Hurry... we can only help 2 new clients in February

JRR Marketing Main Logo for Digital Marketing

How Much Do Google Ads Cost? 5 Simple Ways To Profitably Pay Less

how-much-do-google-ads-cost

As a business owner, you’re always looking for ways to save money. Google Ads is no different.

There are a variety of ways you can lower your costs and get the most out of your budget.

And there are many factors to consider when understanding the cost of Google Ads.

To start, the industry that you operate in will have an impact on your estimated budget.

Certain industries, such as finance (loans), insurance, gambling and alcohol, tend to be more costly than others not considered sensitive by Google.

Additionally, advertisers in professional services, such as law, accounting and real estate, are prepared to shell out a premium because of the potentially lucrative revenue each individual customer can bring.

As such, the cost per click (CPC) tends to be higher (sometimes over $50-$100 per click) in these verticals than in other less profitable niches.

chart depicting the average cost per click (cpc) benchmarks for various industries. the chart displays a list of industries and their respective cpc values, with attorneys having the highest cpc and real estate having the lowest.
A chart demonstrating the average cost per click cpc benchmark for each industry

Another factor of Google Ads cost is seasonality.

Certain industries, such as retail and travel, often experience more spikes in ad spend during certain times of the year (e.g. Black Friday or summer holidays).

Therefore, it’s important to consider these seasonal trends when budgeting your Google Ads campaigns so that you can take advantage of them.

All that being said, the quality of your Google Ads management often has the most impact on your profitability.

That’s why it’s always important to consider finding a Google Ads specialist that can run your ads for you to squeeze out the most profit.

How does Google’s daily spending work?

Google Ads uses a daily budget to determine how much you are willing to spend in total for an ad campaign.

The way it works is that your daily budget determines the maximum number of clicks or impressions per day that your ads can receive.

Once your ad campaigns hit this limit, they will stop showing until the next day when the budget refreshes.

This daily budget also helps determine your average total spend each month.

For example, if you have a daily budget of $30, and you run ads for 30 days in a month, then your estimated monthly spend would be $912 (because Google calculates your average daily budget x 30.4).

However, it’s important to remember that the actual amount spent may differ from the estimate.

Google will strive to spend as close to your budget as possible, but it may spend more or less depending on the bidding process.

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 concept is called overdelivery.

Don’t worry, though — in most cases, Google won’t charge you for more than what you’ve set as your monthly limit, and it will automatically provide credit if your overall cost exceeds that amount.

Of course, there are exceptions to this.

I’ve experienced this first hand when a client had a maximum budget of $400 for the month, yet they managed to spend $1,000 in a day.

Thankfully it was automatically credited back to the account. Bear in mind this almost always never happens.

a line graph depicting daily spending on google ads over time. the horizontal axis shows the days in 2-day increments, while the vertical axis shows spending in 10 increments. the graph displays the fluctuating costs of google ads on a daily basis.
Source: Google

Now let’s get into those profit-squeezing tips I promised. By following these 5 tips, you’ll be able to pay less for Google Ads while also profiting more and eliminating wasted ad spend.

1. Use keyword match types wisely

Keywords are the foundation of every Google Adwords account. To get the most out of your budget, you’ll need to be strategic in using keyword match types.

As you know, there are four types of keywords on Google Ads:

  • Broad match
  • Phrase match
  • Exact match
  • Negative keywords

The broad match type is an incredible tool for a few reasons. Firstly, it’s great for casting a wide net to explore new top-of-funnel (ToFu) keywords you hadn’t thought of before.

Secondly, it’s a great tool for eCommerce smart campaigns when you already have an established customer acquisition cost (CAC) or return on ad spend (ROAS).

Lastly, broad match keywords are a powerhouse for brand awareness campaigns. But typically, only larger companies have the luxury of running these campaigns; nonetheless, it’s something you can always have in your back pocket.

If you’re not careful, broad-match keywords can get you into a lot of trouble (budget-wise). So be sure to use them with caution in conjunction with carefully managed negative keyword lists.

Phrase and exact match are typically the go-to match types for most advertisers looking to squeeze more profit out of their campaigns.

a visual representation of keyword match types for the keyword "lawn mowing service". the image shows three different match types - broad match, phrase match, and exact match. broad match is a loose matching option, while phrase match offers moderate matching, and exact match is the tightest matching option.
Source: Google

These match types help steer Google’s algorithm in the right direction and help you refine your Google Ads quality scores, unlocking discount potential.

My optimal approach to keyword usage is phrase matching combined with negative keywords.

This allows me to dictate which searches my ads will appear for and limit unnecessary expenditure on irrelevant queries.

2. Group your ad groups by theme

Similar to the way you would organise keywords, you should also group your ad groups by theme.

