How Much Do Google Ads Cost in 2021?
By Tri | Jan 13, 2022 (5 min read)
B2B Marketing | Business | Ecommerce | PPC
If you want to get attention online today, you need to stand out from the competition.
In 2021, if you want to get the most attention for your products and services, the ‘pay to play’ approach has become the norm. On sites like Facebook and Instagram organic posts are now down to as low as 5.2%.
Without a solid advertising plan in place such as Google Ads pay per click marketing, your business will literally get ignored and overlooked in online searches.
Unless you’ve been hiding under a rock for the last ten years, you’ve probably seen Google Ads (formerly called Google AdWords) displayed on top of search engine result pages (SERPs).
Many of the clients we work with have a lot of questions around Google Ads and the cost to do effective PPC advertising.
Some of the most common questions we get are:
“How much do Google Ads cost?”
“How much does Google AdWords cost per click cost?”
“Are Google ads expensive?”
Before you start your Google AdWords campaign, it’s important to understand Google Ads pricing and address some important questions.
Once you understand the costs of Google pay per click ads, and how to get the most from your PPC campaigns, you can plan a good Google PPC strategy around them.
In this article, we will look at the typical Google Ads costs and understand how to get the most from your Google PPC campaigns.
What Are Google AdWords?
Google Ads (previously known as Google AdWords) is the Google search advertising platform that allows businesses to display concise advertisements, videos, product listings or service offerings to potential customers.
Anytime a person searches for something online, they will often find Google PPC ads appearing. Google Ads can appear in many forms, including search engine ads, display ads on non-search sites, video ads on Youtube, and in some mobile apps.
One key benefit of Google Ads is that they are pay-per-click, meaning that advertisers do not pay the cost of Google Ads when the Google PPC ad is displayed. An advertiser is only charged a fee for Google Ads cost when someone clicks the ad.
The cost-per-click fee varies depending on several factors that can influence the final charge.
How Much Does Google AdWords Cost?
Many businesses have seen a big boost in sales after running a successful PPC campaign.
In fact, in the early days of Amazon, the company was willing to outbid most competitors to capture the new customers shopping online via Google Ads. This strategy, while costly upfront, clearly paid off.
For this reason, many new businesses are interested in running some Google Ad campaigns to test their new website landing pages, and the appeal of their product offerings.
When looking at the cost of Google Ads, it is important to know that several variables affect the cost of Google Ads campaigns.
For this reason, there is no direct answer to the question “How much does a Google ad cost?” You have to do some research in your niche, and see what the going rate is per click.
If you want a rough estimate for how much Google ads cost in 2021, the average cost-per-click across all industries for Google Ads on the search network is $2.69.
The good news is that the Google Ads platform allows business owners to manage their Google pay per click ads, select the most effective keywords for their niche, to set a daily Google PPC budget, and keep their ad costs affordable.
The biggest factor that influences the cost of a Google ad is the Google Ads auction. You must look at what your competitors are paying per-click for the same keywords, and then decide if you are willing to bid more for the same keyword.
What is the Google AdWords Auction?
Google Ads auction determines your Google ad placement and the cost you are willing to pay for your selected keywords.
Inside the Google Ads auction, advertisers ad ranks determine the placement of their ads and the Google Ads cost per click they will have to pay.
The ad rank of your advertisement is based on your ad quality and maximum current bid for that keyword.
Of course, your competitors bids are outside of your control, however you can work on your ad quality.
By keeping an exemplary ad quality score, you can spend less on Google Ads cost yet still get a higher ad position. You can also take advantage of tools such as callout extensions that can add to the appeal of your ads once they are posted.
How Much Should You Spend On Google Ads?
In 2021, the average Google AdWords cost per click is about $1 to $2 on the Google Search network. Some newer niches may still see lower costs, while more established businesses, might see higher cost-per-click averages.
As a rule, your cost-per-click is contingent on factors such as your type of industry, current trends and your product or service costs.
Google Ads pricing is extremely subjective, depending on the expected revenue you will generate from a newer customer.
For example, businesses in the real estate, legal or accounting industries may gain $1000 to $10000 per new client, so spending $40 per click on a Google Ad is well worth the investment. For industries where the profit margin is lower per customer, it might not be worth spending more than $1-$2 per advertisement.
In highly competitive industries that generate more revenue per client, companies are typically willing to spend $10 per click on average. It is important to understand the relative value between your per-customer-revenue and how much you can spend on your Google Ad campaigns.
If you are just starting to run Google Ads, it is a good idea to begin conservatively. The best way to ensure you don’t overspend on Google Ads is with a low daily budget.
Once you get some data to see the results of your ad campaigns, you can later increase this when you start to see a better return on investment (ROI).
This is a huge benefit of online advertising. With conventional print ads, you cannot test as effectively. But with online pay-per-click ads, you can keep tweaking and adjusting as much as you like, and seeing what gives you the best return on investment.
Before you consider spending any money on Google advertising, its important that you first:
- Create attention-grabbing, high-quality ad copy
- Do keyword research based on what your customers and prospects are clicking on in your industry
- Work on your landing pages for your products and service offerings, so that they convert well once a person clicks
- Observe what it working for your competitors in your space, and find ways to create similar or more compelling offers
What Is The Ideal Budget For Google AdWords?
The vast majority of Google’s revenue is based on the success of Google Ads. For this reason, they have a lot of tools to help businesses who want to advertise on their platform.
To help you decide on your budget and Google Ad Words cost, you can use the Google Ads Cost Calculator.
Google AdWords offers a budget control features that allow you to adjust your cost of Google Ads each day.
Once you know the typical return you will earn from a new customer purchasing from you, the Google Ads Cost Calculator can generate how much your return on ad spend (ROAS) would be. This calculation can help you determine if the cost of a particular Google ad is too expensive.
With this tool, you can assess whether increasing your ad spend by a certain percentage will generate more money or incur losses.
Another great benefit of the Google Ads Cost Calculator is that it can also deliver estimates of relevant data, such as the number of sales per month, gross revenue per month, gross profit per month and your return on advertising investment.
The Benefits of Advertising With Google Ads
Obviously the biggest benefit of any advertising that it speeds up and expands the visibility of your products and services. But with online advertising such as Google Ads, you also have the benefit of watching your results in real time.
Consider some of the following facts about online advertising:
- 62% of all core search queries in the United States are generated by Google
- The top three sites on SERPs acquire 46 percent of clicks
- There are over 167 billion searches per month on Google
- More than 7,000,000 advertisers use Google Ads PPC
- Of Google Ads that get clicked, 65% have buyer-intent keywords
- PPC click conversion rate is 1.5 times as high as organic search clicks
Any well-planned and tested digital marketing campaign can help you generate significant returns for your Google AdWords spend.
Because you can control the cost of Google AdWords campaigns, you are able to spend conservatively and increase your advertising budget as you grow.
Always begin by having a compelling offer, an interesting and appealing landing page, and tested ads that match the search intent of your prospects.