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A detailed breakdown of how much Google ads costs

Google ads are often highly recommended for businesses due to their remarkable effectiveness and budget flexibility, which can be customized to align with your unique marketing strategy. It allows you to reach a vast and diverse online audience, helping you target potential customers more precisely and boost your online presence.

But how much do Google ads cost? How do you make the right investment to achieve the best possible results for your specific goals and objectives? Let’s find out in this article!

Definition of Google ads and how much does it cost?

Firstly, what is the definition of Google ads?

Google Ads, formerly known as Google AdWords, is an advertising service directly provided by Google. It’s virtually suitable for most businesses when they intend to run advertising campaigns due to its flexibility and extensive reach across multiple online platforms owned by Google.

In this article, our main focus will be on the cost aspect, but it’s worth noting that Google Ads offers various other aspects to explore. For more detailed information, you can explore the article on how to create Google ads

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How much does it cost?

Based on Google, the average cost-per-click (CPC) in online advertising typically falls between $2 and $3. However, in industries such as legal, real estate, and finance, this cost can be much higher, often exceeding $10 per click. 

The cost of each successful customer search ad, known as conversion, can vary widely and typically ranges from $20 to $200. These numbers give us an idea of the expenses involved in online advertising, depending on the industry and the desired actions from customers. Overall, there is no one-size-fits-all answer to the question of how much Google ads cost.

How does Google calculate your cost per click?

In line with the article’s objective, we will explore how to manage budgets when using Google Ads. To achieve this, it’s essential to understand how Google calculates its advertising fees. Influence Agency has compiled some basic points regarding the calculation of Google Ads costs for your businesses. Let’s delve into them together!

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Google ads pricing works 

Google Ads auction determines which ads are displayed whenever someone searches on Google or visits a website that features ads. This process occurs if the search query includes keywords that advertisers are competing for through bids.

Google then selects which ads to show and organizes the ad ranking based on 3 primary factors:

  • Bid. By setting a bid, you indicate the maximum amount you are willing to pay for a click on your ad. Often, the actual cost per click is lower than your maximum bid due to various factors, such as the competition’s bids and your ad’s position.
  • Quality score. Google will determine the relevance and utility of your ad and its corresponding landing page to the user. This evaluation contributes to your quality score, which you can track and enhance within your Google Ads account.
  • Expected impact from your ad extensions and other ad formats. When creating an ad, you can enhance it with additional information like a phone number or specific site links. These are known as ad extensions. Google Ads takes into account how these extensions and other formats might affect your ad’s performance.

By improving the relevancy of your keywords, ads, and extensions and keeping a good quality score, you could still win a higher position while spending less on Google Ads than your competition.

Factors that impact Google ads costs

Keyword competitiveness 

Google ads are purchased and managed manually on its official site. When businesses want to establish a campaign, they specify the keywords they wish to target, indicate the keywords they want to avoid, and set their budget limit.

According to these matters, Google automatically assesses all the companies competing for a keyword based on various factors, such as relevance, location, target audience, etc., influencing the google keyword cost at any given time.

The highest bidder wins and appears at the top of the search engine results page (SERP). For popular keywords with a high search volume, it will be more difficult to rank against them compared to less popular keywords with a lower search volume.

At the same time, the ranking of your ads also impacts the cost-per-click. To define your CPC (cost-per-click) fee, depending on many factors, such as advertising ranking, keyword bid, advertising budget, and quality score, which is determined by Google Ads auction.

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Landing page quality 

In simple terms, the better the quality of your landing page is, the lower the cost will be according to Google’s charges, and the reverse is true as well. So, what does it mean to have a good landing page?

A high-quality landing page provides users with a positive experience, aligns with the message in your ads, and offers valuable and relevant information. When you direct traffic to engage landing pages that match your ads, you’ll gain Google’s approval, ultimately leading to cost reductions.

Ad relevance

If your ads are considered highly relevant to users’ search queries, the click-through-rate (CTR) will increase. In other words, more people will click on your well-targeted ads. Meanwhile, Google rewards effective ads by reducing the cost per click.

As a result, relevance leads to higher clickthrough rates, which prompts Google to charge you less per click. By ensuring a tight alignment between your ads and searchers’ intent, you can improve performance and reduce costs.

Dayparting

The term “dayparting,” also known as time targeting, is a tactic used to focus on certain times or days when users are more likely to click on your ad. 

