What determines Google Ads cost?

What Determines Google Ads Cost?

Google Ads, formerly known as Google Adwords, is the largest platform for pay-per-click (PPC) advertising on the internet. While there are other digital advertising platforms, Google is arguably the most important player by a wide margin, boasting a 73% market share. This means if you’re looking to drive large volumes of traffic to your business’s website through PPC, Google Ads is probably the first place you’ll start. 

A common question for any business or organization first starting to explore Google Ads is the cost of running a PPC campaign. Like many other marketing channels, there are a number of important considerations that go into this. Understanding the primary factors that drive cost for Google Ads can help lead to more efficient campaigns that achieve return on investment (ROI) for marketers. 

Primary factors affecting Google Ads cost

Like other PPC platforms, Google Ads functions through an auction system where advertising keywords are sold to the highest bidder. Bidders will set a maximum bid that they are willing to pay for a keyword or group. With the help of keyword researching tools, bidders can determine which keywords have the highest search volume and have the potential to drive traffic through ad rankings.

Factors that can lead to increased bidding, and thus increased cost, include:

  • Expected click-through rate, or number of times a person actually clicks on the ad
  • High-converting or sales-driven keywords
  • Past performance of ads and quality of landing pages

When an advertiser wins an auction, they will be given the cost per click (CPC) of the ad campaign. According to some estimates, the average CPC is between $1 to $2 on Google Ads. From there, the actual Google Ads cost is actually up to the advertiser, who will then set a budget for the ad. Once the budget runs out from clicks, the campaign will end unless the user resets the budget. Likewise, unspent money at the end of the campaign will be returned or can be reallocated. 

One of the most effective strategies for PPC is to minimize spending on highly competitive ads with a higher CPC while finding less competitive keywords that still offer high click-through and conversion potential. 

Cost-effective PPC with the marketing experts at Burg & Co. 

Our veteran team of PPC marketers have extensive experience with Google Ads and other platforms. We’ve helped companies fine-tune their digital marketing strategies to achieve lasting and significant ROI. Want to learn more about how we can help? Schedule your free marketing consultation with our team when you contact us today.