It’s a good idea to create BOFU (bottom-of-funnel) ad groups that are tailored to the customer journey.

This will help Google Ads understand your ideal customers’ search intent and better match their queries to the most relevant ad.

the image depicts a marketing strategy known as the single theme ad group (stag) method. it shows three separate ad groups, each with its own keyword and ad copy. the first group is for an it consulting service, the second for fast business it services, and the third for fast business tech support.
Graph explaining single keyword ad groups in google ads

As a byproduct, you will likely increase your keyword quality scores (QS), which will allow you to get up to 50% discounts on your CPCs.

At the same time, you’ll ensure that customer queries are matched with content tailored to their intent, which will help increase your click-through rates (CTRs).

3. Set up conversion tracking

Let’s be real: if you’re investing in Google Ads, you want to make sure they’re actually working.

That’s why tracking conversions is essential. It may seem like just another chore that needs to be checked off the list, but if you don’t do it, you’re better off not running ads at all.

Google needs conversion data to pivot its algorithm to improve targeting for your campaigns. This is especially true for eCommerce campaigns.

By setting up conversion tracking, you can see which keywords, ad groups, and campaigns are actually working — and then optimise accordingly.

Luckily, setting up conversion tracking for Google Ads is pretty straightforward. All you need to do is add the specific HTML code on your site’s thank-you page or checkout page and enable auto-tagging for your campaigns.

image of of whatconverts dashboard displaying tracked leads this week. top lead sources and leads by product are shown, highlighting the success of lead tracking efforts. this valuable tool helps businesses improve their marketing strategies and boost conversions.
Source: WhatConverts

I highly recommend using something like WhatConverts (I’m not affiliated with them) to streamline this process.

4. Spend quality time in the account

Although I don’t recommend micro-managing your account every waking moment, I do recommend spending at least 4-8 hours in your account once every two weeks.

Google Ads can be a fickle thing, so you need to be familiar with the technical workings of your account and the changes in the marketplace.

Every search query is a bidding war, with up to 100 contenders hoping for the top spot.

So it’s important that you gauge industry trends and have realistic expectations on how Google Ads actually works.

You should take the time to review your keywords, ad groups, campaigns and conversion performance to make the pivotal changes required in your account.

This will help ensure everything is running smoothly and nothing has gone awry due to new algorithm updates.

It’s also important to remember that Google has a long learning curve — it can take up to 4-6 weeks for the algorithm to really understand your campaigns and start optimising them accordingly.

If, in that 4-6 weeks, you haven’t guided the algorithm in any way, it can take even longer to see the desired results you’re looking for.

5. Experiment over and over again

I’m a firm believer in the power of experimentation. In fact, the key to success with Google Ads is experimentation. The more you experiment, the better your ads will perform.

Test new campaign types, such as the Performance Max or dynamic search campaigns to see if you can uncover any new opportunities.

a screenshot of the "experiment" section in google ads. the options to start a new experiment are highlighted, including "unblock categories", "unified pricing rules", and "native ad style". these options allow advertisers to test different settings and strategies to optimize their ad campaigns.
Source: Google

It’s also a good idea to test different ad copy, landing pages, bidding strategies and remarketing tactics to see which ones deliver the best ROI.

The great thing about Google Ads is that it’s easier than ever to try out something new without breaking the bank — so experimentation is the key to staying ahead of the game.

And if it doesn’t work out, you can always go back to what you were doing before.

So, how much do Google Ads cost?

When it comes to the cost of Google Ads, there is no simple answer.

I highly recommend checking out this simple Google Ads budget calculator to get a gauge of how much Google Ads will cost you.

Google Ads can be costly if you don’t have a clear strategy in place and are not optimising your campaigns on a regular basis.

However, with some time and effort invested into setting up and managing your account, you can make Google Ads work for any budget.

Google Ads is an investment, not a cost

It’s important to understand that Google Ads is an investment. It takes time to build up the algorithm so that it learns your audience and average CPAs/ROAS figures.

Over time, you’ll be able to create predictability in your business and learn to use Google Ads as a consistent revenue stream for new drumming up new business.

At the beginning, I recommend setting up conversion tracking as well as spending quality time (8-10 hours every fortnight to optimise its performance.

By following these 5 tips, you can make sure your Google Ads campaigns are running efficiently and cost-effectively.

josiah-roche-marketing

Josiah is a multi-award-winning digital marketing consultant and former journalist for the Australia Times. He now helps 6-7-figure brands as a Fractional CMO to generate predictable leads and sales growth.​

Contents
Table of Contents
Google Ads Guide Every Business Needs Now
How I Made $73 Million
for Clients Using Google Ads
This brand-new FREE report reveals the fastest and simplest way to explode your leads and ROAS using Google Ads.