Google Ads Costs 101: How Much to Spend to Help You Get a Better ROI
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Setting an advertising budget is key to putting your brand in front of more people, generating more clicks, and ultimately getting more sales. Google runs one of the most streamlined and effective ad platforms out there, but how much will you really spend on Google Ads? Google Ads costs vary, but there are some general rules of thumb you can stick to when setting a budget.
This detailed guide will walk you through what you can expect to spend on the Google Ads cost so that you can start to budget accordingly.
Let's get started.
Contents
How Much Will You Spend on Google Ads Costs?
Right out of the gate, we need to examine what the average small business expects for their ad spend. Google Ads campaigns vary wildly in cost depending on how aggressive you want to be with marketing. The good news is that you can set your own Google Ads budget, spending as much or as little as you like.
How much do Google Ads set you back? There is no minimum spend on Google Ads, allowing you to set a budget for as low as a couple of dollars per day.
That being said, you won't generate much traction with an ad spend this low. Instead, most businesses find that they need to seriously increase their advertising budget in order to get more eyes and clicks on their Google Ads. This can be improved with Ad Rank (more on this in a moment).
For the most part, small businesses can spend anywhere from $1,000 per month to $10,000 per month on their Google Ads costs.
This figure varies because of some of the factors that we'll cover in just a minute, including your industry vertical, customer lifetime values, and more.
If you want to see some traction with your Google Ads, prepare to drop some serious cash. After all, a couple of clicks per day (each of which may cost you somewhere in the ballpark of $0.30 to a couple of dollars) isn't going to make a huge difference for your bottom line. Prepare to go all in on Google Ads.
PPC Advertising: Spend Only for Clicks You Earn
Despite the fact that your Google Ads pricing might be more than you anticipated, there is one thing that many people don't realize about Google advertising costs: you are actually only paying per click.
The cost per click (CPC) can vary depending on the keyword searched, the type of Google Ads you want to run, and how much you're willing to spend on Google Ads.
In your Google Ads account, you can set a maximum bid for your CPC campaign. This means that you will never spend more than this dollar amount on gaining a single click.
Even if your maximum bid was $1.00, that doesn't necessarily mean that you'll pay the full bid if it isn't completely necessary. If you can win the auction without spending this much, Google Ads costs can sometimes come in much lower.
You might be pleasantly surprised to learn just how many clicks you can get with these Google Ads costs.
What Influences Google Ads Costs?
As you may have already guessed, calculating your Google Ads cost isn't as straightforward as it sounds. A lot of variation in pricing influences how much Google Ads will cost you, so consider some of these factors before you set up new Google Ads campaigns for a more realistic idea of your ad spend.
Industry Vertical with Products and Services
The first area that influences how much Google Ads will cost you is your industry. Some fields naturally lend themselves to a lower CPC while others are going to be much higher. You'll see this play out even on other platforms like Bing ads.
In general, business services are going to have the more expensive CPC because of the increased competition. As we'll learn in the next section, these customers tend to have higher lifetime values. Depending on how specific your targeted keyword is, some of these Google Ads will run around $50 for each CPC.
If a business is in a less competitive niche or area, your Google Ads spend will be much lower. The minimum you can spend would be $0.01 per click. Some of the areas where you might expect a lower CPC include arts and entertainment and other services with lower lifetime values.
Customer Lifetime Values
How much is your customer likely to spend with you over the lifetime of your relationship with them? Some industries, like legal services or business services, will have much higher lifetime values, often measured by the thousands.
As a result, it makes sense to be willing to spend more money on your Google Ads cost to get more of these high-paying customers through the door.
On the other hand, industries with lower customer lifetime values may not want to allocate as much toward ad spend.
Think of it this way: if your customer is only going to buy a t-shirt or an art print once, you might only have a $20 to $30-lifetime value.
It doesn't make sense to spend $10 to $50 per click on your Google Ads budget in this scenario, but a $1 to $2 Google Ads budget might be appropriate.
Market Trends
Every marketer needs to be up on the current trends when setting a Google Ads budget. You never know what is going to take the world by storm, and you need to be prepared to hop on the latest bandwagon if and when you can.
Keep your finger on the pulse of trends within the industry, being willing to shift and adjust your Google Ads campaign as needed.
As competition increases for a given keyword, you will find that your CPC for Google Ads may go up as well. Be prepared to adjust your Google advertising costs if you still want to show up on the sponsored section of Google.
Keyword Targeting
Google Keyword Planner is a great tool that helps you identify what people are searching for and how much you might be willing to spend on targeting that keyword.
A more competitive keyword is going to fetch a higher CPC because more people want to show up in the Google Ads search network.
While you might spend more money on these high-value keywords, you will also find that they are highly specific and may yield better ROI.
Try to balance in-demand keywords with the cost of your Google Ads campaign to determine if your ad spend is worth it on these highly competitive keywords.
Optimizing Bids and Budget on Google Ads Campaigns
Google Ads pricing varies, but you have an influential role when it comes to how much you'll spend. The Google Ads cost is, to some extent, dictated by your bids and budget.
