Previously known as Google AdWords, Google Ads is a top-rated advertisement tool. It maintains an average cost per click (CPC) of almost 1$ to 2$ on the Google Search Engine. Sometimes it is lower and higher, depending on the keyword’s competition, the ads’ quality score, and many other parameters.
As per Research, most small to medium-sized companies spend around 9000$ to 10,000$ per month on ad services from Google. So how much does Google Ads cost in 2022?
A Complete Google Ads Pricing Guide
Well, here is the summary of the Google Ads cheat sheet explaining to you all the costs involved in 2022:
What is the advertisement cost on Google?
Depending on your type of industry, the targeted audience, and the campaign involved, the costs of the advertisement on Google Ads will vary.
For example, the average cost per click on the Google Search engine costs around 1$-2$. Whereas when you use the Google Display network for advertisement, it will cost you around 1$ or even less CPC.
What Are the Google Ads Costing Factors?
The factors which determine the costs involved in Google Ads are as follows:
- Quality score
- Ranking of Ads
- Industry involved
- Competitor’s bidding
- Google Ads Network
- Campaign budget and targeted market
- Bidding strategy
- PPC services and tools
What is the Expected Costing of Google Ads?
The costs involved in Google Ads can be listed as follows:
How Does Google Ads Pricing Structure Work?
The standard charges involved in the Google Ads for any company depend on two factors, which are:
- The settings of the campaign, such as the bidding and budget
- Your company’s performance in the Google Ads auction involves your Ad rank and the Quality Score.
To summarize these two factors, we can say that the Google Ads auction uses the Quality Scores of your ads and the bid that you create to generate the Ad Ranking. It is relevant to your ad and past performance, including your landing page.
The ad rank you score is the crucial point determining the Ad’s placement in the search engine and the cost per click of your Ads.
What Is Google Ads’ Bidding, Budget and Spending?
The following are some of the general terms that Google Ads uses and the costs relating to them:
- Budget: The total amount you plan to spend on the advertisement campaign daily.
- Bid: Bid is the total amount you want to spend on every click or cost per thousand impressions.
- Spend: It is the entire deduction in the budget from Google when your ad wins any ad auction.
- Price: It is the actual amount you will need to pay for each click on your ad.
There are a few more essential terms, such as:
- Average Daily Budget: It is the amount spent daily per ad campaign. This budget will be prevailing for 30 days/the average number of days in a month.
- Daily spending limit: The maximum amount you will be charged by Google daily for your campaign.
- Monthly spending limit: It is the maximum amount that you will be charged by Google every month for your campaign.
- Served Costs: It is the cost of your ad campaign per click or impression.
How Much Does Google Ads Cost?
Google Ads is a truly customizable platform that has a flexible model. You cannot just say how much your ads will cost on the Google Ads platform.
However, most average businesses spend about 9000$ to 10,000$ monthly on Google Ads for their campaigns. Some startup businesses start with $3000 to $5000 per month.
However, the actual cost varies with each marketing campaign. In Google Ads, you will control the amount of money you want to spend on the ads and when you want to spend it.
Thus, you will be free to increase or decrease your budget whenever you need to. Hence, you will be working on a more flexible platform for revenue generation.
What Is the Industry Wise Costing of Google Ads?
The total expenditure of average companies on Google Ads is 9000$ to 10,000$. Also, the companies are free to use it in several different ways.
The factors that influence the costs of Google Ads can be the industry, the services, products and competitors.
Most companies with a high rate of CPC tend to spend more on Google ads.
For example, the industries in consumer service, education, hotels etc., spend almost 7$ to $15 per click as some keywords are highly competitive. Every business wants to keep its ad on top of Google results. Now, this increases the monthly spending of the company on Google Ads.
Some of the additional costs that may be added to the total expenditure are as follows:
Professional PPC management
If you are a business spending in PPC, you will probably hire a PPC agency to help you in the business. These agencies take payments from you to manage your ads on different advertising platforms.
Most of the PPC agencies available today charge from 350$ to 5000$ per month for managing your PPC, these charges depend on the monthly budget, excluding the spending on your ads. LSS charges 15% to 20% of the entire Google Ads budget and gives a higher ROI. Some ad companies also take a percentage of the total ad spend.
Thus, this can add a lot to your total expenditure on marketing.
PPC management software
Some software is free and paid in the market to help you manage your PPC. Some of the powerful software are WordStream, Acquisio, and Stream. Such software is optional to the users.
However, it can be of great help in evaluating ads or optimizing bids and many more. When you choose a PPC management software, generally, you will have to spend monthly or yearly.
We have discussed the costs involved in the google ads, but you must be wondering why the Google Ads cost is so high.
The following sections of this article will answer all of your queries.
What Decides Google Advertising Costs?
The advertisement costs involved in the Google Ads platform depend on several factors such as:
- Your Industry
- Recent Market trends
- Ads Bid
- Customer lifecycle
- Your Budget
- Your Targeting settings
- Specific Keywords
- Quality Score of your ads
- Ad Rank
- Ad schedule
Factors such as the industry can be changed in any scenario. However, you can manipulate the factors such as the schedule of your ads, targeting audience, and quality score of the ads.
For example, you can boost your quality score by improving the design of your landing pages, ad relevance, and appropriate bidding. Also, you can change the schedule of your ads.
What is Google Ads?
We have discussed the various attributes of Google Ads earlier. However, the fundamental question still lies in your hands, what are Google ads.
Google Ads is an advertising platform developed by Google to promote its PPC. Earlier, it was known as Google AdWords. In Google Ads, you can create advertisements. You can also bid for your required keywords.
