Google Ads is probably the #1 torment of every marketer.
So much so that if we were to investigate the most searched questions on the web, we would probably find in the top 3:
“Are we alone in the universe?”
“What are we doing on the planet?”
“Most importantly….how much does a Google Ads campaign cost?”
Good question.
To which, in reality, most of the time is not given a clear and precise answer.
If you are tired of the usual “it depends” and “we will evaluate in progress” you are in the right place: thanks to years of experience gained within an agency Google Partner I decided to clarify the topic once and for all, revealing point by point all the secrets of paid ads on Google and how to calculate prices and budget.
Let’s start!
How much does an ad cost : Let’s look at the numbers
When it comes to Digital Marketing nothing speaks better than numbers: let’s see some important ones:
The average annual expenditure of an SME for advertisements on Google is between 5 and 15 thousand euros.
The average Cost Per Click (CPC) for an Ads ad is 1-2€, but it can be even lower for ads on Display campaigns
The highest CPCs can also reach above €50, but these are cases related to highly competitive sectors such as insurance and finance.
To this we should then add the costs of a specialized web marketing agency to manage the campaign.
I know, many of you will think “Google Ads is a free system: I can also manage the campaign by myself”.
But unless you are an experienced marketer yourself, be on your guard: a poorly managed Ads campaign can be a real hole in the water for your investments with a return of investment (ROI) equal to zero.
Entrepreneur forewarned, half saved…
Google ads : Personalized ads
“So Google Ads is a platform where whoever has the most money wins: just invest in a higher CPC and you’re done.”
Here…no. Not at all.
Think about it: if things were really like that, we would only see ads from very rich multinationals and top brands.
Yet many times it happens just the opposite …
This is because Google Ads does not force users to fixed costs and does not consider the CPC as the only parameter of success, but on the contrary it is a highly customizable platform based on many parameters.
So if you thought that to be successful it was enough to invest more money than your competitors, well, you were wrong and very wrong.
Do you want to know why?
Then let’s discover together the basic rules of Ads operation.
Google Ads : How it works
Believe it or not, every time you do a search on Google an auction on thousands and thousands of ads takes place in just a few moments.
The result of that auction will determine who will be displayed in first position, who in second or third….and who will not be displayed at all.
Amazing isn’t it?
The most interesting thing, however, is that that auction is not based, as we might think, simply on the concept of bidding (the highest bidder wins), but on the contrary calculates a more complex parameter: the so-called Ad Rank.
Among other things, the Ad Rank does take into account the CPC, but in addition to this it gives great importance to the Quality Score, which is the score obtained by your ad that is evaluated for:
Relevance
Goodness of keywords
Content quality
Quality of the landing page
That’s why, just like in a car race, in a comparison between ads it is not absolutely taken for granted that whoever has the most powerful engine (highest CPC) will be the winner.
Instead, a good strategy based on a mix of relevance, keyword choice, content quality and landing page quality could take you straight to the top of the podium.
Google Ads : How is the daily budget managed ?
Ahhh, here is one of the most common mistakes: the expectations on the daily budget.
Calculating them would in fact seem quite simple: if I have a budget of 100€ per day and I choose a keyword with a maximum CPC of 1€, I will get 100 clicks on my ad.
Well, actually…not necessarily.
When we want to understand how Google Ads manages our budget we should always remember that we are not operating in a logic of direct purchase (like ecommerce), but of auction.
So a maximum CPC of 1€ doesn’t represent the expense needed for a click, but on the contrary the maximum cost we are willing to sustain for that click.
In short, if our most fierce competitor were to bet 80 cents as maximum CPC for the same keyword, to overtake him Google would charge us only one cent more than his bid, bringing us to a total expenditure of 81 cents per click even if we were willing to pay up to 1 euro.
It’s easy at this point to understand why, compared to the initial forecast, we may find that we have obtained much more than 100 clicks.
But, potentially, also much less: in fact the formula works on the contrary if our competitors would bet much more than 1€ as maximum CPC.
In that case our daily budget would be quickly burned up and we would get less clicks than expected.
Expert advice? Always focus on the overall budget dedicated to the campaign…and avoid ruining your sleep by following daily fluctuations that are not very indicative.
Other campaign parameters
As we said, Google Ads is a highly customizable system based on the needs of the user.
In addition to the Cost Per Click we can, for example, establish to program our ad according to the time slot.
Think for example about the differences between a B2C business and a B2B one: while the former will find it appropriate to show ads mainly on weekends, in the evening and during lunch break, the latter will benefit greatly from showing its advertising during the working week.
The concept could easily be extended to campaigns by device: still following the previous example, a B2B industry will tend to be viewed by a target audience of professionals on desktop computers, while a pub or club will be searched by customers mostly on mobile.
Speaking of pubs and clubs, for these and many other business categories the geotargeting function in Google Ads becomes fundamental.
Google Ads : Be visible on the web without a big budget
Yes, now you can breathe a sigh of relief.
We have seen Google Ads in its basic principles, and once understood the operation of the platform we can declare a certainty: you do not necessarily need a huge budget to make your ad stand out.
Certainly in some sectors (for example pharmaceutical, financial or legal) the investments could be more important. But on the other hand we must remember that it is the whole business of those areas that moves higher figures.
For small and medium-sized businesses, however, no fear: with a strategic investment and the help of experts, the return on investment is assured!