Author’s note: This post was originally published in 2020, it has since been updated!
Whether you work in eCommerce or simply market your business online, you’ve likely heard of cost-per-click (CPC) advertising in which the advertiser is charged each time their ad has been clicked and the user is redirected to the advertiser’s website. CPC is the primary way that advertisers are charged when running Google Ads along with other first tier search engines, but what advertisers don’t always know, however, is how much Google Ads cost.
With CPC advertising, advertisers will typically place bids on keyword phrases relevant to their target audience. When a potential customer searches for this keyword phrase, search results will display the advertisement. Among the first-tier search engines that offer CPC advertising, Google reigns supreme. This makes sense, as the search giant controls nearly 90% of its market share and has around four billion users.
This degree of market reach is both astounding and unequaled across other online advertising venues like Facebook or Microsoft Advertising (formerly Bing Advertising). Google Ads’ dominance is such that, for many small-to-midsized businesses (SMBs), it represents the only online forum in which they advertise. In fact, of the 65 percent of SMBs that invest in CPC advertising, the vast majority utilize Google Ads. Since it can make up a majority of your online advertising, how much Google Ads cost becomes an important consideration.
Unfortunately, there is no simple answer to this question. You may read online that Google Ads average between $1 and $2 per click. For SMBs, this can come out to $9,000 to $10,000 a month. That’s not chump change for anyone, much less a small business.
If you wonder why so many businesses fork over that kind of cash, consider this: Google Ads offers an average return of $8 to every $1 spent on advertising. That’s a lot of “averages,” however, and it doesn’t tell the whole story. To learn the truth of Google Ads’ cost, and how this investment works, requires a little more digging.
Google Ads Cost By Campaign Type
As stated above, how much Google Ads cost depends on your targeted keywords. If you want to target a keyword like “insurance,” for example, get ready to lay out some cash. As the most expensive keyword, “insurance” has cost as much as $54.91 per click. Keyword bidding aside, the type of campaign you choose determines the way in which your charges accrue.
Your Google ads cost will accrue differently based on which of the six types of campaigns you pursue. These campaigns include:
- Search ads
- Display ads
- Discovery ads
- Shopping ads
- YouTube ads
- Performance Max
The type of cost associated with each appears in the table below.
|Campaign Type||Cost Options|
|Display||CPC, Viewable CPM (cost per mille or cost per 1,000 viewable impressions)|
|YouTube||CPV for video discovery ads and instream ads, CPM for bumper ads and instream ads|
Google Search Ads
The most basic of Google Ads, search ads display within Google search results. If you perform a search, you will typically see at the top of the page sponsored links marked as ads. Search ads are CPC and have the benefit of display in the same spot searchers look for information. The shared format of these ads and standard search results helps ensure users see them. The familiar look also encourages more clicks.
Google Display Ads
Google has a network across various industries that appeal to a wide range of audiences. These websites have opted into Google Ads to display advertising across the Google Display Network. Website owners receive payment per click or impression.
For advertisers, Google display ads put content directly in front of audiences while they visit a website of interest. Display ads typically take the form of images that draw the eye away from a site’s written content. Display ads determine price through CPC or viewable cost per mille (CPM). CPM measures cost through viewable impressions. Viewable impressions occur simply as the ad appears, and do not require a click. For CPM advertising, Google Ads cost a set amount per 1,000 impressions.
CPC determines the cost of one of Google’s newest types of advertising, Discovery ads. These are native ads that appear across multiple Google-owned properties, including the YouTube homepage, Google Discover feed, and Gmail feeds. Visually compelling and designed for mobile devices, these ads rely on the “power of intent.” This means that Google uses information derived from a customer’s site visits, video viewing, map searches, and more to determine the content of the advertising. Learn more about why we love Google Discovery Ads at Tuff.
Highly targeted marketing like this has an obvious benefit in that it should automatically appeal to customers’ tastes. At the time of its launch, Google announced that Discovery ads would reach a global audience of 800 million users.
These types of ads allow you to promote individual products or lines, rather than a brand as a whole. Like other types of Google Ads, these appear on search engine results when a customer searches for a product or service.
For example, if you were to search for “running shoes,” you might see a detailed ad on the right side of your screen for Nikes. Shopping ads can include prices, photos, and customer ratings. As with other types of search ads, these Google Ads run a set CPC.
YouTube video ads open up a vast marketplace for advertisers engaged with Google Ads. In fact, YouTube represents the third-most visited website in the world, behind only Facebook and Google. There exist many types of YouTube ads, most of which appear either before or during viewable content.
The cost of YouTube ads depends on which type of ad you run. Video discovery ads are cost-per-view (CPV), while bumper ads are CPM. Instream ads that run while the viewer engages with a video can be either CPV or CPM.
