Google Ads Pricing: How Much Does Google Advertising Cost? (Pay-Per-Click Ad Charge for Advertisement)

on PPC March 24th, 2021

We know why you’re here – you have a new or existing business and you’re ready to get serious about generating leads through PPC management and other effective techniques, but you’re not sure about Google Ads pricing right?

It’s no secret that advertising through Google Ads (Adwords) is one of the best ways to drive website traffic, reach a wider audience, improve brand awareness, get more leads, and see more conversions.

There are 2.3 million Google searches made every second, after all.

But, creating a well-formulated Google Ads campaign can be daunting, especially when you’re not sure how much it will cost you and your business.

On top of that, figuring out how much of your marketing budget to allocate to your PPC campaign can be tricky, since advertising through Google Ads isn’t as straight-forward as traditional channels.

And, as much as we want to tell you right now how much it will cost to run a successful marketing campaign that’s perfectly tailored to your business, the truth is that there is no exact formula for success.

Instead, you need to have a well thought-out plan designed specifically for your company.

But, what we can do is teach you how to answer the question “how much does Google Ads cost?”, go over the factors that influence Google Ads’ costs, and discuss the different ways that you can maximize your budget so you can start getting the best results from your PPC campaigns today.

What Is Google Ads (Google Adwords)?

Whether you’re new to digital marketing or a seasoned professional, learning the basics of Google Ads (Adwords) is essential to growing a business of any size.

Before we get started answering the question “how much does Google Ads cost?”, let’s go over the basics of Google Ads.

At its core, Google Ads (formerly known as Google Adwords) is a PPC advertising platform that allows you to buy ad spots and display advertising on Google search results pages as well as other platforms that are part of the engine’s network.

You may have already noticed ads above or below organic results in the Google search engine results pages (SERPs) when you conduct a query.

Through Google Ads, companies can bid for these spots and place text adverts that are ultra-relevant to the user’s search in order to generate leads and sales online.

However, in addition to showing up in the SERPs, paid ads can also appear within other parts of the Google network, which contains millions of different websites and apps.

The purpose of these highly-specified ads is to allow your product or service to reach audiences that may already be interested in what you are advertising.

By running highly-specified campaigns, businesses are far more likely to boost website traffic and improve sales than with traditional advertising strategies.

Google Ads Pricing: Pay-Per-Click (PPC) Vs. Cost-Per-Click (CPC)

Before going any further, it’s important to clear up the difference between pay-per-click (PPC) and cost-per-click (CPC).

Pay-Per-Click (PPC)

Simply put, PPC is the model of digital marketing used by Google Ads and other networks.

PPC relies on user impressions and engagement to build brand awareness, transform users into leads, and generate sales.

Unlike other traditional and digital marketing strategies that make businesses pay a fee for their ad space (think billboards and print ads), Google Ads pricing is determined through a bidding process that’s influenced by a variety of factors.

Basically, instead of paying for space, you’re paying for clicks and the price of each click is determined by your industry, the user’s location, the keyword that triggered the ad, and dozens of other factors.

If you’re coming up with an ad budget, you’ll have to consider that there is no ‘one-size-fits-all’ model when it comes to Google Ads pricing.

The price of any given ad is dependent on many different factors, so you need to run a few tests to figure out what type of budget you need to have in order to be successful.

Cost-Per-Click (CPC)

Unlike PPC, which is the model that you use to advertise your product or service, cost-per-click (Google Ads context) refers to the actual price you pay every time a user clicks on your ads.

With that in mind, some people also use CPC to describe pay-per-click campaigns, so it’s normal to hear the phrase “CPC marketing” and similar terms.

When you create a Google Ads account, you determine your maximum CPC for each ad.

While it does affect your daily cost, remember that CPC is used to describe the price per each click.

For example, if you have a CPC of $1 and get 10 clicks per day, your daily costs will be $10.

Remember, advertising companies place a bid on every single ad, but this doesn’t mean that this is the price you’ll pay.

