How much does Google Ads cost?

Have you ever wondered: how much does Google Ads cost? Here's the latest breakdown so you can streamline your PPC campaigns and improve ROI.

Written by Jack Cribb
PPC |   5 minute read

The most recent data suggests the average cost-per-click (CPC) for Google Ads is £1.90 on the Google Search Network (GSN) and £0.44 on the Google Display Network (GDN) across 16 global industries. 

However, if you’ve come here for a straightforward answer, I apologise. When it comes to ‘how much does Google Ads cost?’, the answer will always be different. It’s probably unlikely you’ll experience the prices stated above because an actual cost-per-click is affected by:

  • The bid price of keywords in your industry or niche (for example, keyword categories average at £38.74 in ‘insurance’ and £31.24 in ‘loans’)
  • Your quality score
  • Your ad ranking
  • Whether you use negative Keywords, Geo-targeting and ad scheduling

If you’re strapped for time and want a short answer presented by our very own Rikki Lear, check out this video:

So why is there no exact price for cost-per-click in Google Ads? Let’s explore this question.

Factors that affect Google Ads cost-per-click

The bid price of keywords in your industry or niche

Something many inbound marketing agencies, such as ourselves, can't stress enough is the niche you're in will determine the value for money you’ll most likely achieve.

Unfair? Yep, but that’s just the nature of Google Ads.

For example, if you’re one of the unlucky PPC souls to work within the gambling industry, Google Ads may not be worth it for you. The cost-per-click for the keyword, ‘casino’ is currently priced at a whopping £58.57, so it may put you slightly out of pocket to get those six people around the table.

But don’t let me put you off. Less competitive industries get lucky and end up paying next to nothing for some keywords.

Using a nifty tool called 'Advertising Research' provided by the guys at SEMrush, we can see every keyword your competitor is targeting through Google Ads.

The tool will give you a long list of keywords (exactly how long depends on your subscription) where you can then see all the search volume, costs and the positions for each keyword, all in real-time.

By sorting in terms of CPC, you'll find various keywords with traffic that cost next to nothing. You can then use these keywords in your own very Google Ads campaigns.

“The aim of Adwords (Google Ads) is to cut out the waste because Google does a phenomenal job of spending your money for you, so you really want to use negative keywords, look at your cost per conversion extremely closely and cut down on waste as much as possible, which frees up funds to be able to double down on what does work.” - Rikki 

rikki google ads love inbound

Everyday trends

Google Ads are heavily impacted by current trends happening right now. For example, when the COVID-19 pandemic hit, the average CPC dropped. If we think of restaurateurs, they experienced a decline in people coming to eat and saw decreases in CPC on both GDN and GSN.

Similarly, other industries saw more competition in digital marketing as they became more and more reliant on their digital presence. 

Your quality score

Don't fear; cost-per-click is merely an indication, not the be-all and end-all of the success of your keyword reach. Google has its own method of determining how much you’ll pay for each click, known as your “Quality Score”.

The Quality Score ranges from 1-10, with 1 being the most desirable. However, in most cases, you’ll hover around the 6 mark, which is considered average.

Quality Score judges the relevancy of your advertisement against the keyword you want to show for. This means, for argument's sake, if you have a landing page dedicated to van hire yet you're targeting ‘cars for sale’, you won't get very far.

That said, Google isn’t going to reject your advertisement outright because, after all, this would stop money from being spent. Instead, they’ll just charge you more to show your advertisement. This is a big reason why Google's ad revenues have increased by 16.5% to $32.6B.

How is Quality Score calculated? 

Quality Score is calculated by the combined performance of three metrics:

  • Landing page experience
  • Expected click-through-rate (CTR)
  • Ad relevance

Each of these is assigned a score - above average, average or below average - which is itself based on comparison with other advertisers targeting the same keywords over the previous 90 days.

As your ads circulate the web, their Quality Score is likely to change as CTR and ad text change. This highlights just how many moving parts there are regarding working out how much your Google Ads campaign will cost.

Your ad ranking

How does this affect what you pay? Let’s get mathematical.

Google will take a Quality Score and multiply it by the maximum amount you’re willing to pay. This gives you your Ad Ranking -  the position in which your ad appears within the results page. So:

Quality Score (out of 10) x maximum CPC = Ad rank. 

But Google will also figure out how much you pay:

Ad rank of the person below (in the auction)/ Quality Score + £0.01 = Cost

If your Quality Score is 6 (pretty much the average) and the next bidder’s Ad Rank is 15, the formula will be:

(15/6) + £0.01 = £2.51

how much does google ads cost

How can you reduce your Google Ads spend?

Now we’ve covered the factors that affect the cost of Google Ads; there’s now the issues of too much cost. You don’t want to shell out loads on expensive Ads campaigns that offer little return on investment. More than anyone, we understand the marketing game is one meant for cost-effectiveness.

So how can you limit your Google Ads spend?

Negative keywords

One of the major features of Google Ads removes the keywords you don’t want to show for, otherwise known as negative keywords.

Stopping your ads showing things unrelated to your advertisement can stop irrelevant clicks from coming through, minimising your cost and improving your CTR. This improves your quality score in the long run.

Our blog on negative keywords can give you extra information.

Geo-targeting

This feature is often overlooked but you can limit your campaigns to only show to people in a certain geographical area. Reducing irrelevant clicks and driving more local conversions, what’s not to love about that?

Ad scheduling

We’ve discussed who to prevent showing your ads to, but you can also choose when to show your ads.

Use campaigns with the All features setting enabled (shown within the settings tab). You can then make a schedule best to suit you, whether it’s when you’re in the office to take calls or when people have some leisure time to do some shopping. Your ads, your choice!

So how much does Google Ads cost?

Truth be told, you’ll never be able to put an accurate cost of running a Google Ads campaign because it’s a complex series of fine-tuning and external factors.

The highly competitive nature of PPC and Google Ads means the playing field is constantly changing. The best way to work out a cost before a campaign is to decide on your maximum budget, then try to get the best possible ROI through effective planning and execution.

The benefits of utilising PPC alongside your inbound marketing methodology are huge. Where inbound can take six to nine months to take full effect, your Google Ads can be up and running within a few hours. 

This enables more flexibility as you can easily create and turn off campaigns to dovetail seamlessly with your content strategy. You can run display campaigns in line with your email marketing campaign and use remarketing to target those you fetch to your site. 

PPC gives users the chance to enhance their inbound strategy in a way that hasn't been available before. While inbound is working away, PPC can help you get some quick wins to keep your boss happy in the meantime.

How PPC complements your first year of inbound

There’s a lot that goes into an inbound strategy to make it work and PPC, social media and emails are just a few. Everything contributes to the success of a campaign in its own unique way. 

To help you visualise just how it all fits together, as well as see what kind of results you can get, our download will give you a visual guide on what to expect throughout your first year of inbound. To get your copy, click on the link below.

Explore your first year in inbound

Originally Written: Apr 2016 by Samuel Banks
Updated: March 2021 by Jack Cribb