However you can also choose to use a Maximize Conversions bidding strategy when utilizing conversion optimized YouTube campaigns known as Video Action campaigns. In the case of Video Action campaigns, advertisers are charged by CPC.
Performance Max is the newest campaign type revealed by Google Ads in early 2022, and it relies heavily on algorithmic bidding. It also requires advertisers to input a wide variety of assets including video, display graphics, shopping feeds, and even search copy. With all of the assets given to the campaign in an ‘asset group,’ Google uses its algorithm to determine when and where to show ads created with combinations of the assets provided.
Performance Max campaigns are currently charged by CPC, but advertisers are not allowed to set their own CPC. Instead, advertisers can choose between Max Conversions and Max Conversions Value bidding strategies with or without a target CPA. Learn more about how Tuff clients are leveraging Google’s Performance Max campaigns.
Here’s how Performance Max can use similar assets in different formats – both on the Discover and Youtube placements.
Google Ads Cost By Industry
You might assume that since you know the average CPC of Google Ads, along with the method for measuring cost, you’re ready to build a budget. In reality, this is not the case. As illustrated in the example of “insurance” mentioned above, Google Ads cost vastly more or less across different industries.
Below, you can see a table that compares the CPC of Google Ads from search campaigns across various industries. The data for this table was taken from actual Tuff-managed search campaigns from January 2021 – May 2022.
|Industry||Average Search CPC based on internal data|
|Career & Employment||$2.91|
|Online Health Providers||$2.65|
This table is not meant to be exhaustive and only includes a handful of the countless number of industries in which companies are utilizing Google Ads to market their businesses. However, this snapshot could give you an idea of what to expect if you are in one of these industries looking to begin advertising with Google Ads.
You can also expect that Google Ads costs will differ widely within the same industry. For example, in the fashion industry, “activewear” and other exercise-related terms appear near the top in terms of cost. In this case, you can tie the difference to societal factors. In the wake of Covid-19, personal fitness saw a boom, as it gave consumers an excuse to leave their homes for a walk or run.
This provides an important lesson: when the time comes to estimate the cost of your Google Ad campaign, you’ll need to consider a wide array of factors.
How to Estimate the Cost of Your Google Ads Campaign
To better understand how much a campaign or specific keyword will cost, you can employ Google Ads’ Keyword Planner. It’s important to understand that Google Ads’ cost is determined through ad auctions. As the advertiser, you set the maximum CPC you will pay. This bid then gets compared to the bids of other advertisers who targeted the same keyword. The higher your bid, the better your ads’ placement in the campaign type of your choosing.
Before you start bidding on keywords, you will want to use the Keyword Planner tool to help outline your Google Ads cost. This tool allows you to search for specific keywords and see their historical cost, along with cost forecasts.
Google’s Keyword Planner essentially reveals the industry benchmarks for your targeted keywords. Remember, if you want better placement in search results, you will need to bid higher than the benchmark provided in the average CPC. Keyword Planner also estimates the number of clicks and impressions your ad will receive on a daily basis. Between this and your CPC bid, you can easily derive an estimate for the cost of your campaign.
Once you define your targeted keywords and get an idea of their cost, you can create a daily or monthly budget for your Google Ads campaign. These budgets represent the maximum amount of money you will pay for a campaign across the chosen time period. This ability to control your ad spend makes advertising on Google a safe bet for your budget. Once you set your maximum bid and budget for Google Ads, you’ll suffer no surprises from unexpectedly high bills.
Quality represents one final factor of Google Ads’ cost. In fact, the quality score ranks alongside your maximum bid as one of the most important factors that influence your AdRank, or the placement of your ads.
Google determines your quality score based on the relevance and quality of your advertising. More clicks on an ad will give you a higher overall Quality Score. Curious about how to raise this all-important score?
There’s really no secret to it. If you create compelling ads with relevant keywords that deliver what the searcher expects, you’ll do just fine. The quality of your landing page will also affect your Quality Score, so make sure your website offers a compelling experience for its visitors.
The Cost of Google Ads: It’s All Up to You
As you can see, many factors can influence Google Ads’ cost. Some of these come from clear-cut choices, such as the type of campaign you run and your maximum bid at an ad auction. Other things, such as industry competition, are outside of your control.
Though you can’t control the cost of popular keywords, you can absolutely plan a campaign around creative phrases that precisely target your market. All it takes is a little research, some time on Keyword Planner, and a daily or monthly budget that reflects your means and goals. Put work into these, and you’ll start seeing those 8-to-1 returns before you know it.
Is $500 enough for Google Ads? ›
Google Ads Budgeting
For most companies starting out, $500-1,000 a month in PPC ads may seem like a lot of money. In reality, that budget is a little low. Unless you're running a local pizza shop, $500 isn't going to go very far. Most industries have a $80-300 cost-per-lead when they are starting out with PPC.