The Google Ads bidding system doesn’t solely rely on which advertiser wants to pay more for an advertisement, it also takes into account certain qualities about advertisers and their ads to decide who will get ad placement within the Google network — but we’ll discuss this in more depth later on.

It’s worth noting that even though the price that you end up paying for any given ad can vary significantly, it will never go above the maximum CPC that you previously set.

To get a better understanding of what the cost might be when you advertise on Google, the ad platform can tell you the average cost-per-click (among other important metrics to measure the success of your campaign) for every keyword you bid on.

The average CPC of your ads is a metric that tells you how much you pay for each click on average.

If you advertise with PPC Google Ads and have a question about how much you’re paying per click over time, you’ll want to look at changes in your average CPC.

An average CPC is determined by adding what you paid per click divided by the number of clicks your advertisement received.

For example, let’s say you run an ad and you pay 50 cents for one click and 70 cents for another, your average CPC would be 60 cents.

While CPC is not your total Google advertising cost, we can use it to understand how much we should plan on ad spend to create a total daily, monthly, or yearly Google Ads budget.

Types Of Google Ads

Google Ads allows you to take advantage of two of the world’s largest ad networks, so you need to decide how you will work with the two and split your monthly budget accordingly.

These are Google’s search network and display network.

Search Network Campaigns

These are the Google Ads that appear in the SERPs when a user types a query into Google.

When you advertise on Google within the search network, a user will see your advertisement in the search results when they make a query containing your keyword choices.

Where can you find these advertisements? They will show up either above or below the SERPs.

Not all of the search network ads look the same: they can be text ads, shopping ads, and image and video ads.

These ads are the most common method of advertising through Google Ads because they’re ideal for showing potential leads a quick and easy solution to their problem.

For example, if you owned a business that sold standing desks, you might place a Google search network ad with the keyword “best standing desk.”

When someone searches “best standing desk,” your company or product would appear in the SERPs above or below the organic search results, as long as you build and optimize your campaign properly.

Display Network Campaigns

Display network ads are different from search network ads because they don’t show up in the SERPs.

Instead, display network ads are placed across thousands of websites within the Google Network.

You might say that display network ads are more similar to traditional advertisements because they allow users to come across your brand while browsing websites, as opposed to searching for something specific in Google

For example, let’s say you are shopping online for running shoes.

Once you’re finished, you don’t end up buying the shoes you had your eye on and close the browser window.

Despite having closed the window, you notice that the same running shoes you were considering buying have now appeared in advertisements in your email inbox and on social media pages.

After seeing the same pair of running shoes again and again, you are reminded of the shoe, and eventually, end up purchasing them.

This would be a display network Google Ads campaign at its finest.

Display network ads not only help businesses seal the deal when it comes to sales, but they can also help advertisers build awareness of their brand and image.

How Much Does Google Ads Cost? (Most Influential Price Factors)

We’ve gone over the basics of Google Ads and how we are charged for every single ad.

The reason we haven’t discussed the exact Google Ads pricing and why you’re still asking the question “how much does a Google ad cost?” is because there is no one set cost for any given ad.

Google Ads costs, and the pricing on any PPC platform for that matter, can vary greatly.

There are dozens of variables that affect the price of each click or impression, so you need to evaluate these elements and figure out how to keep costs at the lowest.

Some of the most important factors that influence your Google pay-per-click cost include the location, industry, quality score, bids, and market trends.

Location

As they say in real estate, “location, location, location.”

But, location also matters when it comes to Google Ads pricing and developing your ad budget.

Where you’re displaying your Google Ads can impact how much you pay-per-click.

Your Google Ads cost can depend on the country, state, city, and neighborhood where it’s displayed.

In general, countries and cities that have higher living expenses also have a higher average cost per click when it comes to Google Ads and PPC marketing as a whole.

This is because these consumers usually have more spending power, making each keyword more valuable to the advertiser

On the flip side, the cost per click in rural areas is often much higher than in urban areas.

Let’s take the US for example. Google Ads’ cost per click in Alabama was about 78% greater than the national average in 2018.

To give you a comparison, during this same time, CPC in California was on par with the national average.

