How much do Google Ads cost?

Google Ads doesn’t have a price list. You aren’t buying a fixed advert for a fixed fee. Google sets the price of each click through an auction, and what a click costs depends heavily on the product or service you’re advertising.

So rather than a figure, this article explains how that price is set and what you can do to keep it under control.

Two separate costs

It helps to split Google Ads into two parts:

• Your ad spend. This is what you pay Google for the clicks your ads receive. It goes straight to Google.
• Management. If someone sets up and runs the campaigns for you, that is a separate cost for their time.

When people ask what Google Ads costs, they usually mean the first one, so that’s where we’ll start.

You pay when someone clicks

For search ads, you’re charged when someone clicks your ad, not when it’s shown. That’s why it’s often called pay per click. If your ad appears a hundred times and five people click it, you pay for five clicks.

Google’s auction sets the price

Every time someone searches, Google runs a quick auction between the advertisers who want to appear for that search. The more businesses competing for a search, and the more a customer is worth to them, the higher the price of a click.

That’s why prices vary so much between industries. A search from someone who needs an emergency locksmith, a solicitor or a new boiler is worth a lot to the businesses competing for it, so they bid high and the cost per click goes up. A search for something with a lower value per customer, or one fewer businesses are chasing, costs less.

The price is set by the market for your particular product or service, in your area, at that moment. It’s the same reason two businesses in the same town can pay very different amounts.

The highest bid doesn’t always win

Google doesn’t simply hand the top spot to whoever bids most. It combines your bid with how relevant and useful it thinks your ad is. It looks at:

• how likely people are to click your ad
• how closely the ad matches what they searched for
• how good the page they land on is

A well-written ad that leads to a relevant, fast landing page can appear above a competitor who is bidding more, and often pays less per click to do it. This is where good campaign management saves money.

What else changes what you pay

• Where you advertise. Targeting a whole city costs more than targeting a few nearby towns, and some areas are more competitive than others.
• Which keywords you choose. Broad terms bring in lots of clicks, including plenty from people who won’t buy. Tighter, more specific terms usually cost less per enquiry.
• Negative keywords. Telling Google which searches you don’t want to appear for stops you paying for clicks that were never going to turn into work.
• When your ads run. Showing ads only during the hours you can answer the phone can make a budget go further.
• The time of year. Seasonal businesses often see click prices rise in their busiest months, because competitors are bidding harder too.

You stay in control of the budget

You set a daily budget, and you can pause or change it whenever you like. On busy days Google may spend up to twice your daily budget, but over a month it won’t charge you more than your daily budget multiplied by 30.4, the average number of days in a month. There’s no minimum term, so you’re never locked in.

A better question than cost per click

Cost per click on its own doesn’t tell you much. What matters is how much it costs to win a customer and what that customer is worth to you.

If a new customer is worth a lot to your business, you can afford to pay more for each click than a business selling something low in value. Working backwards from that number tells you what you can afford to pay for an enquiry, and gives the campaigns a clear target. It only works if every enquiry is tracked back to the ad that produced it, which is why tracking is set up before any money is spent.

How we approach it

We start with what a customer is worth to you and what you can afford to pay for a lead. Then we build campaigns around searches that show real buying intent, track every enquiry and adjust from there. If a campaign isn’t earning its keep, we’ll tell you.

If you’re thinking about Google Ads, or already running them and not sure they’re paying off, get in touch or read more about how we run Google Ads. If you’re in Hull or East Yorkshire, see Google Ads in Hull.