How Much Do Google Ads Cost? A Quick Pricing Guide

February 2024

When you’re first getting started with online marketing, Google is going to be one of your first stops. This is understandable, of course: in addition to being a huge component of the online-advertising landscape in general, Google is also the first place we go with questions about most things.

Formerly known as “AdWords,” Google Ads is Google’s proprietary advertising platform. Through this platform, advertisers (like you) bid on keywords to show up on Google’s Search Engine Results Page (SERP) in what is known as “paid search.” There are other types of ads through the Google Ad network, of course, but our focus here is going to be on Search ads, just so that we don’t talk your ear off — we can cover the rest in another post.

So if you’re looking into advertising via Google, the question is obvious: how much do Google Ads Cost?

We’d love to just give you a solid number and say that that’s the cost-per-click, but the real answer? It depends. Depends on what? Lots of factors. Google claims that Google Ads averages a 200% return on investment (ROI), but that’s simplified data that doesn’t include factors like:

Vertical
Keywords
Ad Quality
Competition
Landing Pages

So let’s break it down:

Your Vertical

Your industry, your marketing niche, your vertical – where your business falls in that category makes a big difference in your ad pricing because different industries have different average Costs-Per-Click (CPC). The costs of products and services in one industry can be very different from another, after all – a customer looking to hire a lawyer will take more convincing than a customer looking for lunch. As such, the average cost-per-click, cost-per-lead, and cost-per-conversion have differing average rates by industry. If you want to generate leads, you have no choice but to compete inside your industry.

Ads on the Google Search Network will end up with different CPCs for B2B ads, e-commerce ads, legal-industry ads, etc, with costs per click spanning $1-$7 — and that’s not including some industries like legal ads, which can have CPCs in excess of $100. Conversely, the CPCs on the Google Display network could be lower.

Your Keywords

Search-engine ads are categorized by the intent behind the search: informational, commercial, transactional, and navigational. Some of these queries aren’t designed to convert directly, but commercial and transactional searches usually come from people looking to spend money somewhere.

Different types of searches are geared towards different types of audiences. And different keywords may have more direct competition than others, leading to higher CPCs and the need to spend more money to stand out from the crowd.

Your Ad Quality

When talking about “ad quality,” a layman could be talking about one of two things: there’s the “Ad Quality” score, and the “Ad Strength” score. And while those two things sound similar, they’re actually tracking two separate things.

The Ad Quality score is a measure of the quality and relevance of both your keywords and PPC ads. It measures things like click-through rate, the relevance of your keywords, landing page quality and relevance, and the relevance of your ad text. It also factors in the historical performance of your Google Ads account.

So Ad Quality isn’t really making a judgment on the quality of your ad, but the quality of your ad relative to the searches being performed by users. Basically, the Ad Quality score is a measure of how relevant your ad content is – less-relevant content and keywords will deprioritize your ad rank in ad auctions, and will also increase your costs. The actual formula Google uses is, naturally, proprietary and secret, but making sure you’re running relevant content is a good way to maintain your positioning on that score.

Every ad that runs through Google receives a Quality Score, which has a direct impact on the sort of CPCs your ad can expect, and your ad rank. Higher-quality ads (with a rank of 5 or greater) will receive better CPCs and visibility than a lower-quality ad.

A quality score of 5/10 is considered the average baseline in terms of quality. Running the numbers, CPCs increase by a factor of 4 if your ad quality is set at 1, but if your ad quality is a 10/10, your CPCs will cost half as much as it did at 5/10.

Ad Strength, meanwhile, is a metric that focuses more on what you’d traditionally think of as the quality of your ads. Using a machine learning model, Google provides feedback ranging from “Incomplete,” “Poor,” “Average,” “Good,” to “Excellent,” and measures the quality of your ad copy against Google’s best practices. There are downsides — the model is obviously based on what’s come before, so experimenting with new copy will often get a lower Ad Strength Score — but if you’re in well-trod territory trying to replicate the sort of successes others are having with similar products or services, there will be advice here worth taking.

That said, Ad Strength doesn’t factor into either your CPCs or your search ranking: it is possible to have a performing creative that’s netting you solid conversions that nevertheless has a low Ad Strength score.

Creating Your Ads For Google Ads

Which, of course, brings us to the costs of creating the ads themselves. Google isn’t going to create your ad copy and sales funnel for you, so you’re going to have to either do that in-house or hire someone – or a bunch of someones – to build those ads for you.

As we said above, an ad’s quality has a direct bearing on how much it’s going to cost you, so some money spent at this phase can save you money down the line. And, naturally, better ads are more likely to convert anyway, so this part’s a no-brainer.

