Pay-per-click (PPC) advertising across all Google platforms is managed through Google Ads (formerly Google AdWords). Businesses can determine where their ads will be seen, what they’ll look like, and, most importantly, how much Google Ads cost.

Optimizing your cost-per-click is critical to maximizing your return from Google Ads. But how much you spend overall will depend on your industry, company size, where your ad is shown, and more.

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According to Google, the average advertiser makes $2 for every dollar spent on the Google Ads platform. With 160 billion searches per month, it’s not hard to see why. Little wonder smaller businesses ask, “how much are Google ads” – as making the most of every dollar spent can be the difference between sinking and success.

In this guide, we’ll explore how much Google ads are and what factors go into determining your Google advertising costs. Read on if you’re looking to spend your Google ads costs wisely.

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How much do Google Ads cost?

Google reports that the average cost-per-click (CPC) for the Search Network is $1 to $2, dropping to an average of $1 or less for the Google Display Network. That’s an increase from prior years – in 2016 and 2017, advertisers made on average $3 for every $1.60 spent.

Based on these scores, most small- to medium-sized businesses (SMBs) invest between $9,000 to $10,000 per month to see a significant impact. It’s a sizable sum, especially for smaller businesses. Across a year, it’s equivalent to between $100,000 to $120,000.

What matters more is how your Google Ads budget is spent. Though you only spend per click, searchers can still click on ads and not buy your product or services. Reducing the proportion of these customers compared to what you spend is the biggest challenge of Google Ads.

That can increase your conversion ratio and, by definition, your total profit.

What factors affect your Google advertising cost?

Google Ads are bought and sold manually. Companies create a company, select the keywords they’re willing to show up for, what keywords they don’t want to show for, and decide their maximum budget. You can even determine your maximum bid price.

Based on these factors, Google automatically evaluates all the companies bidding on a keyword. Factors like relevance, location, your chosen audience, etc., determine the price of a keyword at any one time. Whoever has the highest bid wins and is displayed at the top of the search engine results page (SERP).

The factors determining the price of a keyword also determine your Google ads cost.

Google advertising cost by industry

One of the biggest determinants of your Google ad costs is industry. Competition, popularity, and size of the bids collectively determine the average CPC for dozens of industries.

Here’s the data:

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There’s an almost $5 jump between the CPC from top to bottom. Because consumer services are highly competitive, ranking for the existing pool of keywords is greater than for all industries – companies need to secure every last cent.

In contrast, travel and hospitality, ecommerce, and advocacy are much less popular, leading to a lower CPC overall. The Google advertising costs of such companies are minimal by comparison.

Google Advertising costs by country

The industry isn’t the only significant factor. As a general rule, countries with high general living expenses also tend to see a reciprocal rise in average Google ads costs.

For example, in Europe, the average CPC across all search engines in 2018 was lowest in Poland (0.17) and highest in Switzerland (0.8), Norway (0.77), and the UK (0.71).

When advertising in such countries, the average order can be much more lucrative – like for consumer services, the greater payoff leads to more competition for the order made.

What factors determine Google Ads’ costs?

Factors affecting Google advertising costs include:

  • Quality score
  • Ad rank
  • Industry
  • Google Ad network
  • PPC tools and services
  • Campaign and ad settings (e.g., budgets, keywords, bid, and targeting)

How to optimize your Google Ads campaign

You’ll want to ensure your campaign is optimized to maximize your return. Here’s what you can do:

  1. Create negative keywords. Turn any keywords unrelated to your business into negative keywords. These are search terms you won’t show for. Rather than wasting ad spend on these non-revenue-generating terms, focus exclusively on terms that yield a return.
  2. Optimize your landing page. Send your customers onto a landing page that delivers on your ad. You want your message to align with the keywords on the landing page. The goal is to reduce the number of clicks between seeing your ad and purchasing the product.
  3. Use ad extensions. With ad extensions, you can significantly boost your ad’s information: phone number, reviews, description, and more. The more extensions you enable, the more space your ad takes up on the page.
  4. Monitor your metrics. Review your CPC, conversion ratio, and other key metrics to ensure your ad campaign is on track. If something is wrong, think about what you can do to improve. For example, if you’re getting clicks, but your conversion rate is low, you’ll want to optimize your landing page better.

Launch a Results-driven Google Ads Campaign

For PPC Google Ads campaigns, the Google Ads experts at Clicta Digital have results-driven experience managing & setting up Goole Ads campaigns for your business. Contact us today to schedule a free consultation!