In 2020, global advertisers spent nearly $140 billion on online advertising. Pay-per-click (PPC) advertising on Google is an important segment of this industry.

You can invest in this advertising channel using Google AdWords. Even if you don’t, your competitors most likely do. In other words, if you don’t take a proactive approach to online advertising, you could get left behind.

Keep reading to learn more about the answer to the question, “How much do Google Ads cost?”

What Is Google Adwords?

Google AdWords is the original name for what’s now called Google Ads. Google Ads advertising is another fantastic way to boost website traffic.

The platform allows advertisers to place bids on select keywords. This process enables companies’ ads to show up on different websites. Google publishes the ads using a Display Network and its AdSense program.

Google Ads is the world’s leading PPC channel. It has one of the best returns on advertising investment.

For every $1 spent, advertisers typically earn $2.

Understanding Google Ads

Google Ads works using an auction system. For instance, you’d start by selecting a list of keywords relevant to your business. Now, you can bid on them. Marketers call this complex system pay-per-click advertising.

In other words, you must specify how much you’re willing to pay when a user clicks on your ad. Google will then combine your bid with other factors.

For example, the company might combine your bid with the quality score of your ad. It will then use these calculations to figure out where your advertisement will show up in search engine results.

How Much Do Google Ads Cost?

Of course, if you’re going to invest in Google advertising, you want to know the answer to the question, “How much are Google Ads?”

Google Ads pricing will vary because the platform works using an auction system. Imagine that you’re buying a painting at auction. It doesn’t have a fixed price.

The final price of your painting will vary depending on other bids. The price will increase depending on what others are willing to spend.

Likewise, Google Ads works much in the same fashion. The cost of your ad will vary depending on the popularity of the keyword and how much your competitors are willing to spend.

Getting to Know the Google Ads Landscape

Some industries and keywords are highly competitive. Think about the difference between buying a painting from a local artist and a world-class painter.

You can set whatever budget you’d like for Google Ads. However, you may not win the best spot if your bid is too low.

The trick with Google Ads, however, is to understand that winning the best spot isn’t all about money. You need to understand the different things that go into creating effective Google advertising.

Google Ads Spending for Small Businesses

As a business owner, you must invest enough in your Google ad spend to ensure that you see meaningful results. In other words, a small budget of $100 at a time will not suffice.

If you’re lucky, you might get a handful of clicks. Still, this small amount is a waste of money.

On average, a small business should spend about $1,000 per month on advertising. We’ll take an even closer look at figuring out Google Ads campaign costs in a moment.

It’s equally as important to manage your Google Ads campaign effectively. The better you manage your ads, the less you’ll spend per click.

Finally, it’s essential to ensure that your ads resonate with your brand message. For example, you should create ads that complement the other advertising assets you must manage, like social media and other forms of advertising.

Making the Most of Your Investment

Better management equals a better return on your investment. For instance, you must research the best keywords for your business. You must also write effective ad copy.

In addition, you must design an excellent landing page. You must also constantly monitor your campaign after execution. It’s also crucial to stay current with the new features in Google Ads.

You may not have the skills to perform all these tasks, and that’s fine. Many companies hire an experienced digital marketing agency to manage Google Adwords services. A partnership with the right consultant can help you succeed online.

The Varying Costs of Advertising on Google Ads

The average price per click for Google Ads is around $1 to $2 per click. You could even spend less than a dollar on the Display Network.

However, some industries are so competitive that clicks cost $10 to $20 each. These companies might spend tens of thousands of dollars every month on Google Ads.

As a business owner, it’s vital to establish an advertising budget that’s realistic for your business and industry.

The Benefits of Google Ads

Google Ads is effective. It allows you to determine the best ad spend for your needs. Again, the platform typically delivers a return-on-investment of two dollars for every dollar you spend.

It makes sense to want to know how much it will cost you to use Google Ads to acquire customers. However, the cost for Google Ads isn’t the same for all businesses, even if you operate in the same industry.

Also, the cost for your ads can vary depending on which Google network you use. It can also vary depending on your country, your audience, and your industry.

Luckily, there are two ways you can forecast your costs for Google Ads. You may want to use the Google Keyword Planner. Alternatively, you can use Google Ads Cost Calculator.

These tools can help you plan a campaign that’s within your budget. If you see the cost of a campaign is too high, you have the opportunity to make adjustments.

Establishing an Ad Spend Budget

You must set a daily budget to use Google Ads. Your daily budget is how much you’re willing to spend on advertisements.

Using the Google Ads dashboard, you’d set up an average daily budget. You’re able to modify your budget at any time.

