How much do Google Adwords cost?

To understand how much Google Adwords can cost, it's important to understand how Google Adwords operates and its significance in your Digital Marketing efforts. SMB'S and Large Organisations are familiar with the importance of a Google Adwords strategy and its effect in sales and lead generation. In 2019, Google's advertising revenue was over $116 billion.

When an individual has a search query, they will pop it into Google and try to get an answer to this query. Google will offer two displayed categories, the first is ‘organic’, this is the natural search query results from various websites, these are Free and usually high-quality results. They also offer solutions to the query through an advertisement, a business advertising a product or service that will be of use to the individual.  

Google Adwords results
Google My Business Local results

Google Organic Search results

In Digital Marketing, the aim of the Marketing Agency is to have you appear on page 1 of these results at the top and in first place for that specific keyword. Resulting in that individual having a  higher chance of acquiring your service or product.

A Marketer can do this through Search Engine Optimisation (SEO) which focuses on having you appear at the top of the Free listings. The other service is through ‘Google Ads Management’ in which the marketer can create the ad, research keywords, manage the keywords bid, and improve results through the Google Adwords platform on your behalf.

How does the cost of a Google Adword determine and how does it all work?

The major benefit of using Google Ads is that it will accelerate your business to the top of the search results page (much quicker than the organic listings). For example, if someone searches the term ‘electrician’, You will use your Ad that is created through the Google Adwords platform targeting the keyword ‘electricians’. You will tell Google that to get to the top of the results, it worth $1 a click to you.

So, Google will get paid every time someone clicks on the ad, this is called Pay per click (PPC). Google won't charge you if the ad isn’t clicked on.

This is where it gets complicated…

You won't be the only one aiming for that keyword, so Google offers everyone to target this keyword by bidding for it. So along comes another business or advertiser, and they input that they will pay $1.10 to get to the top of the search results. More people will do this as well, especially if it’s a popular search term.

The simple version of determining if the word is worth the value is to determine if that a person who clicks on your $1 ad will provide you with a stronger profit return. So if that $1 cost will provide a $20 profit, then we can determine if an average of 30 people click that ad per day. If only 20 people purchase, then you are getting a positive Return on Investment (ROI).

The above example is very simplistic and in identifying a Keyword valued only at $1. Various industries have much higher keyword values, they also have much higher returns in profit as well. For example, a Lawyer will have a much higher PPC Cost and higher return than an eCommerce business.

Google Ads also allows you to target ‘long-tail keywords’, the same as in On-Page SEO. These are more specific search keywords such as ‘electrician near me’ etc., this can lower or raise the cost of your Google Cost Per Click due to a lower amount of searches or higher search value. These also improve your CTR (Click Through Rate) results compared to ‘electrician’ as the people near visiting your website and now more likely to contact or hire your service.

Another component when understanding the Adwords platform is understanding the Quality Score. If the ad is well written then the Quality will be higher and in theory people click on this landing page to find what they're looking for. Google will determine the cost per click through that CTR.

How much can the AdWords cost?

Adwords can vary depending on your industry, business, and goals. On the Display network it can be around $1.00 but some of the most expensive Adwords can be over $50.00 per click.

The Top 10 Most Expensive Keywords are:

  1. Insurance
  2. Loans
  3. Mortgage
  4. Attorney
  5. Credit
  6. Lawyer
  7. Donate
  8. Degree
  9. Hosting
  10. Claim

A small business can spend anywhere from $500 to $10,000 per month with a Google Paid Search campaign while the large retailers and ecommerce sites can spend up to $50 million per year.

So what if you don’t have a Google Adwords management service for your business?

If you are a small business, then you don’t need to spend $10,000 per month for results, one of the great benefits to Google Adwords is you can place constraints on your daily google ads budget, maximum bids, etc. You can also target audiences through interests and behaviours. These can help lower costs if performed correctly.

You can also hire PPC specialists that assist with producing greater results and lowering your average cost per click, these agencies or freelancers are not always expensive. They usually charge through two main structures, Per month fee to manage Ad’s or through a % of the total Ad Spend.

Implementing Adwords for your Business

Now that you have a greater understanding of Adwords, you can decided if you would like to use the Google Adwords Specialists or teach yourself and attempt. There are some great resources to learn the platform, we would recommending starting at skillshop. There is also the Google Smart campaign option inside the adwords platform which has Google use AI to assist your ads targeting, budgeting, and advise on results.

Please Contact Us if you have any other Google Ads costs questions, we would happily provide some further clarifications.