This could be because, in Alabama, there are fewer people, which means fewer local businesses.

As a result, residents are more likely to turn to Google for products and services that they don’t have in their vicinity, which can drive up the price of these terms.

Industry

What makes Google Ads such an incredible platform for advertising is that it is accessible to anyone and everyone.

So, whether you own a small local store or a large multinational corporation, you can successfully advertise through this PPC ad platform.

Google Ads campaigns rely largely on keywords – but not all words and phrases are created equal.

For example, your company’s industry can influence the cost per click of your keywords and ads.

Depending on the industry, you can end up paying anywhere from 5 cents to 50 dollars or more per click.

This about it this way: the amount of money a florist generates from each customer is a lot lower than a lawyer.

Therefore, keywords relating to law services cost more than terms used to search smaller companies that provide big-ticket items.

The price difference between industries depends on the number of competitors and how profitable the businesses are within your industry.

And, the more money businesses spend on Google Ads, particularly keywords, the more the price goes up.

Quality Score

Quality Score is Google Ads’ way of evaluating the overall quality of your keywords, ads, and website’s landing pages, among other variables.

To determine your quality score, Google evaluates three key factors:

  1. The relevance of your ad to the chosen keywords
  2. The likelihood of someone clicking on your ad (Click-Through Rate)
  3. The experience of your landing page and its relevance to your ad

A Quality Score will range anywhere from 1 to 10 (10 being the highest score).

The higher your quality score, the higher your ad rankings, and the more likely you will have a lower Google cost per click on your advertisement as a result.

Bids

How much does Google charge for ads? As we’ve already discussed, many factors play into how Google determines its ad pricing.

Buying an advert is similar to being in an auction.

As a matter of fact, the bidding process in Google Ads is also called the auction, but this process occurs in a matter of seconds.

Since there are often multiple businesses fighting for a single advertisement, each company must offer the maximum CPC that they are willing to pay to secure an advert beforehand.

Unlike a traditional auction that only accounts for the money a bidder is willing to pay, when it comes to Google Ads, the bidder who offers the most money is not always the winner.

Google uses a set of tailored algorithms, including the famous Ad Rank metric, to determine ad placement relative to the other ads within the Google Network.

An advertiser’s Ad Rank is calculated by evaluating the amount of the bid, quality score, and expected impact of extensions (details added to your advertisement) among other variables, but this number isn’t visible to advertisers anymore.

Some other factors that can influence an advertiser’s Ad Rank are the number of other bidders, time of the search, and content (such as ads and search results) that appear on the same page as the advert.

That being said, every time you want to place a new advertisement, Google recalculates your Ad Rank.

One of the most important takeaways from the bidding system is that the advertiser is the one that determines the maximum amount of money they are willing to spend on Google Ads.

However, whether or not their advertisement gets a position within Google’s network is up to the Google Ads algorithms in place at the time an ad is presented.

Current Market Trends & Seasonality

One factor to consider when you’re wondering “how much does Google Ads cost for businesses?” is the current market and seasonal trends of certain words and phrases.

Your Google Ads budget and cost greatly depend on the keywords you’ve selected for your campaign.

A keywords’ cost can fluctuate during different times of the day, month, or year.

Whether it’s “pool supplies” in the summer, or “holiday decorations” in the winter, on both a local and global scale, the popularity of words and phrases can depend on anything from the current season to the latest news headlines.

For example, during the COVID-19 pandemic, some of the most searched keywords in the United States were “coronavirus” and “COVID testing near me.”

It goes without saying that these keywords were used far less in years prior.

And, with an increase in popularity, comes an increase in price.

Use the Keyword Planner To Predict Your Costs (Google Ads Cost Forecast)

Before you start plugging different keywords into your Google Ads campaign, consider doing some keyword research first.

One of the best ways to find the most relevant keywords to your business and get an estimate on ad pricing is with one powerful tool: Google Ads Keyword Planner.

The keyword planner tool can give you both highly-tailored keywords for your advert and an estimate of both your future Google Ads cost per click and total advertising costs per month to help you figure out your Google Ads budget.