To write copy, you’ll likely need a writer. Even in the world of chatGPT and generative AI, you’ll want a skilled writer to go through that automated copy and get it into shape. On top of that, you’ll also need image assets, which means hiring a designer, licensing stock photos, placing logos, and otherwise helping your copy pop. And once those folks are done, you’ll need web-savvy technical folks to get the ads camera-ready.

Obviously, prices are going to vary wildly for this sort of thing. Doing it yourself is free (well, not really — your time is valuable, isn’t it?) but the results might not be at the quality level you need. Freelancers have different ways of pricing their work — some go by hours, some go by words, and some go per-project. Websites like Fiverr and Upwork can help you find freelancers on an a-la-carte basis. At the most expensive end, you’ve got ad agencies, whose prices can vary a lot but generally provide a more curated experience with greater support.

Running Your Google Ads Campaigns

Once you’ve got your assets, and keywords, and landing pages, and all of that good stuff ready to go, you’re going to need to actually manage your Google Ads campaign. These things don’t run themselves, after all – campaigns require analysis and tending to optimize your performance. Much like with content creation, there are a lot of ways to do this.

You can do this yourself, of course, which is a lot like driving without insurance: sure, it’s cheaper in the near term, but the risks are greater. Hiring a Google Ads agency or expert will give you more security, and pricing can be done as a flat fee, as a performance-based fee, or as a percentage of your total ad spend.

One thing to be careful about is finding an agency that is transparent about their pricing. Some agencies will put a management fee up-front, but secretly take additional hidden fees out of your marketing budget. Pricing transparency guarantees that your marketing budget goes to your marketing and that you’re getting a realistic picture of how your campaigns are performing. That way, you know the appropriate amount to allocate to your ad budgeting.

Software and Tools

If you’re running your creatives and campaigns through agencies, you might think that you won’t need any special software or tools of your own — after all, the agencies have those tools, right?

But you’re going to need access to those tools yourself to keep your partners honest and to track performance metrics as things go along. That way you can continue to be an active participant in your own success.

Project Management: project-tracking software like Asana and ClickUp help create a central hub where you and your partners can track projects, pool resources, and have important conversations about your ads and campaigns. They do require a monthly fee, but they’re surprisingly affordable.
Analysis: Tools like Semrush allow you to track the quality of your search-engine marketing and provide pointers for how to improve your results.
Reporting Tools: Tools like Google Data Studio, Microsoft Excel, Looker, and others provide a good place for you to track complicated data.
Fraud Protection: click fraud is a common problem on the internet, with bots attempting to falsify click numbers for a variety of reasons. Programs like ClickGuard and ClickCease keep track of your traffic quality and have a monthly subscription fee.

Of course, this brings us back to the concept of transparency. The more your partners are open with you and let you take a look under the hood of your campaigns and numbers, the fewer tools you might have to buy on your own.

So, What Do Google Ads Cost?

As we’ve pretty firmly established, pricing on Google Ads is a spectrum, with a lot of different things at play. Depending on your industry, the keywords you’re competing on, your ad quality, and how much you’re paying out of pocket to get set up, ads could rate from fairly inexpensive to rather pricey. The average CPC on Google’s Search Network is between $1-$2, but the most-expensive keywords can cost upwards of $50 per click. Where you fall on that spectrum is hard to say.

Drilling down on costs per-click, or costs per-lead, can be a valuable way of troubleshooting problems in your creatives, and your ad management, but it’s not a great metric for determining whether your ads are effective. Big businesses are willing to pay big money for $50-CPC keywords because they are, overall, turning a profit. That’s why looking at your campaigns through a Cost-Per-Action (CPA, also sometimes “cost-per-acquisition”) lens can be more-informative.

If you’re spending $50 per click, and only one out of every ten clicks is resulting in a lead, well, that’s $500 per lead. If one in ten leads is resulting in a sale, well, that’s $5,000 spent for every sale. If you’re selling ice cream, that’s pretty abysmal. If you’re selling houses, on the other hand, that could turn out to be fairly profitable. So while your CPCs may be higher than you liked or expected, if you’re getting a solid ROI then they’re less of a concern.

There are a lot more nuances to Google Ads that we haven’t been able to get to here, but one of the quickest ways to get off the ground partnering with someone you can trust, who knows the ins and outs of Google Ads. That’s why Balihoo has a transparency guarantee: your media budget goes to your media, and price breakdowns will be available to you whenever you need them.

If you’d like to learn more about how to handle Google Ads through Balihoo, reach out to us today.