Google is far and away the world’s largest and most popular search engine, attracting approximately 80 billion visits per month. This makes Google a potentially lucrative advertising and marketing hub for businesses of all shapes and sizes, across almost every industry.
Google Paid Search – also known as Google Ads or Pay-Per-Click (PPC) advertising – is an advertising platform that allows businesses to tightly control their ad spend via strict daily and monthly budgets. Successful bidders on Google Paid Search have their ads ranked at the very top of Search Engine Page Results (SERPs), potentially leading to increased click-throughs and conversions on your website.
The question is, though: How much does Google Paid Search cost? The ‘busy bees’ over here at beefound.agency have a great deal of experience writing on and delivering winning Google Ads campaigns, bringing more ‘honey’ to our clients’ ‘hives’. By the end of this article you will be better equipped to attract more, higher quality customers and clients to your site through Google Ads.
How much does Google Paid Search cost?
Whether you’re entirely new to Google Paid Search or a consummate expert, the question of ‘How much does Google cost?’ remains a complicated one to answer. Ultimately, it depends. Whilst the variability of Google Paid Search costs can make calculating your own projections a little more difficult, the flexibility of the costs can be beneficial – especially to small businesses with small advertising budgets. It’s worth taking the time to learn more about the pros and cons of PPC before deciding whether Google Paid Search is worth your time.
What is Google Paid Search?
Google Paid Search advertising goes by a few different names, including Google Ads and PPC (or ‘pay-per-click’) advertising. With Google Paid Search, businesses can bid for specific search engine keywords or phrases relevant to their industry and offering.
Keywords are common terms used by internet users when they search the web.
These bids and the ads attached to them are assessed by Google each time someone’s internet search includes a matching query – the outcome of the bidding war depending on factors such as bid mount, ad quality and page relevance; which we’ll discuss in greater detail shortly.
Should the bidder be successful in the online auction for the keyword, then their advertisement will be displayed near the top of the results on the user’s Search Engine Results Page (SERP).
The beauty of Google Paid Search cost is that businesses only pay when their ad is clicked on. Even if they win the bid and are the top ranked link on a SERP, they will only pay Google for hosting that ad if the user clicks on it.
This innovative cost structure ensures that your ad spend is directly linked to website traffic with generally high-quality intent. With such a cost structure, however, there are a lot of different factors to be aware and knowledgeable of if you want to maximise the return on your spend and minimise wasted investment. Google, for example, provides plenty of free courses educating its advertisers on how to budget for Google Paid Search, which can be helpful if you choose not to hire a professional capable of accurately forecasting your required spend and potential return.
7 key factors influencing the cost of advertising with Google
There are a number of different factors influencing the cost-per-click of your Google Paid Search Ads, which in turn will inform your budget. Learn more about setting a PPC budget on the beefound blog. Below, we take a look at the 7 factors most influential in determining how much money you can expect to spend each time a user clicks on your PPC, or Google Paid Search, ad.
1) Your industry
The more competitive and lucrative your industry, the more you will likely have to spend per click with Google Paid Search. This is in large part because keywords in popular, high-value industries with high-yield customers can foster a fiercer bidding competition than keywords relevant to other industries.
2) Your customers’ lifecycle
The lifecycle of new customers also impacts Google Paid Search cost. The higher a prospective customer’s potential yield, the longer it tends to take to move through the marketing funnel, from brand awareness to conversion. As such, you may need more than one ad per high value customer, targeting them at various points along the marketing funnel. This will of course increase your ad spend per conversion.
3) Current online market trends
The online marketplace is always in flux, as is society. Google Ads can cost you more or less depending on the state of the demand in your industry. For example, in the lead up to Black Friday, there is increased demand for products such as electronics and as such advertisers face steeper competition to get their electronics in front of potential buyers. The same goes for PPC – the stiffer the competition and demand for keywords and phrases, the more it can cost-per-click to win an ad bid.
4) PPC bid budget
With Google Paid Search, you get to set the maximum amount of money you wish to bid on each keyword and each ad. It is important to set a bid which keeps you competitive, ensuring you remain visible without overspending. It is also important to note that Google can, if permission is granted, spend up to 100% more of your set daily budget (twice the maximum amount) on your behalf, if the potential return and conversion rate justifies increasing your bid. However, it does so on the basis that your overall spend will average out to remain within your maximum monthly budget
5) PPC campaign management
How well you manage your PPC campaign will also have a huge impact on how much you end up spending on Google Paid Search ads. Google Ads gives its account holders extraordinarily detailed information and feedback on the performance of their campaigns, but it is up to you to ensure you implement this feedback efficiently to improve your performance and maximise your ROI. One of the most cost-effective means to manage a PPC campaign effectively is to partner with a PPC agency.
6) Popularity and customer intent of search term keywords
Just as different industries prove more competitive than others in the realm of PPC advertising, so too is the bidding competition on certain groups and types of keywords fierce. Shortform keywords – e.g., ‘holidays’, ‘insurance’, ‘shirts’ and ‘loans’ – tend to be the most expensive in terms of PPC bids. However, the search intent of these keywords is low – they are too broad to be of much use to advertisers wishing to target more specific intents. The more intent a keyword shows, the higher you may have to bid for it. For example, the longtail keyword, ‘All-inclusive family holiday deals in England’, may not be a hugely popular search term, but the intent of it is high.