To use the Google Ads Keyword Planner, you’ll be required to enter words, phrases, or a URL related to what you will be advertising.

The planner will then search for the most relevant keywords based on the information you provided about your business.

You’ll be given a list containing up to thousands of relevant keywords which are ranked based on how similar they are to the words, phrases, or URL you provided at the beginning of your search.

Google Ads will also give you data for each suggested keyword like the average number of searches per month, competition, and top of page bids (low range and high range).

Keep in mind that the Keyword Planner only provides an approximate and this number isn’t always super accurate.

You can always partner with an experienced marketing agency to help you keep costs low and get the most bang for your buck.

Plan Overview (Answering The Question “How Much Does Google Ads Cost?” For Your Business)

Once you have selected the most relevant keywords and added them to your ad campaign in Google Ads, you’ll be able to see your plan overview.

The plan overview will take the most recent market data from the last 7 to 10 days to give you an idea of how your advert will do given the current trends and your overall Google Ads cost.

You can use Google’s forecasting tool to approximate:

  • Conversions, or the number of visitors to your website that successfully completed their goal
  • Average cost per action (CPA)
  • Total clicks your advertisement will receive
  • Impressions, or how many times your advertisement was seen by a visitor
  • Approximate monthly cost and daily budget
  • Click-through rate (CTR), the percentage of clicks generated divided by the number of impressions
  • Average CPC
  • Average Position, how your ad will rank on a page compared to other ads

You can use the information and insights from the planner to your advantage to predict how your Google Ads campaign will do in the next 30 days based on the suggested spend amount.

However, you don’t have to spend the suggested amount from the plan overview to run a successful campaign.

Next, we’ll go over the typical Google Ads costs and give you some tips on how to conceptualize a PPC budget (per month) for your specific business and industry.

Google Ads Pricing: Creating Your Ad Budget (How Much Do Google Ads Cost Per Month?)

While there is no single answer to the question “how much are you charged for a click on your Google Ads ad?,” we can give you an idea of how much businesses spend on Google Ads in general.

Many businesses spend around $1 to $2 per click (CPC) for Google Ads in the search ad network.

And, businesses spend around $1 per click for Google Ads within the display ad network.

While this may be more money than some companies want to spend per click on their Google Ads campaign (and more than they have allotted in their budget), it’s easier to justify when you find out Google Ads’ return on ad spend (ROAS).

  • Return On Ad Spend (ROAS) – Similar to ROI (return on investment), return on ad spend is the revenue a company receives after spending money on Google Ads or other PPC advertising.
  • The only difference is that ROAS is specific to ad spend, as opposed to overall investment.

Many businesses that advertise through Google Ads receive a profit of 8 times what they spent on the ad per month ($8 for every $1 spent).

While there’s no set amount that you should spend on your ads, to give you an idea of how much companies spend on their Google Ads, it can be anywhere from $500 to $10,000+ per month for their PPC ads.

But again, depending on your industry, ad rank, or any of the factors explained above, this amount can change dramatically.

Customizable Ads For Any Budget

What makes so many people choose PPC advertising, like Google Ads, over traditional advertising platforms is their ability to be customized to suit any business.

There is no required price to pay to start, making the Google Ads platform accessible to anyone from new business owners to professional advertisers.

Advertisers get to decide their ad budget beforehand, which can be revised at any time.

And, these companies can feel secure that they will never spend even a penny without being able to track where the money went and how much profit is generated.

Plus, unlike traditional advertising channels, you are only charged a fee when users click on your ad.

The platform also allows you to pause or cancel your Google Ads campaign at any time since there are no contracts or additional cancellation fees.

Finally, with the option to set your budget to as low as $1, you don’t need to invest much of your company’s budget to get started.

Creating your budget is mostly dependent on how much your company wants to spend and what you want to get in return, as well as your industry and the type of ad you choose.

