When you set up a campaign in Google Ads, you will be asked to provide a daily budget. There is a shared budget feature, but if you’re just starting out, it’s best to give each campaign its own separate budget. But the daily budget you set does not mean Google will spend that exact amount each day. You’re giving Google a rough idea of what you’d like your daily spend to average out to at the end of the month—meaning it could exceed or fall short of that amount on any given day. Which leads us to spending limits.
Overall, the average CPC of keywords across all industries typically ranges between -2—significantly less than the averages from Google Ads and Bing listed above.
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Factors that impact Google Ads pricing
As mentioned above (and precisely why we’ve written this guide), there is no simple or one-size-fits all answer to the question of how much Google Ads will cost your business. Google Ads pricing varies depending on your industry, customer lifecycle, current trends, and how well you manage your account.
As we’ve mentioned a few times already in this guide, how much you’ll pay for Google Ads also depends on your bid. This is the maximum amount you’re willing to pay for a click on your ad. Simple enough, right? Well, as is the theme with this post, no. A few things to know:
As we’ve mentioned, Google Ads pricing varies from industry to industry, and even by subcategories within each industry. You can see the average CTR, CVR as well as average cost per click and cost per lead in 20 different industries in our paid search advertising benchmarks report. But here are some additional insights to help you decide whether you should use Google Ads.
When someone searches on Google, Google looks to see if any advertisers are bidding on keywords relevant to that query. If yes, an auction is triggered and Google enters all relevant ads into the auction. Its first step in choosing a winner is to assign each ad a Quality Score. This is a number from 1-10 determined by the ad and landing page’s relevance to the keyword, expected click-through rate (which involves your historic performance), and landing page experience.
Of course, these are just some of the hundreds of thousands of keywords that businesses all over the world are bidding on, and costs can vary widely depending on a wide range of factors. Even if you’re in an industry with high average costs-per-click, such as insurance or legal services, it doesn’t necessarily mean you’ll be forced to pay these amounts for each click on your ad.
But don’t worry. In this guide, we’re going to cover all of the variables involved in Google Ads pricing so you can understand how much Google Ads will cost for your business and how to set a realistic budget.
How well you manage your account
Setting a daily budget and understanding how it will be depleted are the most important aspects of budgeting for PPC, but it pays to be aware of how advanced targeting options can affect your ad spend. A recent study by Google showed that the average ROI on Google Ads is 800%—that is, for every spent. Of course, this all depends on how well you manage your account. You can’t just activate your ads and kick back. If you want to keep your Google Ads costs low and your returns high, you need to:
How does Google Ads determine your cost per click?
For example, you may want to dedicate more budget to Campaign A, advertising your best-selling product, than to Campaign B, which promotes content to prospective customers at the top of the funnel.
Step #1: Quality Score
Originally, Google could spend up to 20% more than your daily average budget in this manner—until October 2017 when it announced it could spend up to 100% more of, or double, your budget—if it means more clicks or conversions. This means that if you set a daily average budget of , your daily spending limit is 0. You will never pay more in a day than your daily spending limit, and you will never pay more than a month than your monthly spending limit (your average daily budget x 30.4; although if you’re not paying for Google Ads with the invoice method, you can set a monthly spend limit at the account level).
Step #2: Ad Rank
For more help with budgeting, check out our Complete, Digestible Guide to Google Ads Budgets.