A Guide to Google Ads Pricing in 2022

American Express and Verizon spent billions of dollars on Google Paid ads. For each targeted prospect that clicks on your ads, you will have to pay the amount based on the CPC. If you aren’t familiar with the google ads pricing, you might end up overspending.

Spending too much on ads can stunt your business growth. Fortunately, if you understand the google pay-per-click cost, you can budget properly. Keep reading to learn more about the cost of google ads, so you can profit from this strategy.

What Are Google Paid Ads?

Google Ads is a type of PPC (Pay-Per-Click) where businesses can display ads on Google Search and partnering websites. Advertisers only pay when someone clicks their ad, making it a cost-effective way to reach potential customers.

What Is Cost-Per-Click (CPC)?

This is the amount you will pay each time a user clicks on your ad. For example, if you have a CPC of $1.00 and someone clicks on your ad, you will pay $1.00. 

What Is the Minimum CPC for Google Ads?

The minimum CPC for Google Ads is $0.01. That means you can’t bid less than $0.01 per click on your ad. If you do, your ad will not be shown to potential customers. 

What Is Cost-Per-Impression (CPM)?

This is what you’re willing to pay each time your ad is shown 1000 times. For example, if you have a CPM of $10.00 and your ad is shown 2000 times, you will pay $20.00. 

What Impacts the Google Ads Pricing

The average cost-per-click (CPC) for Google Ads is $2.69. If you want your ad to be clicked by 100 people, you would need to spend $269 on your campaign. Here are the factors that impact the costs:

Industry

You can expect to pay a higher CPC if you’re in a highly competitive industry, such as healthcare or law. However, you would pay lower prices in less competitive fields, like pet care.

Location

If you’re targeting a city with a high cost of living, such as New York or San Francisco, you can expect to pay more per click. A small rural town is less expensive.

Demand

You will pay more if you’re selling something in high demand, such as a new iPhone or a popular video game. Low-priority items, such as books or clothes, tend to cost less.

What Is the Average CTR?

The average CTR (Click Through Rate) for Google Ads is 2.7%. If your ad is shown 100 times, you can expect 2.7 people to click on it. 

How to Increase The Google Ads CTR?

A high CTR means people are finding your campaign helpful and relevant. They are more likely to click on your website and explore what you have to offer. Here are a few ways to increase your Google Ads CTR: 

Use Relevant Keywords

These are phrases related to the product or service you’re selling. For example, if you are selling women’s clothing, relevant keywords could be “women’s clothing,” “dresses,” or “tops.” 

Use Negative Keywords

These are keyword phrases you don’t want on your ads. For example, if you are selling women’s clothing, negative keywords could be “men’s clothing,” “boys’ clothing,” or “girls’ clothing.” 

Use Enticing Ad Copy

Your ad copy is the text of your campaign. You should use persuasive copies to convince potential customers to click on your ad. 

For example, let’s go back to our scenario of selling women’s clothing. Your ad copy could be “The best selection of women’s clothing. Shop now and save!” 

Use a Relevant Image

Your image should be relevant to the product or service you’re selling. For example, if you are selling a dog toy, the picture should be a dog playing with the toy.

Use a Call-to-Action (CTA)

A CTA is a phrase that tells potential customers what you want them to do, such as “click here,” “buy now,” or “learn more.” Including a call to action in your ad can increase your CTR. 

What Is the Average Conversion Rate for Google Ads?

The average conversion rate for Google Ads is 2.35%. If 100 users click on your ads, 2.35 of them will buy something from your website. 

What Is an Excellent Conversion Rate?

A “good” conversion rate depends on your industry and what you’re selling. For example, the average conversion rate for e-commerce sites is 2.86%. In contrast, the average conversion rate for lead generation sites is 1.45%. 

How to Determine Your Daily Budget

The amount you’re willing to spend on your Google Ads campaign each day is your daily budget. Your total daily budget is divided between your ads and keywords. How much you want to spend per day depends on your business goals. 

To calculate your daily budget, take your monthly budget and divide it by 30 (the average number of days in a month). For example, if you have a monthly budget of $1000, your average daily budget would be $33.33. 

Can a Marketing Agency Help Reduce the CPC?

Google paid ads can boost brand awareness by 80%, but the objective is not to break the bank. Working with a marketing agency can help you save money on your Google Ads campaign. Here are ways they can help:

They Know the Industry Standards

An experienced digital marketing firm will know the average CPC for your industry. This allows them to set a realistic budget for your campaign. 

They Can Help You Target the Right Keywords

You could be overspending per click if you’re targeting the wrong keywords. A marketing agency can help you research and target the right keywords for your campaign. This can help reduce your CPC. 

They Bid Strategically

These agencies use bid strategies to help you get the most out of your budget. They can set a maximum CPC and adjust your bids based on your goals. This ensures that you’re not overspending on your campaign.

They Monitor Your Campaign Regularly

A marketer will monitor your campaign to see how it’s performing. If a keyword is underperforming, they will replace it, so you don’t waste money.

Are Google Ads Right for You?

Google Ads is a powerful marketing tool to help you reach your target audience. However, it’s essential to understand how it works before you start using it. In this article, we’ve covered the basics of Google Ads pricing, including how much it costs and what factors affect your CPC. 

We’ve also covered some tips on how to get the most out of your campaign. If you’re considering using Google Ads for your business, contact us today to see if this strategy is right for you.