A popular adage in the business world claims that there is no such thing as a free lunch. The same could also be said about advertising and in this article we explore the true cost of Google Ads. SEO is a free way to bolster your online presence through a smart digital strategy, but paid advertising will always have its place.

Google Ads is the dominant service when it comes to attracting attention through paid adverts. The purpose of SEO is to reach the top of page one on this search engine, and Google Ads can offer a shortcut to this lofty position.

However, everything comes with a price. Google is a business, after all – they posted profits of US$160.74 billion1 in the last reported fiscal year. Those numbers are not achieved through sheer benevolence. Before committing to this advertising model, ensure you understand the real cost of Google Ads.

Keyword research

There’s an elephant in the room that needs to be addressed before we get started. If your SEO strategy is performing poorly, Google Ads is not a quick and easy way to rectify this without spending a small fortune.

If Google’s algorithms are penalising your copy, it suggests that you are using inappropriate keywords or black hat SEO techniques2. This will not go unnoticed. The cost of Google Ads is related to the quality score that Google assigns to your website. It’s a simple equation. The higher your quality score, the lower your costs will be per click.

Keyword bids for AdWords

Take the time – and spend the money – to conduct thorough, informed keyword research

This is understandable from Google’s perspective. They are not interested in directing visitors to substandard websites. This will harm Google’s reputation as a reliable and trustworthy resource. Ensure you take the time to bolster your quality score3 before launching an advertising campaign. The cost of Google Ads will be a false economy otherwise.

Bidding on keywords

One of the most prominent costs of Google Ads comes from bidding on keywords. This is the process of informing Google how much you are willing to pay per click on your advert, based on the keywords used. This will be a ranking factor in where Google places your ad.

The outcome of these bids is a little different to a conventional auction. The highest bid does not guarantee the top spot on page one. As discussed, your bid will be reviewed in conjunction with the quality score of your keywords.

Bidding on AdWords

Bidding on Google Ad keywords is a silent auction with a twist

A site with a quality score of 10 – the highest accolade Google awards – could bid $2 per keyword. At the same time, a site with a quality score of just 3 could bid $10 per keyword but still be ranked lower. Google makes money either way and will prioritise excellence over abundance.

Cost of Google Ads per click

This is the real cost of Google ads. If your ad is accepted and sees traction in the form of click-throughs from users, you will need to pay Google for each click. This cost depends on the niche that your business falls under, and your quality score.

Yes, we’re harping on that again. If you are still not convinced that you need to think about quality score, this table should explain why you need to change your thinking.

Quality Score Cost Per Click Payable to Google
1 INCREASED by 400%
2 INCREASED by 150%
3 INCREASED by 67%
4 INCREASED by 25%
5 Par – a Quality Score of 5 is Google’s benchmark
6 INCREASED by 16%
7 DECREASED by 28%
8 DECREASED by 37%
9 DECREASED by 44%
10 DECREASED by 50%

If your quality score is low, the cost of Google ads will quickly start to soar. You need to think carefully about how much profit you are willing to sacrifice in the pursuit of a quick win.

Daily budgets

To prevent the cost of your Google Ads campaign from spiralling, set a daily budget. There is no minimum daily spend with Google Ads.

Cost of Google Ads

Keep an eye on your daily spending – this will impact the overall cost of Google Ads

Certain times of year will always be more popular than others. Retailers, for example, will see spikes in interest during the high holidays. Equally, there may be a 24-hour period where an advert sees a spike in popularity. Perhaps an influencer was snapped wearing a particular piece of apparel, or a news story brought a search term to prevalence.

In these circumstances, Google will allow you to double your daily budget. The average cost over the month should even itself out. Be mindful of keeping an eye on this, though – especially if you pay for conversions. This can see a sharp increase in the cost of Google ads.

Conclusion: Does the cost of Google Ads provide a profitable ROI?

The short answer to this is, “it depends.” Google Ads can undoubtedly be a great way to bolster revenue streams for a business. You will need to weigh up the cost of Google Ads with the expense of utilizing this service. If your website already performs well and you operate in a niche that does not charge the earth for keywords, you’re much likelier to see positive outcomes.

To fully embrace the advantages of Google Ads and maximise your investment, you should consider hiring an agency. We recommend us for this of course, but we are probably biased. All jokes aside, hiring an agency with expertise in Google Ads can see results that improve your ROI4. It is the best way to ensure that the cost of Google Ads does not dwarf the rewards.

Image Credits – https://pixabay.com/users/wokandapix-614097; https://pixabay.com/users/qimono-1962238; https://pixabay.com/users/cpastrick-35190

References and further reading

  1. statista.com/statistics/266206/googles-annual-global-revenue
  2. https://cognitiveseo.com/blog/12169/44-black-hat-seo-techniques
  3. https://ads.google.com/intl/en_uk/home/resources/improve-quality-score
  4. searchenginejournal.com/agency-managing-google-adwords-campaigns/233881/#close