What is the cost of running Google Ads? Are Google Ads Expensive?

What is the cost of running Google Ads? Are Google Ads Expensive?

This is the question I always get throughout my 7 years in performance marketing. There are many ways to answer this and it is quite a subjective question.

Compared to traditional media like Tv Ads slots, Radio Ads, and Newspapers, it’s way cheaper. It costs only a tiny fraction compared to the traditional media mentioned. Compared to dishing out flyers at the local shopping mall or daily for 1 week, it may cost about the same. The only difference is that flyers are being distributed without any sort of measurement or targeting and Google Ads offers lots more. So in this regard, Google Ads is cheaper. Compared to Social Media, LinkedIn is definitely more expensive. Compared to Meta Ads, it depends on the metric used. It may be on par or just a tad more costly due to the inventory that you can leverage. 

So, how to know how much you will be spending when you set out a campaign? There are 2 ways to go about the cost of Google Ads. 

1. Set your budget at the start.
   Dedicate a fixed budget for a 30-day period and spend within the allocated budget in the month. This is what most businesses do, especially when on a tight budget.
2. Set a budget based on the amount of traffic you would like to receive.
   Before embarking on your campaign, you can get a good estimate of how much a click will cost from your keyword research. You should have an idea of how much a click will cost in the low range and the high range. If it is your 1st time, you can take an average of the low and high and use that as an estimated cost per click. You then sum up the cost per click of every single keyword you would like to bid on and you get an estimated cost of getting 1 click from each keyword you are bidding on. Then times the number of traffic you would like to target for the month. That would be the budget you can look at for the 30day window.

If you have been running ads for some months, you can have a better forecast using the performance planner.

To keep costs low on your cost per click (CPC), you will need to make sure to optimize your campaigns, ad groups, keywords, and ads to their full potential. Make sure you get a quality score as close to 10/10 as possible. The higher the score, the more optimized your CPC is. It is always recommended to get your SEO strategy running at the same time as your Google Ads. As you are optimizing your website for SEO, you are indirectly optimizing it to get a better landing page experience score and ad relevance score that will improve your overall quality score. By doing this, you will have a chance to get a CPC that is sometimes lower than the low CPC range indicated in your keyword research.

So is Google Ads expensive? How much it costs depends on the level of competition you are facing for the keywords you are bidding on and how optimized your website and campaign setup is. 

How much do Google Ads cost? Well, there is no minimum spend required but from experience, you need to look at least $1,500 per month to give the system enough data to learn from and to tailor your campaigns towards success. This being said, it does not mean that $500 will not work. I have personally run ads on a $500 per month budget for a local business before collecting enquiries and it works (based on feedback given by the client). It all depends on your business perspective. Getting a Google Ads expert to run a campaign cost more than that. Whether or not it makes business sense, depends on the different business strategies.