The platform also allows you to determine the amount you are willing to spend on every click for your advertisement. The Google Ads function on the real-time auction system.
Thus, you can bid for a specific keyword. So, when any consumer searches for that keyword on Google, the search engine will show your ad on the top. It comes with a small tag on the ad to indicate that the search result is a paid result.
The best part about using Google Ads for PPC is that you have to pay only when a user clicks on your ad or cost per thousands of impressions. You don’t have to pay for every ad seen by the user, but the actual times they click on the ads on the search engine.
The Google Ads settings also allow you to fix a specific budget on how much you want to spend on your campaigns. It ensures that you can run your ad when you have won a keyword in the auction. Thus, the ad will be on the top.
In this section, we will discuss the process by which Google Ads works.
How Does Google Ads Work?
Google Ads is based on Google’s auction system, and it determines the cost associated with your ad campaign. Thus, understanding this system can help you set realistic budgets for your business campaigns.
As discussed before, Google Ads first determines the costs and ad placement by the auction model. And this bidding starts when any user searches for anything on the Google search engine.
If this search query matches any of the keywords mentioned by the advertisers, then the auction happens for that keyword. In the auction, the placement of the ad and the cost per click are affected by the ad rank.
This ad’s rank itself depends on the ad’s quality score and your maximum bid for the keyword.
The ad’s quality score combines the ad’s relevance to the specific keyword that arises in the query and the click-through rate (number of users clicking on it vs the number of times shown).
The Ad Rank can be formulated to a simple one as follows:
Ad Rank = Your Maximum bid for CPC x Quality Score
For example, suppose your maximum bidding cost is 4$ for any specific keyword, and your quality score is 8. In that case, your rank will be 32.
Also, in any auction, the business with the highest ad rank will win the top result spot for Google. Google Ads also uses this rank to predict the costs you will need for a single click.
The formula for CPC is defined as follows:
CPC = Ad Rank of the ads/Your quality score + 0.01$
Thus, this simplifies the payment system. It ensures that you will need to spend less when you can maintain your higher ad position with a good quality score.
How Can I Plan A Precise Budget & Bidding on Google Ads?
One of the most valuable benefits of using Google Ads is it gives you absolute control over your ad spend. You have direct control over variables such as the quality of your ads and the maximum CPC bid.
However, there are factors such as competitors’ CPC and the quality of their ads that you can’t control.
Thus, before going to the auction, you first have to analyze your advertisement area’s competition and how competitive the individual keywords are under your niche. Here you can keep the PPC costs down by being creative.
For example, suppose you are working in the insurance sector and want to bid on the keyword “PPC agency”. In that case, your CPC bid will probably be very high because this keyword is very highly competitive.
If you want to cut your Google Ads costs, you need to research and keep your bid on less expensive keywords. For example, you can bid for “affordable PPC agency services,” which is a long tail and can cost significantly less.
These keywords have a smaller number of clicks or low search volume. But their magnitude will often help you against competitive keywords like “car insurance” in the long run.
How Advertising on Google Ads Helps Your Business?
Knowing that the cost for Google Ads usually depends on what industry you are from, your business, business strategy, etc. They provide you with many benefits.
Enlisted are three expected benefits that Google Ads provide to a company that invests in it:
Scaling up your business
With a real-time feature that Google Ads provides, you can scale your business up once your campaign is doing well and vice-versa. For this feature to work, you don’t need to spend any specific amount of money month-wise or get into any form of contract/paperwork.
If you derive good results by putting some amount to work monthly, you can multiply the same by putting more money into it. Hence, you can scale up as much as possible with its no-limit criteria. It will help in reaching out to more people.
You don’t require any particular investment amount while running a Google Ads campaign to put Google Ads to use. You only need selected keywords, a competitive niche, etc. You can invest a small amount initially and then gradually increase it as you see results.
This way, Google Ads beats many advertising platforms that promise good results in terms of revenue but provide you with none.
Data and Analytics
While using Google Ads, you can obtain your campaign’s data and analytics. It involves the number of people who saw your ad, clicked on it, conversion rate, etc.
It even lets you figure out a strategy by telling you the time of the day your users were most active and got converted. It shows who your audience is and what their location is, and so on.
Are Google Ads Worth Investing Money?
When you are using Google Ads for your ad campaign, the worth of the money depends on several factors such as:
- Your industry
- Correct PPC strategy
- Optimized Campaign
- Target Audience
Most the businesses use Google Ads for their campaigns because Google Ads has the following benefits:
- Exact targeting capabilities
- Less cost per click
- Return on the ad spend
- The flexibility of turning the ads off or on
- Full control on running ads on desktop and mobile
- Hourly and day wise ads scheduling management
If your business predicts a high cost per click on the Google Ads platform, you should step back and redefine your campaign in PPC channels.
You can audit, or you can request any PPC agency. It can help you decide the correct strategy for you.
LSS Can Help You Create & Plan Your Google Ads
Most companies spend a lot on their monthly expenses on Google Ads. Also, you can’t define a fixed price for the amount you will need for an ad campaign because the amount you spend on Google Ads depends on you.
You can decide the lousy performance, the industry, and the tools you will use, ultimately affecting the total expenditure.
Regardless of your approach, Google Ads creates excellent advertisement methods for all businesses. Also, there are significantly fewer chances that you will lose budget on your test campaign.
We use the best industry tools at Local SEO Services (LSS). All our PPC experts are Google certified, ensuring fruitful Google Ads planning and campaign strategy. Get in touch with us for a non-obligatory Google Ads consultation today!