How Much Does AdWords Cost?

Have you ever wondered: how much does Adwords cost? Here is the breakdown so you can streamline your PPC campaigns and improve ROI.

Written by Samuel Banks
PPC |   5 minute read

The UK average cost-per-click of Google AdWords (now called Google Ads), on the Search Network, is between £0.66 and £1.32. 

It feels a lot like saying 'How long is a piece of string?' but answering 'how much does AdWords cost?' depends on a multitude of factors such as your industry, your daily budget, which network you want to operate on and even your end goals.

But how much your actual campaign costs depends on these factors:

  • The bid price of keywords in your industry or niche
  • Your quality score
  • Your ad ranking
  • Whether you use negative Keywords, Geo-targeting and ad scheduling

Update: Due to the popularity of this blog, we have recorded a short video overview:

The bid price of keywords in your industry or niche

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

Unfair? Yes, 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. Wordstream is considered an authority in PPC. With keywords costing in excess of £58 per click for keywords ‘casino’ and ‘online gambling’, it may put you slightly out of pocket to get those six people around the table.

But don’t let me put you off, your industry can actually ensure you pay 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 which cost next to nothing. You can then use these keywords in your own very Google Ads campaigns.

Google Ads is a series of fine tuning and unpredictable spend. That average figure has been calculated from converting the USD average spend to GBP, based on Wordstream's research. We wish we could give you a more exact figure, but the data simply doesn't exist because there are so many variables when it comes to working out Google Ads' cost.

Your quality score

google adwords

Image credit.

Don't fear, Costs Per Click (CPC) are merely an indication and are not the be-all and end-all. These figures provided by Google are not the definite costs and won't determine accurately how much your AdWords campaign is going to cost.

Google has its own method of determining how much you’ll pay for each click, which is 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’ve got a landing page dedicated to van hire yet you're targeting “cars for sale”, you’re not going to get very far.

But Google isn’t going to just reject your advertisement because, after all, this would stop money being spent at the end of the day. They’ll just charge you more to show your advertisement and it’s a big reason Google's ad revenues rose 16.5% to $32.6B.

With advances in technology, CFO Ruth Porat said: “We’re continuing to see tremendous opportunity in the Ads businesses. And beyond machine learning, we’re further investing to continue to enhance the experience for users and advertisers, and that’s across Mobile, Desktop and YouTube.” 

How Is Quality Score Calculated? 

Quality Score is calculated by a host of external factors, but primarily by Google judging your keyword relevancy and the user experience of your desired landing page. As your ads continue to be live, it will fluctuate as your click through rate and ad text changes.

This highlights just how many moving parts there are when it comes to working out how much your Google Ads campaign will cost.

Your ad rankingQuality score factory graphic by digital 22

How does this affect what you pay?

Google then takes your quality score and multiplies it by the maximum you’re willing to pay to give you your Ad Rank. This is the position in which your ad appears within the Search Engine Results Page.

Quality Score (out of 10) x Maximum CPC = Ad Rank. 

Then for Google to calculate how much you pay is determined by this formula:

The Ad Rank of the person below you (in the auction) / Quality Score + £0.01 = What you pay

So if your quality score is 10 and the next bidder’s Ad Rank is 15 you’ll get the following:

15 / 10 + 0.01 = £1.51

Whether you use negative keywords, Geo-targeting and ad scheduling

TIP: This is how you can cut your Google Ads spend. You didn’t think I was going to leave you with no actionable takeaways, did you?

Here are some ways you can limit your 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 for things unrelated to your advertisement can stop irrelevant clicks coming through, both minimising your cost and improving your click-through-rate. 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 so they only show to people in a certain geographical area.

Reduce irrelevant clicks and drive 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!

Ad Scheduling options in Google Ads, located in the Advanced Settings.

So, it's complicated...thinking about google ads

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 that the playing field is always 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 inline 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. Whilst 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 which makes it work. PPC, social media and emails are just a few. They all contribute to the success of a campaign in their own unique way. 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 Luckie-Rae Pepper