Google Ads pricing varies and is determined by several factors. However, the average Google AdWords cost per click is between $1 and $2 on the Search Network(search results). The average CPC on the Google Display Network(on other websites) is under $1.How much do Google Ads cost 2022? ›
Average cost per click in Google Ads, 2022
As such, higher click-through rates are typically associated with lower costs per click. The average cost per click in Google Ads in 2022 is $2.96.
The $500 Google Ad credit for new accounts created through Ampd works by spending $500 then getting up to $500 in Google Ad credit. If your account qualifies for this credit, Google will automatically apply this to your account and your ad spend will draw from the credit.What is a good budget for Google Ads? ›
If you're a beginner, try an average daily budget of US$10 to US$50. Check your account daily after applying a new budget to see how your campaigns have performed. You can set a shared budget with the amount you're willing to spend across multiple campaigns for the same client.Is paying for Google Ads worth it? ›
Google Ads can be worth it for small businesses. There are a ton of benefits advertising on Google can offer including the ability to reach targeted and motivated audiences, a pay-for-performance pricing model, and an easy-to-track ROI.Why is Google Ads so expensive? ›
Competition. First and foremost, competition is the main force behind the high cost of Google's PPC advertising program. As you might expect, there are countless businesses and individuals who would love to have the coveted top spot on Google's search results.How much does a 30 minute ad cost? ›
TV ad prices for daytime programming range from $500 to $4 per second of airtime; primetime programs can run from $1,000 to $10,000; network commercial rates can be as high as $25,000 per 30 seconds for sports events like Super Bowl.How much is Google Ads Monthly? ›
|PRICING FACTOR||AVERAGE COST|
|CPC (Google Search Network)||$1 to $2 per click|
|CPC (Google Display Network)||$1 or less per click|
|Professional Google Ads Management||$350 to $5000 or 12-30% of ad spend per month|
|PPC Management Tools||$15 to $800 per month|
Short answer: Google Ads budgets should be between $1000-$10,000/per month for small businesses. Long answer: Your Google AdWords budget depends on your industry, current market trends, your customer's lifecycle, and—of course—how you manage your Google Ads account.
Do Google Ads work on a small budget? ›
On average, Google Ads generate two dollars for advertisers for every dollar spent. And the best part is: there's no minimum budget, and you only pay when a user clicks your ad.What is cheaper than Google Ads? ›
For B2B businesses, alternatives to Google Ads are LinkedIn, Bing Ads, Infolinks. For businesses with a low budget, alternatives to Google Ads are sixads, Bing Ads, Facebook Ads, Instagram Ads.Why did Google Ads charge me $50? ›
When you create a new Google Ads campaign, your account is automatically charged $50 to cover the costs of creating your campaign. This $50 is not a charge for using Google Ads - it's simply a one-time fee to help cover the costs of creating your campaign.What is the minimum deposit for Google Ads? ›
There is no minimum spend on Google Ads, but it's nearly impossible to benefit from a $2 or $5 as a daily budget.Do Google Ads work for small business? ›
Yes, Google Ads Works. It works for small businesses and large businesses alike. Paid ads are a great way for businesses to increase brand awareness, get more traffic to their site, and generate more sales, all while being able to track the results.Is Google Ads cheaper than Facebook? ›
Facebook ads tend to be slightly cheaper per click than Google Ads. A business in the apparel industry might pay as little as $0.45 per click on a Facebook ad. Finance and insurance is the most expensive type of business to advertise on Facebook too, but the average CPC is still only $3.77.What are the negatives of Google Ads? ›
- You Can End Up Paying for Poor Quality Clicks – Okay, so we've about how this can be an advantage as the traffic is more relevant. ...
- Competitive Market – If you aren't too sure what you're doing and you're in a competitive industry, you can end up spending a lot of money per click.
The U.S. Small Business Administration recommends spending 7 to 8 percent of your gross revenue on marketing [source]. There is also a general rule of thumb that you should aim at spending between 2-5% of your sales revenue on marketing.Is it better to advertise on Google or Facebook? ›
Google Ads can be faster to get started with and have a wider potential reach than Facebook Ads, but Facebook Ads can offer more nuanced targeting with its pixel and potentially much more powerful tracking insights than Google Ads.What's a good cost-per-click? ›
What is a good CPC rate? A good CPC (cost per click) rate is determined by your ROI on the spend. If something costs $1, you want to make at least $1.20 back (at a minimum). A really good CPC rate would be to get $2 back for every $1 spent.
