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What Is Google Ads Pricing? How Does It Work?
If you are putting time into building it, they will be coming in?right? The market of this day, if you are taking time out to develop a good Google ads campaign, they definitely will. Doesn?t matter if it is your first Google ads campaign or your 500th; in this article, I guarantee to provide you with some of the most important insights about Google ads pricing. So, without any more delay, let?s get started!!
Once what was a luxury, digital marketing these days is nothing but a necessity. It particularly is if you are a completely new company that is trying to break through.
But how does Google advertisements work? How can they bring in more traffic? How are they even priced? Well, if these are your questions, you are at the right place.
What Is Google Ads?
Google Ads, which was previously known as Google Adwords, is a famous bid-based online platform for advertising, which includes search engine ads of textual format, banner ads, video ads, YouTube ads, and many other display options. You will find Google Ads across the search results of Google and thousands of other partner websites of Google.
Google Ads is by far the largest digital advertising publisher in all across the United States and accounts for 28.4% of the total ad revenue.
How Does Google Ads Work?
Before you get to know the pricing, it is important that you know how Google ads operate. It is simple to begin with.
You need to write an advertisement, place the bid, wait for a while, and finally, the sales would roll in. That is all that you need to do. However, there are a few minor caveats.
While we will discuss how to develop a Google Ads campaign in a more explained manner, for now, you need to just know that the entire thing works on a pay-per-action model. That is exactly what we refer to as the cost-per-click technology. This means you would have to pay a specific price every time someone clicks on the advertisement or whatever your goal of action is.
There is a frequent change in the price, and it depends on multiple factors. These factors include how many competitor brands are targeting the same keyword at the same time, expected reach, search volume, time of the year or day, and many others.
When you are placing your advertisement, you need to mention your ?maximum bid.? This is the maximum amount that you are willing to pay for the advertisement.
There are three main bidding options
- Pay/Cost per click: You will have to pay when a user clicks on your advertisement.
- Cost per mile: You will pay for 1,000 advertisement impressions.
- Cost per engagement: You will have to pay when any user is performing a determined action on the advertisement, like watching a video or signing up for a list.
For instance, if your maximum bid is $2, but Google is saying that the value of the click is $2.55, the advertisement will not show. However, if your maximum bid was $2.56, there is a chance that the advertisement may as well get a placement.
Significantly, this number differs from the budget of the overall campaign. You will get the option to set a regular average budget and allow Google to deal with individual advertisement bids. You may also set both the overall budget and tune the maximum bid for every advertisement.
Google Ads Pricing
Google ads may cost somewhere between $1,000 to $10,000 for each month if you are going with the average cost per click of just $1 to $2 for the Google Search Network. It charges you only $1 for the Google Display Network this year itself. Google ads pricing may differ depending on multiple factors like the campaign targeting, industry, and the ad network.
Here is the average CPC breakdown of Google Ads pricing depending on various industries. This may give you a better understanding of how Google ads pricing works.
| INDUSTRY | AVERAGE CPC (SEARCH NETWORK) | AVERAGE CPC (DISPLAY NETWORK) |
| Advocacy | $1.43 | $0.62 |
| Auto | $2.46 | $0.58 |
| B2B | $3.33 | $0.79 |
| Consumer Services | $6.40 | $0.81 |
| Dating and Personals | $2.78 | $1.49 |
| Ecommerce | $1.16 | $0.45 |
| Education | $2.40 | $0.47 |
| Employment Services | $2.04 | $0.78 |
| Finance and Insurance | $3.44 | $0.86 |
| Health and Medical | $2.62 | $0.63 |
| Home Goods | $2.94 | $0.60 |
| Industrial Services | $2.56 | $0.54 |
| Legal | $6.75 | $0.72 |
| Real Estate | $2.37 | $0.75 |
| Technology | $3.80 | $0.51 |
| Travel and Hospitality | $1.53 | $0.44 |
Factors Determining Google Ads Pricing
As I mentioned earlier, there are many factors that determine Google ads pricing. While it may vary as per brands and businesses, there are some common factors that contribute to Google ads pricing.
Let us discuss these factors in more detail.
Industry
This is one of the biggest factors that contribute to the factors that influence Google ads pricing within your industry. Specific industries are usually more competitive in comparison to the others. For instance, the accounting, legal, and real estate industries are known to have some of the most competitive keywords in Google ads. This means you may have to pay a comparatively higher CPC.
Market Trends
Online advertising and consumer trends change constantly. Therefore, it is important that you keep up with the most recent changes. The audience will have needs, and the trends for shopping may change over time. This means you will have to change the strategy for keyword bidding.
The average CPC may either go down or go up. It is the same when it comes to the shift in consumer trends. This makes some of the keywords more complicated than others.
Quality Score
Google ads pricing also depends on the Quality Score of your advertisements. It is a measurement of the relevance and quality of your advertisement. It usually has a range from 1-10 score and evaluates the landing page experience of the ad, click-through rate, and keywords.
Keywords
This is yet another important factor that influences Google ads pricing. You will find certain keywords to be more competitive than others. That is why your choice of keywords is extremely important to determine how much you wish to spend on Google ads.
Bid
This is yet another important factor when it comes to determining Google ads pricing. The bid is the maximum amount that you will be paying for every single click on your advertisement. You may decide this amount to anything that may fit your budget.
The budget will also influence the Google ads pricing. The budget will be the amount that you would have to pay regularly and monthly for each ad campaign. Just like the bid, you may be able to decide this amount to anything that comfortably fits your ad budget.
The Bottom Line
We live in a digitally influential world. There is absolutely nothing that does not have a digital influence on it. If businesses want to be successful these days, it is feasible that they invest more in Google ads.
While Google ads pricing varies from one niche to another, they bring in good results, which in turn ensures positive consequences for the brand.
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