Roughly 86% of consumers search for a local business online. Today, every business owner knows they have to dedicate part of their resources to make their brand available on the internet, which benefits their existing customers but also helps them acquire new ones.
And since Google owns roughly 71% of the search engine market share, it’s obvious that promoting your business on it through Google Ads is a good place to start. But Google Ads also have a reputation of being quite expensive, at least judging by the conversations we have with our clients on this very topic.
There is no straight answer to the question “how much does Google Ads cost?”, but we’ll try to explain exactly how the average cost per click is calculated in this article below.
The Keyword Has a Lot to Say
You may already know that you need to bid on certain keywords for your ads to activate whenever someone types them in the search engine. The bid reflects how much you’re willing to pay every time prospects click on your ad, but the price itself can vary.
This bidding system essentially means that more popular keywords will be more expensive per click because more businesses (and your competitors) will fight for them. And if the keywords are caught between two big companies with marketing money to spare, the maximum CPC (cost per click) can go up drastically.
Some of the most expensive keywords to date are “insurance” ($54.91/click), “loans” ($44.28/click), and “mortgage” ($47.12/click). So if you want to bid on a keyword to the likes of “buy car insurance online, ” you can expect to have to pay quite a lot for one single click, because the term “insurance” is highly competitive. Some companies can afford to do so, while others either settle for bidding less (which can affect ad position) or look for alternatives.
Of course, there are also very cheap keywords out there, but before you excitedly bid on those, ask yourself this: if nobody is bidding on them, is that a problem? Because very cheap keywords can also mean your consumers aren’t searching for anything similar. And when you take those and apply them for your PPC campaign, you can have lackluster results.
Use Google’s Keyword Planner to get a good grip of what your audience is searching for online and keep the suggestions in mind when setting up your AdWords campaigns.
How to See How Much a Keyword Costs
Before you dive straight into setting up a campaign on Google Ads, you’ll most likely want to know how much this effort will cost you and how it compares to other digital marketing options, such as Bing ads for instance. Well, there are several things that can influence the bottom line, but the best place to start is the keyword.
You can get a rough idea of how much you can end up paying per click using Google’s Keyword Planner tool. You can enter the keyword or term you plan on using, and the tool will deliver suggestions of keywords to use in your ads, based on their relevance. You should also select the country you plan on targeting for a better estimate of your ad spend unless you want to go international.
Once the tool does its thing, the table will provide a “suggested bid” column, which is an estimate based on other advertisers currently using or bidding on that keyword. This is the first indication of how much your campaign will cost, although the final price can vary.
Unfortunately, if you’re in a highly competitive industry and can’t avoid using keywords like “mortgage,” then you can expect to pay more per click than other advertisers, and there’s really no workaround.
The Devices You Target also Influence the Price
People don’t browse the web only on their desktops; they use other devices too. In fact, mobile purchases have gone up in recent years, showing that users today are more likely to be looking at your landing page from a phone or tablet rather than a desktop computer.
Because of that, you may want to target users based on specific devices that they use to browse the web. Ads showing on desktops, mobiles, and tablets can have a different CPC (cost per click), and Google will charge you accordingly.
If your small business activates in the e-commerce industry, it makes a lot of sense to target mobile device users as mobile shopping is becoming quite popular. But other industries might not have a prominent mobile audience. The only way to know what your users are browsing on is through a bit of research into your target audience. So, take a careful and close look at your Google Analytics to figure out your prospects’ shopping behavior
What Else Can Affect the CPC?
Your average CPC can differ depending on the area you target, especially since some countries have a lot more traffic than others – and more buying capabilities. It may seem unfair to know that you can pay more to run campaigns in Australia than other advertisers do to run ads in India, but the users and traffic from each country are extremely different.
- The Network
Google can show your ads on the Search Network (meaning on the SERP pages), or the Display Network, which is a group of partner websites. The costs for the Search Network are traditionally higher than the Display Network. And it makes sense: the number of potential customers is higher when you advertise on search engines than if you rely on the visitors of another website alone.
- Quality Score
Google cares a lot about user experience, and it expects advertisers to keep their websites or landing pages up to their standards. The quality score is a strategy the search giant uses to incentivize companies to focus on delivering high-quality ads. And, it works as this score has a great influence on the final CPC. If your ad has a high quality score, then your costs can be reduced, and the ad will be displayed in a better position.
Advertisers should, therefore, dedicate some time and effort into optimizing their ads to have the highest quality score possible. Even if you can afford to pay a maximum bid of $50 per click, if the score is bad, then your ad rank will suffer.
How Much Will Google Charge You?
If you’ve made it this far, then you’re probably thinking that you cannot fully control how much you’ll end up paying for running Google Ads. Not exactly.
Actually, Google will only charge you the amount of money you’re willing to pay. While the cost per click is (mostly) out of your hands, you can still establish a budget at an ad, ad set, or campaign level. Google will only run the ads as long as there’s still money in the budget. When it’s dried up, the ads stop, and you don’t have to worry about going over budget.
If you’re new at this, it’s best to establish a daily budget for all your ads to have better control of how much you spend. Because it’s a PPC system, you can get your ads in front of a large number of people and generate ad impressions. Even if impressions don’t bring a return on your investment, they can still help you with your promotional efforts.
But even if you’re in a very competitive industry, it doesn’t necessarily mean you have to pay more for using a keyword. Google allows you to bid the amount you want for a specific keyword, and won’t reject the ad because the bid amount is well under the average cost. However, if you’re paying less for a competitive keyword, your ad visibility might take a hit.
You also have the option of automatic bidding, where you let Google decide how much to bid on a keyword for you. It may be the best solution in very competitive industries since the prices can change rapidly and the manual setting basically means you have to constantly be on top of this issue. Plus, you’ll likely run several ads, with several different keywords at the same time. Changing the bid amount manually is essentially a fulltime job in some cases, so ad scheduling might make things easier for you.
While Google won’t charge you more than the budget you establish, the final cost per click will mostly depend on the keywords you need for your campaigns. Industries with high levels of competition generally will have a higher average cost, though advertisers aren’t forced to bid the average amount.
Other elements that can influence the final campaign costs include the device targeted, the network the ad runs on, quality score, and even the location targeted by the ad. Before you start running Google Ads, you should first research what the average cost of your keyword is, and how much money can you really add to your campaign budget.
Then, it’s all about optimizing the campaign and scoring the highest possible quality score to decrease costs and potentially get you a better position for the ads. If you’re looking for great Google Ads solutions, we are always here to help. Contact Australian Internet advertising today and we’ll handle everything for you.