Not only this, but the keywords you target directly impact your CPC, so finding variables that have little competition but high conversion rates can improve the results you get.

google ads pricing8 Tips To Save On Your Google Ads (Without Impacting Performance)

1. Increase Your Quality Score

If you want to lower your Google advertisement cost, one of the first things you’ll want to do is increase your quality score. Remember, this is affected by several factors both directly and indirectly, including social media.

Having a higher quality score is directly correlated with a lower cost per conversion.

If you want to increase your ROAS, there are a few different ways to improve your quality score:

  • Target your ad copy – Adjusts your target areas, adjust the written text in your ads and make sure they appeal to your target audience.
  • Choose relevant keywords – Research the most closely-related keywords to your ad and include them in your campaigns.
  • Improve your website’s landing pages – Create a more engaging and relevant landing page for your specific audiences.
  • A high-quality page should be trustworthy, relevant, reliable, and straightforward.

2. Start Geotargeting

One way to cut your CPC and your overall PPC budget is by focusing your campaign on the areas where your audience is located.

Businesses use geo-targeting as a way to directly advertise to users within a set geographical location.

Let’s take the example of a local ice cream shop that’s looking to get more foot traffic in their store.

If they were to advertise to the whole state or country, they may end up paying a small fortune due to the sheer number of competitors and clicks.

Ultimately, each click would likely not result in a sale, considering that it’s necessary to physically enter the shop to sell the product (ice cream).

Instead, they would make better use of their budget and have a better ROAS if they were to advertise their company to consumers within their town or county, since a local audience is much more likely to buy their product.

Through Google Ads’ targeting features, you can narrow down who sees your ads based on their country, state, city, zip code, or neighborhood.

3. Get Rid of Underperforming or Non-Performing Keywords

Examine your PPC campaign keywords to figure out which ones perform best and get rid of the search query terms that don’t bring in conversions.

Here are 3 red flags to look out for when analyzing the performance of your keywords:

  • Words or phrases without impressions
  • Ads without clicks
  • Traffic without conversions

You may notice that certain keywords perform better during certain times of the month or year.

If that’s the case, Google Ads gives you the option to pause keywords or create an ad schedule to use these keywords during peak times.

Likewise, some keywords will deliver better results

While the performance of keywords may be influenced by certain times of the month or year, keeping an eye out for these 3 factors can help improve the success of your PPC campaign.

4. Add Negative Keywords

Instead of finding more Google Ads keywords that you want to rank for, decide which words you don’t want to appear alongside your brand.

For example, let’s say you own a company that sells organic dog food and you’re running a PPC campaign.

You wouldn’t want your ad to appear when someone searches for “worst organic dog food” or “unhealthy organic dog food.”

In this case, you would add the words “worst” and “unhealthy” to your Negative Keywords list within your campaign’s settings.

At the same time, you only want your ads to show when people look for dog food specifically, so you can also add the term “cat” and other common pets to the list of negative words.

How can negative keywords lower your advertising costs? These can attract users who click on your ad, but are not actually interested in your products, so you’ll have a lower ROAS later on.

So, it’s better to include negative terms because although you might receive fewer clicks, you would weed out visitors who won’t turn into conversions.

5. Research Long-Tail Keywords

While you may want to rank with the big dogs when it comes to search queries like “business services” or “lawyer,” we’ll be honest with you — the likelihood of that happening is low, at least at first.

That’s because these are some of the most expensive Google Ads keywords in the PPC digital marketing game.

To give you an idea of these prices, in 2017, the CPC of “business services” was around $59 and “lawyer” around $55.10, and both of these have gone up since.

This means that these businesses are investing a ton of money in their monthly budget, but that doesn’t mean you need to run a successful Google Ads PPC campaign.

The secret to having a higher return on income, even in some of the most lucrative industries, is adding long-tail keywords to your campaign.

Long-tail keywords are search terms that consist of three or more words.

These allow your ads to appear when someone makes a very specific search query using more than three words, for example, “how much does it cost to run a Google PPC campaign in Seattle”.

This is because generally, broad searches are more common, meaning that they have more competition, making them more expensive.

Longer search phrases, on the other hand, are far less common, which means they have less competition.