Google will also provide you with tools to help you optimize your ad campaign. This process will enable you to get more clicks on days when you have high search traffic. It will also help you get a higher return for your ads.

Tools for Calculating Ad Spend

Again, Google will provide you with two tools to calculate your daily budget. The first tool is the performance planner, and the other is cost-per-click (CPC).

The performance planner will enable you to optimize your budget on your current campaigns. The cost-per-click will allow you to set the highest amount you’re willing to pay for a click on your ad.

Again, you want to spend a considerable amount of money to receive a desirable return on investment for your ad spend. At a minimum, you should spend enough to generate six to ten clicks per day.

Competitive Spending Analysis

When there’s great competition for a keyword, the cost of Google Ads will increase. Increased competition will affect your bidding strategy.

It will also affect your ad position. Furthermore, more competition will affect your click-through rate and cost per click.

Suppose two businesses are vying for the same position. This competition will drive up the cost-per-click as they attempt to outbid each other.

Device-Specific Targeting

In the early stages of e-commerce, most online shoppers used a desktop computer. Today, however, many people use their mobile devices to shop online.

If your audience shops using a mobile device, you must devote a larger portion of your budget to mobile advertising. It’s important to know what percentage of your customers shop on various devices so you can spread your advertising spend accordingly.

If you show ads to the wrong device users, you’ll waste your ad spend. With this in mind, it’s critical to research CPC for your audience by device.

Understanding Quality Score

The quality score of your ad is important. It’s Google’s way of rating the relevancy and quality of your ads and keywords.

As a matter of fact, ad quality is one of the most important factors that drive your Google Ads costs. Also, it’s one of the key drivers for the success of your digital marketing campaign.

The quality of your advertisements can save you a lot of money. Alternatively, they could cost you a lot of money if you don’t design them well.

Diving Deep With Quality Score

Google bases the quality score of your advertisement on several factors. In part, it will use the click-through rate to determine your quality score.

Google will also assess your keyword relevance. Likewise, the Google algorithm will assess your landing page quality. It will also evaluate the relevance of the text in your ads. The search engine will also assess your historical Google Ads account performance.

The most important metric for your quality score is your click-through rate.

More Tips to Get More Out of Your Google Ads Spend

Google will assign a quality score to all your ads. The search engine calculates your score using the previously mentioned three factors.

Now, it will multiply your quality score by your bid. This calculation will give you your range in the ad auction.

Using this information, you must find a balance between ad quality and your advertising spend.

Forecasting Ad Spending Costs

Once again, there are two ways that you can predict your cost-per-click for Google Ads. You can use the Google Keyword Planner or the Google Ads Cost Calculator.

With the first option, you’d begin by navigating to the Google Keyword Planner Tool. Now, click on Tools, Planning, and then Keyword Planner.

Next, you’ll click on Discover New Keywords. At this point, you can enter your general industry or service keyword.

Getting the Right Results

It’s important to make sure you choose the right language and location for your search. For example, you might have a local business. In that case, you’ll want to use your city or delivery area.

Now, you can click on Get Results. The dashboard will display keyword ideas. It will list the ideas by specific characteristics, including:

• Average monthly searches
• Competition
• Relevance

It will also show you other important information, like the low range and high range bids.

Using the Google Ads Cost Calculator

The Google Ads Cost Calculator is free. You can use it to calculate the cost and potential return on investment for your Google Ads spend. You can calculate your ROI based on several factors, including:

• Ad spend
• Agency management fees
• Average click-through rate

You can also enter other variables.

The Google Ads Cost Calculator will show you how you’re spending your money. It will also help you to identify successful campaigns. More importantly, it will show you campaigns that you can improve.

Lowering Your Google Ads Expenses

The key to maximizing your Google Ads is to manage your campaign. Don’t look for keywords with high search volume.

Instead, look for long-tail keywords with search intent. You should target these kinds of keywords even if the search volume is low. You need to focus on these types of keywords even if the search volume is low.

You should also use negative keywords. These are keywords you don’t want to have associated with your ad. These keywords can unnecessarily increase your cost-per-click.

Also, use Google customer match to target your ideal audience. This feature will help you build your audience and strengthen your brand identity by creating a group using your existing email list. It will help you get more conversions.

Your Partner in Digital Advertising

Now you have a better understanding of the answer to the question, “How much do Google Ads cost?” In the end, the cost of your ads depends on how much you want to spend. As a rule of thumb, however, you’ll want to start with a $1,000 budget or more when advertising on Google Ads.

It can prove challenging to figure out the right budget to set for your Google Ads spend. We can help.

Please feel free to contact BrandLume today to schedule a consultation.