Why is Google Ads so difficult? ›
There are many challenges to learning Google Ads and creating a successful campaign. Some of the more common problems are failure to determine your audience and keywords correctly, difficulty describing what makes your business unique, missing information, and a website that doesn't work well on mobile devices.Does Google Ads charge daily or monthly? ›
Currently, you can't set a monthly budget within Google Ads. However, you can use your average daily budget multiplied by the number of days in the month to determine what your monthly spend will be.How much is a 1 minute commercial? ›
AVERAGE COST OF A TELEVISION COMMERCIAL
To summarize, the average cost of TV commercial production ranges from about $1,200 per minute to somewhere north of $100,000. Typical commercials in the markets our studio serves are generally in the neighborhood of $1,500 to $20,000 for most projects.
If you want to maintain current revenue amounts, then 5% to 10% of sales allocated toward advertising may suffice. If you want rapid growth, then you may need to push that number higher, possibly to 20% or more depending on the industry and type of business you operate.What is the cheapest ad service? ›
In June 2021, the average cost-per-click of ads on Amazon in the United States was $1.20. A year earlier, it was 0.79, a growth rate of nearly 52%. This makes Amazon the cheapest advertising platform out of all four, but it's only a relevant option for companies that sell products.How many clicks per day on Google ads? ›
Ideally, we recommend a minimum of 15 clicks per day per ad group (not campaign) and at least 200-300 clicks on the keywords per month. If you are not getting this many clicks per day per ad group, then you need to think twice about your budget and campaign setup.How much does it cost for a 30 second ad? ›
60-Second TV Advertising Cost by Market in 2020.
Google Ads is Google's pay-per-click (PPC) advertising solution, which allows businesses to bid on keywords for a chance to show ads in Google search results. When using Google Ads, you only pay when someone clicks on your ad to visit your site or call your business.Is $5 enough for Facebook ads? ›
The truth of the matter is that anyone can build a successful Facebook ad campaign with just $5 per day. If you run the ad continuously throughout the month, you're looking at an advertising budget of between $150 and $155 per month.Why are Google Ads not profitable? ›
If you haven't got the right keywords, your Google Ads account won't be profitable - simple as that. Keywords determine whether your ads will receive a sufficient number of clicks to convert into a sale. The keywords you choose need to be sufficiently searched in order for your ad to appear and then be clicked.
Which platform is best to run ads? ›
- Google Search.
- Google Shopping.
- Facebook and Instagram.
- Microsoft (formally Bing)
Go to your Google Ads account Preferences. Click the Account Status section to expand it. Click Cancel my account.Why did Google take $1 from my account? ›
If you just created a Google Payments account to make your first purchase or added a new card to your Payments account, you may see a $1 charge. This is to make sure your card is valid. It'll be removed and you won't be charged.Can I do Google Ads myself? ›
To create your Google Ads account, you'll need an email address and website for your business. Even if you don't have a website, you can still advertise on Google using Smart campaigns, the default Google Ads experience for new advertisers. You can also create your first ad in just 15 minutes.How do I get $350 threshold on Google Ads? ›
- Sign in to Google Ad Manager.
- Click Payments. Payments info.
- Next to "Payment schedule," click the "edit" icon.
- Fill in your desired payment threshold value in box labeled "Increase payment threshold".
- Click Save.
Even better, Google will pay you for clicks, impressions, and other interactions with the Google ads you'll display on your site. For more details on the revenue you can generate with AdSense, read our entry on earning with AdSense.How much of your budget can Google Ads spend in a day? ›
For most campaigns, the daily spending limit is your average daily budget multiplied by 2. On a given day, your campaign might spend up to twice your average daily budget to take advantage of fluctuations of traffic.How much money do you need to run ads? ›
There is also a general rule of thumb that you should aim at spending between 2-5% of your sales revenue on marketing. If your revenue were $1 million per year, your advertising and marketing budget should be $50,000 annually based on the 5% of sales revenue rule.Why Google Ads isn't reaching your full daily budget? ›
There are a few reasons for this: It takes 1-2 days for newly created or edited ads to be reviewed to ensure they meet all policy requirements. For campaigns using automated bidding strategies, there may be performance fluctuations or changes in spend as Google Ads learns to optimize towards your set goal.Can I run a Google ad for one day? ›
To schedule an ad to run from the end of one day through a portion of the next day, you'll need to create an ad schedule for each day.
Is $1 a day enough for Facebook ads? ›
That means for just $1 per day, you can get 37k impressions from people who wouldn't have otherwise seen your ad. Spending $1/day on Facebook ads is a great way to get started with Facebook ads and get familiar with how Facebook ads work.How hard is it to run Google Ads? ›
There are many challenges to learning Google Ads and creating a successful campaign. Some of the more common problems are failure to determine your audience and keywords correctly, difficulty describing what makes your business unique, missing information, and a website that doesn't work well on mobile devices.