers, making it the most popular means of advertising online
  • It was found that of all Google ads that are clicked on, 65% have buyer-intent keywords
  • High-quality PPC clicks provide 1.5 times the number of conversions that organic search results do
About Bharat Patel

Bharat is a digital marketing expert who can help you grow your business. He has helped hundreds of companies just like yours succeed in the digital world. So if you’re looking for an experienced, knowledgeable, and trustworthy person to help you reach more customers, You’re in luck. Bharat is here to help you with your digital marketing needs.

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