How much does Google Ads actually cost? A question that drives many new users and newcomers to the Ads platform. Even with experienced marketing departments, the question often arises: How much does the planned Google Ads campaign cost?
Unfortunately, this question often cannot be answered in a general way before displaying advertisements. Often only estimates are possible, which can at most be a guideline for the budgeting of the campaigns.
How does an auction work on Google Ads?
Most advertising spaces on Google Ads (formerly Adwords) have an auction system. In a search query, several advertisers bid against each other on the basis of a bid price. At the end of the bidding process “wins” the ad with the highest rank. The rank of an ad is determined by a combination of quality factor and bid price (CPC= cost per click).
If ad quality is low (text and landing page insufficiently optimized), the bid must be increased to achieve the same rank. If the quality of the ad is high, even a lower bid price is sufficient to prevail against the competition.
So it’s important to keep ad quality at a high level, because Google AdWords rewards relevance and pays it back through cost savings. Details of the quality factor are in this slightly older but still appropriate article Adword’s quality factor – as Google rewards relevance.
How much does Google Ads cost?
In order to answer the question, it is first necessary to determine the scope of the planned advertisements. The objectives pursued, geographical orientation and the industry in which advertising is to be run play a decisive role.
How much does an ad cost on Google?
Behind Google AdWords is a real-time auction system that determines the ad price for each click based on a ranking. So it’s not clear that you can predict the exact cost of an ad or campaign. Depending on the objectives in search engine marketing, the click price of a single request now also plays a minor role. The more important question is whether advertising costs are in a healthy relationship with an advertiser’s revenue. The key figures for this healthy growth are called CPA (Cost-per-Acquisition) and ROAS (Return on Ad Spent) and can be measured by customer lifetime value or advertising revenue.
How much does a click on Google cost?
To do this, you must first distinguish between “organic click” and “ads click”.
A click in the “organic search” is free, but requires a suitable and very well optimized page (SEO) on the topic of the search query, so that one is delivered as a result in the search results.
If, on the other hand, a website owner has booked advertisements on Google, the usual click price on Google Ads is between 0.50€ – 2.00€. In exceptional cases, click prices can also have 3-digit Euro amounts. Google Ads is an auction system in which market participants decide on the final price of an ad. If you run SEA for advertisers from a wide range of industries, you can see prices for clicks between 0.01€ and over 100€ per click.
So it’s totally dependent on the industry, the topic, and the number of advertisers, which is what a click on an ad costs. The competition determines the price of an advertising space.
How much does Google Adwords cost?
Google Adwords, no longer exists under this name. Adwords was renamed Google Ads on Jul 24, 2018. Adwords is now an advertising auction system. The target market and competition directly determine the cost of advertisements.
The cost of Google Ads depends on many conditions, here are some of the most important:
- Number and quality of keywords
- Quality of your own ads and website
- Size of the target group addressed
- Advertising strategy
So the more important question is whether You can use Google Adwords efficiently for your own business model.
Since Google Search is a perfect advertising space, the few ad spaces there are fiercely contested. Google Ads agencies help to save Google Ads costs and run the ads cost-effectively.
How much budget should be available for Google Ads (Adwords)?
Costs can vary greatly depending on the industry and your own goals. In order to calculate a reasonable budget, the following data is required:
- Search volume of each keyword
- Average / Estimated Click-Trough Rate
- Your website conversion rate
- Value of a conversion
For some values, experience plays an important role. If you have difficulties with individual points or you do not know the exact values, then we are happy to provide you with our expertise.
What billing models does Google Ads offer?
Google offers various billing models for ad placement. The CPC model is widely used.
You can configure the following billing models on Google Ads:
CPC Cost per Click
- Click price, English Cost-Per-Click
- Click prices per keyword vary greatly – depending on competitive pressure
CPM – Cost per 1,000 ads
- Cost per 1,000 impressions, English Cost-per-Mille
- Applies in the display network, e.g. advertising banners on websites
CPA – Cost per action
- Price-per-action, English cost-per-action
- The advertiser pays only when a specified action is taken, e.g. purchase of a product
- In a personal conversation, we define your goals with you and align your campaigns with them. Together with the strategy, we choose the appropriate billing model for individual campaigns.
How much does a Google Ads agency cost?
The cost of google ads optimization by an agency varies according to the effort incurred by a service provider. However, there are 3 common billing models that have established themselves on the market:
Google Ads support on a success basis
The Google Ads agency can be remunerated on the basis of achieved goals (conversion or revenue targets). The models of the different ads agencies differ, of course.
At webmastery Prange, we also offer our customers with monetary conversion goals (online shops, e-commerce) compensation on a success basis. Contact us to discuss the possible framework conditions for support on a success basis.
Agency costs measured on media budget
If compensation is not possible on a success basis, another option is to calculate the cost of a Google AdWords agency based on the media budget consumed. This is often the case when campaigns are about lead generation, branding, or product awareness, so they are not directly traceable targets.
Google Ads support on an hourly basis
If the performance-oriented models don’t agree with the support provided by a Google Ads agency, you can hire a Google Ads Freelancer or Google Ads agency for individual tasks, which perform tasks by hourly rate.
From experience, however, it can be said that the quality of work at Google Ads agencies can be poorly measured in hourly rates. Billing by hours, however, makes a lot of sense for fixed tasks, such as initial analysis or a tracking audit.
Google Ads support at a fixed price
Some agencies, especially with a focus on smaller customers, also offer support at fixed costs. Here, of course, as with all price models, it should be clearly examined what services can be expected for this and how these are provided.
Often fixed-price models ensure a more careless care by the agency. In the beginning, a Google Ads specialist needs to review the campaigns and apply ways to improve them. This binds time of employees who incur internal costs without the agency having a concrete incentive to do more than what is necessary. The fixed-price model for the agency only pays off over the length of the contract period.