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In fact, according to Google, the average advertiser on their platform earns two dollars for every dollar they spend. That means most people on the platform double their investment.
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So, how much are Google Ads costing your business? How much does it really cost to acquire a customer?
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In this article, we’ll cover the latest cost-per-click data for your businesses and how to use Google’s own tools to predict your ad spend.
This way, you’ll know what to expect and can start Google Ads with realistic goals and expectations.
Google Ads (formerly AdWords) uses an ad auction model, so there is no fixed price per ad.
Companies create campaigns and what they are willing to pay affects their ad rate (which controls whether or not their ad succeeds and is shown) along with relevance and other factors.
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Google Ads prices are consistent, depending on what your competitors are bidding for the keywords, locations, and audience you choose.
Depending on your industry, location and competition, keywords can cost anywhere from a few cents to a couple of hundred dollars.
If you target high-competition keywords with high traffic intent (and high value), you’ll end up spending a lot of money. But the potential ROI is much higher.
So businesses with high customer lifetime value and a relatively short sales process have become more competitive in Google ads.
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Insurance, online education, marketing and advertising, legal, Internet and telecommunications services are the most expensive industries, with an average CPC of $18.57 on top of insurance.
Most companies in these industries typically market subscription services where the customer pays a monthly fee for a long period of time.
As a customer is more valuable, it also increases Google Ads PPC search.
The figures below show the combined average CPC of Google Ads, Bing Ads and other SEM platforms:
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The two most expensive countries, Switzerland and Norway, charge an average CPC for paid search of $0.8 and $0.77 per click segment.
For the same reason there are significant differences in CPCs in different regions, cities and neighborhoods within the same country.
But since these higher CPCs usually indicate increased spending power, you shouldn’t avoid them until you test them and see a negative ROI.
The combined average for display and search ads shows a combined trend that mobile clicks are cheaper.
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In Q1 2019, the average mobile CPC for a digital ad was $0.42, while a desktop click was $0.73.
All this data should give you a fair idea of how much an ad can cost.
However, when you’re trying to answer the question of how much a Google ad campaign costs, looking at the average isn’t enough.
One of the biggest mistakes in starting a PPC campaign is failing to do proper research before jumping in.
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Depending on your industry, you can pay anywhere from two cents to twenty bucks per click.
To get some more relevant data, you should research the unique keywords your business is targeting in your area.
If you’re not sure what keywords to search for, try brainstorming what people typically search for to find your business.
For example, do you run a flower shop? If so, people will search for “local flower delivery” or “local florist.”
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If you still can’t think of anything, you can also use the Keyword Planner in Google Ads for free.
You can also add your home page or landing page (if you have one) to help you get better impressions based on your site:
If you have a delivery service, you must set the location to your delivery city, state, or region. For example, we can send it to New York City.
The results show average monthly search volume and top page submissions.
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If you use your homepage to filter, you’ll get a list of target keywords for the services you offer.
Historical monthly search volumes can be seen by hovering over the graph next to the average book volume.
Once you have this data at your fingertips, it’s time to select some keywords that are relevant to your business.
Check the box next to Keywords and click the “Add Keywords” button. (By default, the option is set to “Add to Project”).
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Once you’ve added keywords, you can instantly forecast your campaign costs by clicking the “Project Overview” link in the sidebar.
For a campaign targeting the five keywords selected above in NYC, Google estimates the average cost per click is $3.18.
Total cost and conversions can be taken with a grain of salt as budget constraints are not considered.
If you set up this ad campaign across the NYC area with no budget limit, you’d spend about $21,000 for 390 conversions.
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You want to use some of that budget on remarketing ads and other sites, not just spend it on a search ad.
Unfortunately, you can’t make money out of thin air, so finding money to spend on Google ads can be difficult.
If you don’t want to reinvest money into your business or take money out of your bank account to do it, it has to come from somewhere.
In fact, if you do not have money in the budget and cannot withdraw money from your bank account, you have one option:
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The easiest way to analyze a Google ad campaign is to look at the keywords report and identify keywords that aren’t performing well.
To get the best results from your ad campaign, you need to stop those keywords and spend more money on keywords that produce positive results.
If you use broad match keywords, you should add any bad keyword you see as a negative keyword.
This can also be done anywhere. Open the “Locations” tab and go to the “Geography Report” view.
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From there, you can choose how specific the breakdown should be, for example, to break down the data by state.
You may identify entire states, cities, or neighborhoods that are difficult to convert. (A competitor may be close, or you may have poor delivery policies for the location.)
Changing your bids for these locations or removing them from your campaign entirely will help you spend more of your money where it makes a difference.
It’s not always as cut and dry as analyzing a concrete number like sales from Platform X.
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So if you’re spending ten hours a week on social media campaigns, even cutting back to five hours can free up tons of room in your budget.
To calculate this, take your hourly rate and multiply it by the number of hours you spend on a task.
Let’s say your hourly fee or salary for services is $50 and you spend ten hours a week on social media campaigns.
Now that extra time and money can be invested in a new platform like Google Ads.
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Another difficult way to create a budget out of thin air is to trade one platform for another.
The trick here is to analyze specific conversion data to see which sites are taking up the most time and money with the least impact on your overall revenue.
The goal here is to figure out where you can trim the fat, where you can eliminate budgeted spending efforts that aren’t driving sales.
If you don’t have target values set, you can calculate your costs using the average lead value:
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Do the labor and costs outweigh the average lead value or gross monthly income?
A final option is to quickly audit your overhead costs in the form of tools.
Most marketers have a variety of tools they use: niche research tools, search engines, social planning, and more. There’s a SaaS tool for everything.
For example, I use dozens of tools that cost money every month: Evernote premium, Mailshake, Slack premium, Moz, and more.
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Now, if I need room in my budget, I can cut a tool like Evernote because it’s not necessary for my business. I can take notes for free. I will only miss some activities. But spending an extra $50 on Google ads might be worth it.
Try removing unnecessary tools or ones that don’t help convert users into customers and use the extra room to build your Google Ads budget.
In this post, I gave an example of how much a sample campaign would cost me per month.
Instead, you can target the same keywords but limit your budget and bid less since your budget is limited anyway.
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By targeting the most relevant ads and landing pages, you can drive sales and results with just a few hundred dollars a month as your budget.
Better to start small
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