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How Much Do Google Ads Cost?

team working on google ads

Whether you work in eCommerce or simply market your business online, you’ve likely heard of cost-per-click (CPC) advertising. CPC advertising generally occurs within first-tier search engines like Google. If a viewer clicks on a Google ad, it redirects them to the advertiser’s website. Each time this happens, the advertiser pays the publisher some amount of money. The relevant question here, of course, is how much do 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 Across Campaigns

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, Gmail ads, shopping ads, and YouTube ads. The type of cost associated with each appears in the table below.

 

Campaign TypeCost Options
SearchCPC
DisplayCPC, Viewable CPM (cost per mille or cost per 1,000 viewable impressions)
DiscoveryCPC
GmailCPC (charged for clicks to open the email message. Clicks from opened message to website are not charged)
ShoppingCPC
YouTubeCPV 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.

Discovery Ads

CPC determines the cost of one of Google’s newest types of advertising, Discovery ads. These are native ads that appear across multiple Google 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.

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.

Gmail Ads

These interactive ads appear in the Social and/or Promotions tabs of a Gmail user’s inbox. If clicked, the ad can expand to contain videos, images, or embedded forms. They can also contain a traditional written ad, or direct the user to the advertiser’s website. Gmail Google Ads’ cost depends on CPC.

It’s important to note that, for the purposes of this expense, CPC occurs when the ad message is clicked and expanded. If the customer expands the message but neglects to do anything else, costs will still accrue.

Shopping Ads

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 Ads

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.

Google Ads’ Cost in Your 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 across various industries. This chart contains some surprises. For example, keywords related to pharmaceuticals, a massive industry in the United States, come in near the bottom. Online education, on the other hand, which many people consider a niche market, ranks near the top.

It’s even common that Google Ads cost widely different amounts 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. Below, you can see sample search results for keyword planning for electric bike manufacturer and Tuff client, QuietKat

As you can see, one of the most expensive keywords, “specialized electric bike” is also the most general. At the opposite end of the spectrum, “extreme fat tire hunting electric bikes,” a highly specific term, comes in at around half the price.

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 Matters

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.