Let’s take car insurance, as it’s one of the most expensive industries when it comes to keyword costs.

Naturally, when starting out, you would want to make “car insurance” one of your main keywords.

But, if your company is small, your ads would most likely never appear due to the number of competitors competing for the same phrase.

However, if you chose a longtail keyword that describes your business, such as “car insurance company lowest rates Tacoma WA,” you would most likely have more clicks and far more conversions.

6. Write Engaging Ad Copy

You can have the most amazing product or the best promotion in the world, but the first thing that’s going to get a user’s attention, and eventually their click, is your ad copy.

We know that you have to get creative given the number of characters you are allotted, but there are a few proven techniques that can improve your Google Ads CTR.

By writing short, yet inviting copy with relevant keywords and phrases you can persuade users that what they’re looking for is on your company’s website.

7. Use A/B Testing

The truth of the matter is, you probably won’t make the best campaign with the highest return on ad spend (ROAS) possible on your first try.

It can take people lots of trial, error, and testing to create a campaign that sees results.

One common way to find the best-performing advertisement for your business is by conducting A/B testing.

To create an A/B test, you need to create two different sets of ads advertising the same product or service.

You can also run two simultaneous campaigns, but this works best when testing a product rather than an ad style.

Once you have both sets of ads or campaigns ready, you need to run both for the same amount of time and wait until you have collected enough information to compare the two.

At the end of each trial, you’ll compare certain metrics like click-through rate, total conversions, conversion rate, costs, and so on.

The ad or campaign that shows the most results is the one you should mimic before getting

The more you go through this process, the more you can narrow down the exact features of your ad that influence clicks, traffic, and conversions – making the most out of your advertising budget.

8. Experiment With Different Bid Prices

If you want to save money, it would make sense to spend less on PPC.

However, when it comes to bidding, the lowest bidders can get stuck with undesirable ad placements – which can lead to less website traffic, and fewer leads.

On the flip side, if you always stick with a high bid, you could end up spending money without necessarily getting results.

To find the CPC that’s just right for your campaign, you can test a few different bid prices.

Take the time to ensure your landing pages are optimized to convert users in order to make the most of the traffic you receive.

Then, you would compare the results from each test to determine which price gives you the highest profit margin.

9. Modify Your Ad Schedule

After a few months of advertising your business on the Google Ads PPC platform, you’ll start to notice a few trends when it comes to traffic.

Whether you get fewer impressions in the afternoon or more impressions on the weekends, it can be helpful to follow these trends closely.

If you want to maximize your budget, one way to make the most of your money is by creating an ad schedule.

An ad schedule allows you to adjust the hours at which your ad is displayed and create price adjustments for peak traffic times.

Although Google Ads are set to be displayed all day by default, it’s easy to customize timing within the ad’s settings.

Remember not to set a rigid schedule, but test out a few different times and figure out when your audience is the most receptive.

Take The Guesswork Out Of Google Ads & PPC Campaigns

So, if you’re still wondering “how much does Google Ads cost?” and “why doesn’t Google Ads have its own pricing table?” here’s the bottom line: Google Ads’ PPC advertising model doesn’t allow for set prices.

It just wouldn’t work, but that’s what makes it so great.

Instead, pricing relies on innumerable factors that you need to adjust properly in order to get the best results at the lowest price.

But, if you want to advertise on the Google Ads ad platform you don’t have to pay an arm and a leg for your campaign.

In fact, your ad spend is completely under your control – you’ll never pay more than your set budget.

Google Ads is an incredible, customizable ad PPC platform, and with the right knowledge, you can grow your website’s traffic and revenue significantly.

The truth is, you can set your company above the rest by investing your advertising budget into the right digital marketing strategies.

Instead of spending hours on your next digital marketing campaign, why not leave it to the experts?

At Fannit, we’ve spent years successfully developing marketing plans, which include PPC advertising strategies specifically for Google Ads for businesses throughout the nation.

If you’re ready to get started or have a question about Google Ads, get in touch with our team today.

We would be happy to help take your business to the next level.