7) The quality score of your Google ad(s)
A little confusingly, Google Paid Search cost isn’t solely about the amount of money you choose to bid. In other words, more money doesn’t always equal bid success nor higher conversion rates. The quality of your ad, the website page behind it, and how users interact with the site, are also of great importance. In fact, your Google Ad ‘quality score’ is one of the primary metrics Google uses to calculate how much it will charge your per click. The better quality your ad, the less you may have to bid on relevant keywords to appear at the top of SERPs, and the less each click may cost you.
How Google calculates the price you pay per ad-click
There are three steps Google takes every time a search is made using keywords advertisers have bid on. These steps determine whose ads will be shown and the unique cost-per-click of each of those ads.
Step one: Quality score
The first metric Google uses is the ‘quality score’ of your ad, on a sliding scale from 1-10, with 10 being the highest mark. Quality is awarded to an ad based on your ad’s landing page relevance to the keyword, how likely users are to click on your ad (based on our previous performance), and the UX (user experience) of your website.
Step two: Ad rank
Next, Google decides where ads will be placed on the SERP provided they win the bidding war. To determine your ‘ad rank’, Google multiplies your quality score by your maximum bid on the keyword in question. E.g., if your quality score is 5 and your maximum bid $5, then your ad rank would be 25. Only the ads with the highest rank will be displayed at the top of the SERP.
Step three: Cost-per-click formula
Lastly, Google determines how much you will be charged each time a user clicks on your winning ad bid. You may end up paying the maximum bid amount you’ve set, per click, but not always. Google uses one final formula to determine the CPC of your ads. It divides the ‘ad rank’ of the paid ad below yours by your quality score, and then adds $0.01 to this figure to determine your cost-per-click. E.g., If the ‘ad rank’ of the ad below yours is 10 and your quality score is 5, then your CPC would be $2 + $0.01, or $2.01.
Other factors impacting your CPC with Google Paid Search
Of course, it wouldn’t be Google Ads if there weren’t a few caveats to the aforementioned formulas. Google understands the value inherent in flexibility and live customisation of ads campaigns, and as such allows you to continually tweak and tailor your ads, your bids, and your target audience. Each of the below customisable options can affect your final Google Paid Search cost.
- Dayparting: Also known as scheduling, dayparting is the practice of scheduling your PPC campaign to only bid for ad placement at certain times of day. Different times can raise or lower the CPC of your ads.
- Geotargeting: Similarly, you can set your ads to only target users searching for your chosen keywords in a specific area – from a country to state or city, right down to just a few blocks in diameter around your bricks-and-mortar location.
- Device targeting: You can also choose to target users using specific devices (such as computers, tablets, and/or smartphones). This again impacts the final CPC of your ads.
- Alternative Ad formatting: Google Paid Search generally hosts ads on SERPs, however, there is also the option to host ads on other websites via Google Display. The latter is generally cheaper.
How to set a daily and monthly Ads budget, and choose how much to bid on each keyword
Deciding how much to bid on your chosen keywords can be tricky. It’s important to consider all of the factors mentioned above, especially your ad’s quality score and the accessibility and relevance of your landing page, before setting each bid amount. After all, whilst you don’t want to break the bank, you also want to remain competitive. You may choose to let your bids dictate your daily and monthly budgets, or vice versa
We’ve gone into much greater detail regarding how best to set your PPC budgets and bids here.
How much does Google cost per click on average?
Average costs in an advertising environment which fluctuates according to so many different factors may not be the most useful, but they can help to give you a ballpark idea of how much your own campaign may cost.
Google Paid Search ads cost, on average, $2.69 per click in 2024. This figure discounts the cost of Google Display ads (website ads) as they tend to be much lower and can thereby skew the average.
The average business advertising via PPC sets a budget of between $100 and $10,000 per month, with small businesses generally working under the $1,000 mark, and medium to large businesses setting budgets between $1,000 and $10,000.
How much does Google cost per click for different industries?
As referenced above, your Google Ads cost will depend greatly on the nature of your industry and its competitiveness. Some industries, like healthcare, home improvement, and legal services are more competitive and attract customers whose potential yield is high.
It costs more to operate successful PPC campaigns in these industries than in less competitive ones, such as arts and entertainment.
Below is a list of common industries and their average cost-per-click, cost-per-lead, click-through rate, and conversation rate.
Claiming your free £400 starter credit from Google
One of the last things to mention before we close out our guide to ‘How much does Google cost?’ is that for new Google Ads accounts there is a £400 free ad-spend credit available. To access this credit, you must be new to Google Ads.
Having set up your Google Ads account for the first time, you must launch your first campaign. Next, go to Tools and Settings on your Google Ads account page > Billing > Promotions. Once on the Promotions page, you should be able to see when your free £400 credit will become available, and which of your campaigns it can be applied to.
The incentivising credit from Google can help to reduce the first of your PPC costs.
Optimising your Google Paid Search campaign and maximising ROI with a trusted Google Partner
You will now be well aware that there is no simple way to calculate the Google Paid Search cost of your upcoming PPC campaign. So many different factors go into determining how much you should bid per keyword, how much each cost-per-click on your ad will be, and how much you should, therefore, set as a Google Ads budget.
The average return on investment for Google Ads campaigns tends to sit around the 100% mark – i.e., $2 for every $1 spent. This can however fluctuate depending on the quality of your campaign, your ads, and your website.
If unable to stay on top of your campaign – frequently analysing, assessing, tweaking and optimising it – the most secure and efficient way to achieve your Google Ads goals is to turn to a PPC management agency like us.
Discover how beefound.agency can help you reduce PPC costs, optimise your ads and their Quality Score, and get the highest return for each of your Google Paid Search bids, today.