When setting up a campaign, you can select your maximum bid for each keyword.
Keep in mind that it can be tempting to set this low to minimize out-of-pocket advertising costs.
However, if you set it too low, you will find that you aren't able to compete with others who factor in higher Google Ad spend.
If you want to show up on Google Ads, you have to set a reasonable budget based on your industry, customer lifetime value, and the competition of the keywords that mean the most to your business.
Google Search Network vs. Google Ad Display
Last but not least, you need to figure out where exactly you want your ad campaign to appear. There are two Google paid search campaigns that you can set up: Google Search Network and Google Ad Display.
Google Search Network
When most people think of advertising, they are thinking of Google Search Network which displays your ads when someone enters a search query for a targeted keyword. These tend to have higher click-through rates and may also have higher cost per click.
Google Ads determine who to rank based on a Quality Score, maximum bid, and more. They take a Quality Score multiplied by the maximum bid amount and give you an "ad rank."
The ad rank you are assigned determines what position you will show up when someone searches for those keywords.
Google Ad Display
On the other hand, Google Ad Display will put your advertisement up on websites that participate within this network.
If you have ever seen ads show up on blogs or popular web pages, you might be looking at advertisements that are part of Google Display Network.
The downside here is that the people who see your advertisements aren't actively looking for businesses like yours. They are focused on getting the information on the page that they clicked through.
As a result, you may see a lower expected click-through rate and fewer conversions, but you'll also have lower Google advertising costs.
ROI for Google Ads Campaign
Now that you know what your estimated Google Ads spend will be and what influences your budget, it's time to turn our attention to the more pressing question: Is it worth it?
Your return on investment (ROI) should be considered for any ad campaign you run, whether that is Google or local marketing.
The ROI you can expect from Google ad costs is actually quite impressive. According to research from Google Ads itself, you might see an 800 percent return on your ad spend for the Search Network.
For every $1 spent on your bids, businesses can expect to earn $8 in profit.
Conservatively, the same study found that most businesses earn about $2 for every $1 spent on the Google Display Network.
People aren't as likely to click through on these links, giving them a much lower value (but it also is likely to have lower values in the Google Ads auction).
Setting a Daily Average Budget or a Monthly Google Ads Spend
If you want to come in near the top for ad rank, how much do Google Ads require you to spend daily or even monthly? Your Google Ads cost is highly variable, but every business needs a budget. You can start with either a daily average budget or a monthly ad spend cost, depending on which is easier for you.
The Google Ads pricing isn't as straightforward as many people hope for. In fact, you'll find that you have to experiment a little bit to get the desired outcome.
Do your research ahead of time to know what keywords you want to rank for and what the average CPC is for them.
By this point in the process, you should know what you stand to gain if a customer clicks through your link and makes a purchase. If you make $10 off that sale, you might want to set a higher Google Ads cost than if you were to only make $5 off that sale.
You also need to keep in mind that not all clicks will yield a final sale.
It's hard to pin down exactly what you should spend on a daily average budget or monthly ad spend with Google. Google Ads pricing will depend on your unique business model and how much money you have to play with to test out various Google Ads cost scenarios.
Tips for Getting the Most Out of Google Ads Cost
Before you set up your Google Ads cost budget, here is what you need to know to get the most out of a campaign.
Optimizing Ads
Marketers who are new to Google Ads might want to experiment for a little while before sinking serious cash into a campaign.
Test out your proposed advertisements and see what the average CPC is for the Google ads that you want to run. You might even run multiple campaigns to see which ones perform the best.
Keep in mind that once you land a successful campaign, you can double down on your efforts here and make up for the money lost on failed campaigns.
Improving Quality Score
Your Ad Rank is highly influenced by your Google Quality Score, which is comprised of three components:
- The page's keyword relevance
- Historical click-through rate performance
- Landing page experience for the end user
Your Quality Score and maximum budget per click determine your overall Ad Rank. For those who want to rank, Google recommends that you test your Quality Score and work to improve it to see more successful marketing campaigns and Google Ads costs.
Keyword Research
As with any campaign, keyword research is essential to your Google Ads cost. Every keyword is going to have different degrees of competition which influences how much the Google Ads pricing is going to be.
Take your time exploring the Google Keyword Planner before you settle on any specific ad campaigns.
Look at the Google Ads price for both highly targeted keywords (those with intent to buy) as well as long-tail keywords that might be more general yet highly specific.
You can establish yourself as an authority with either of these options on the Google Ads platform and can bolster your Quality Score accordingly.
You may also want to look into other keyword research tools here.
Final Thoughts: Google Ads Costs
The Google advertising cost is highly variable depending on your industry, your budget, and the keywords that you want to rank for. Google Ads costs depend on a number of factors, some of which may be a little bit out of your control.
Understanding how Google determines ad costs is essential if you want to find that Google Ads work for you.
Consider some of these guidelines on Google paid ads before you sink any money into your next ad campaigns!
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