For instance, if your data demonstrates that the majority of your clients make purchases on weekend evenings, running a Google Ads campaign during those hours may lead to higher click rates and, consequently, lower cost-per-click (CPC) rates. Conversely, if you advertise during less active hours when fewer clicks are expected, you might end up paying more for each click.

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Location & device targeting

There are 2 factors, such as geographic locations and devices, that also affect the spending of your ad’s budget campaign. For example, if you want to run ads in densely populated, high-income areas, the costs of Google Ads will be higher. On the other hand, targeting less competitive regions may require lower expenses. It’s clear that factors like demographics and device targeting allow you to reach the right target audiences, but also directly impact spending. 

Additionally, choosing to advertise on mobile devices like smartphones, which have higher accessibility, will lead to increased costs compared to other devices.

Pro tips for using ads budgeting effectively

Effective budget management is essential in any Google Ads campaign. By utilizing smart strategies and tools, you can maximize your advertising spend and achieve better outcomes. Here are 4 pro tips to minimize your Google ads budget:

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Do keyword research to estimate Costs-Per-Click

Before setting your budget, conduct keyword research before creating your ads. Consider whether to bid on high-traffic but competitive terms or find relevant long-tail keywords with lower competition.

Use tools like Google’s Keyword Planner to estimate CPC for targeted keywords. This will help you forecast your budget more accurately, set realistic expectations for your ad spend, and avoid overpaying per click.

Consider a basic testing budget

Don’t spend the full cost for your first campaign. Instead, break it into smaller budgets that run for short periods of time. You should allocate a portion of your budget specifically for testing different ads, keywords, and strategies. 

This testing phase is crucial for identifying what works best for your campaign and can provide invaluable insights that allow you to optimize your larger budget more effectively. Start small to minimize risks and scale up once you have identified the most effective strategies.

Analyze competitor bids using tools

Manually checking competitors the old-fashioned way can be time-consuming and inaccurate. The most efficient approach is using reputable keyword research tools like Ahrefs, Spyfu, SEMRush, or Mangools.

These websites can analyze competitor bids and understand how much others in your industry are spending on similar keywords. You’ll get keyword and ad history, real-time tracking, and recommendations tailored to your targets. However, to utilize these techniques, you need to have basic knowledge of using these tools 

Use AdWords scripts to automate bid adjustments

This is a surprising tip: Google can automatically set bids for your Google Ads campaigns. With the right setup, Google’s tools can simplify bid management, allowing you to focus on the big-picture strategy. 

However, finding the best balance for your budget requires an analytical, data-driven approach and experience with Google Ads to configure it properly. For further information, you can refer to the article on how to optimize Google Ads to perfect your ad campaign.

Consider picking a third party for assistance

Sometimes, managing Google Ads can be overwhelming, especially if you’re new to PPC or have a large-scale operation. Hiring a third-party expert or agency can provide you with the expertise needed to manage your budget effectively. 

These professionals can offer strategic advice, manage day-to-day operations, and use industry-leading tactics to stretch your advertising dollars further.

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So why is it important to choose a trustworthy third party to do Google Ads for your business? 

First of all, agencies like Influence Agency have the experience, tools, and skill set to manage your Google Ads program. They stay on top of constant changes to the algorithm and platform best practices. With strategic guidance tailored to your industry, agencies empower you to maximize your performance. 

Moreover, agencies often have more negotiating power and tactics to save your budget on a campaign as well. They have proprietary resources that enable precise testing, optimization, and monitoring of ads

Your business can focus on operations, while the agencies have the extra manpower to handle the heavy lifting of digital campaign management. To learn more about Influence Agency and digital services tailored to your business goals, click on Google ads services for the best guidance!

Conclusion

Understanding the intricacies of Google ads costs is crucial for optimizing your advertising strategy and ensuring efficient budget allocation. For those who still wonder, “Is Google ads expensive?”. The Google ads cost is influenced by a combination of factors, including your bid amount, the quality score of your ads, and the effectiveness of your ad extensions. 

By strategically managing these elements, advertisers can control their expenditures and also enhance the visibility and effectiveness of their campaigns. 

Please note that successful Google ads campaigns are not just about how much you spend, but also how wisely you allocate your resources to achieve the best possible outcomes. As you continue to refine your Google Ads strategies, keep these considerations in mind to maximize both your reach and return on investment.

Daneth RATANA
Daneth RATANA