How much does advertising on Google ads cost?

Posted By Visitor Analytics & SEO Tools Robert on 21-11-2023 19:10:24

Description

Advertising rates at Google are necessarily a crucial question for all advertisers, as the American company is so omnipresent in the digital world today. When making an advertising investment, it is legitimate to ask the question of the price of the operation to determine a budget accordingly and subsequently calculate its return on investment. Unfortunately, Google Ads campaigns have a very complex economic model that does not allow a simple answer to the question.

 

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Paid SEO on Google: how does it work?

The first thing we are going to explain in our article is how paid search on Google works overall. Investing in the Google advertising network gives you the opportunity to appear favorably in search results, in videos within the YouTube network, or to display your ads on Google partner advertising spaces.

The cost of your campaigns with Google Adwords, which is today called Google Ads, depends on several variables.

Google Ads has always operated on the basis of an auction system coupled with verification of the relevance and quality of the ads.

The basic operation of Google's paid search model is as follows:

    - User searches the network
    - Ads are sorted
    - Ads are selected and displayed
    - Ads are classified

Google's search engine takes into account the experience of its users and gives advertisers the opportunity to place their advertisements favorably if they meet the imposed criteria and submit bids capable of competing with the competition. As part of the search network, keywords are at the center of the operation of the advertising agency.

Advertisers integrate keywords that they consider relevant to their campaigns, write ads and finally configure bids.

When a user types a keyword corresponding to the advertiser's Google Ads campaign, an ad is displayed on the Google search page.

If the user clicks on the ad, the advertiser is billed for a click and the Internet user is redirected to the website corresponding to the ad. The model here is called “cost per click”, or “CPC” and billing therefore depends on the number of clicks. The advertiser defines a budget that Google spends based on competition and opportunities on its network.

The average cost per click with Google Ads is between €1 and €2 on the search network and the average CPC on the Display network is generally less than €1.

There are some particularly expensive keywords in Google Ads and prices can go up to $50 or more for each click.

The very high prices concern very competitive keywords, such as those related to the legal, banking and insurance professions.

 

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The richest necessarily the best placed?

If we stopped there, you could easily conclude that advertisers with a large budget are necessarily at an advantage. It’s obvious, but money isn’t everything!

There are many other determining factors that make a Google Ads campaign successful, such as relevance, click-through rate and many other elements that we will look at in detail later.
Auctions on Google ADS

When a user makes a query on the Google search network, the advertising network displays a list of websites.

Let's take a concrete example in the field of insurance with the following query: car insurance


As you can see in the illustration below, we made a query for the keyword “auto insurance” (1). Google then offers us a list of websites and more particularly Google ADS ads (2, 3) initially. These ads appear favorably in the network by being well placed.

Websites that appear at the top of the first page of search results generally generate significant traffic.

If we go down into the search results, we will end up arriving at what we call “organic” results. This means that these websites do not use Google's paid SEO system, on the contrary they rely on their natural referencing (SEO).

 

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Natural referencing or SEO is not the subject of our article today, but if you are interested in setting up natural referencing campaigns, our SEO guide might interest you.

 


Let's return to the subject that interests us today: the economic model of Google ADS

Ranking in search results is a combination of maximum bid and quality score, i.e. the relevance of the ad.

Here is the formula that defines the ranking in search results:

AD RANK = Bid ​​x quality score


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(1) Search result ranking is the combination of the most competitive bid (2) multiplied by the quality score (3).

Let's focus on the quality score formula for a moment, but for a detailed article on this topic, check out our ultimate guide to Google AdWords quality score.
How Google Determines Ranking in Search Results

When an Internet user makes a query on the Google network, the search engine's algorithms compare the different advertisers in real time to establish a ranking in the SERPs.

Here is what is taken into account in this ranking: the bidding strategy, and in particular the maximum bid that the advertiser can pay, the quality of the ads, the landing page and the click-through rate.

First position is therefore often won by advertisers who offer ads with high added value for Internet users.


Set up a Google Ads budget

There are several types of budgets that can be set up for Google ADS campaigns. The first of these is the test budget.

The test budget allows you to access the market and have a more precise vision of the competition and the cost of keywords.

Obviously, the tools integrated into Google Ads offer a general overview of costs, but carrying out a full-scale test with a limited budget is often a good way to retrieve recent data.

The second budget to plan concerns the construction of your supports. While creating a Google advertising account is free, creating the landing page and ads is quite technical, which may lead you to work with service providers to ensure management and monitoring.

It is therefore useful to take stock of the resources available within your company, and to see if you have all the skills at hand.

If you do not have these resources at your disposal, you will have to hire service providers, which will inflate your budget.

The third budget to determine is the amount you want to invest over a given period. Google Ads works with daily expenses, but you should know that a recent account needs time to find a place among the advertisers already present.

Your campaign budget which follows your testing and creation budget must correspond to the objectives you have set for yourself.

Remember that depending on your objectives, the expected return on investment will not necessarily be immediately palpable at the financial level.

If you decide to set up an advertising budget to generate new customers, then your results must be materialized by a visible return on investment.

If you choose to make an investment to develop your brand awareness or to announce an event, the ROI of your advertising campaign will be more difficult to estimate in the short term.

On the other hand, e-commerce sites can easily analyze their return on investment by comparing their sales figures with their advertising investment on Google Ads, as well as the number of clicks on the ads, the number of visits to the sales pages, etc.

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CPCs: variable cost

CPC (cost per click) campaigns can vary greatly and many factors come into play in their implementation. Setting up a MAX CPC gives advertisers the ability to cap the bid on one or more keywords.

The greater the competition, the higher the cost per click. It is most often a quality user experience that will give your advertisements an advantage in the case of an identical or lower bid.

Google’s “Keyword Planner” tool will allow you to obtain useful information for each keyword, such as its search volume, the level of competition, a suggested bid, etc.
One click does not guarantee a sale

Remember that a click never guarantees a sale. When an Internet user decides to click on one of your advertisements, they take a step in your direction, but there are still a few meters to go to finalize a purchase.

Only the implementation of a perfectly optimized conversion funnel will allow you to switch your prospects to the direction you want to take them: a hard and fast sale.

When you set up a Google Ads campaign and calculate your return on investment, do not neglect the importance of your own strategic decisions in the success or failure of your approach, and take into account all the parameters that we have seen previously.


CPCs: variable cost

CPC (cost per click) campaigns can vary greatly and many factors come into play in their implementation. Setting up a MAX CPC gives advertisers the ability to cap the bid on one or more keywords.

The greater the competition, the higher the cost per click. It is most often a quality user experience that will give your advertisements an advantage in the case of an identical or lower bid.

Google’s “Keyword Planner” tool will allow you to obtain useful information for each keyword, such as its search volume, the level of competition, a suggested bid, etc.
One click does not guarantee a sale

Remember that a click never guarantees a sale. When an Internet user decides to click on one of your advertisements, they take a step in your direction, but there are still a few meters to go to finalize a purchase.

Only the implementation of a perfectly optimized conversion funnel will allow you to switch your prospects to the direction you want to take them: a hard and fast sale.

When you set up a Google Ads campaign and calculate your return on investment, do not neglect the importance of your own strategic decisions in the success or failure of your approach, and take into account all the parameters that we have seen previously.



How much does the Google Display Network cost?

We focused the entire first part of our article on the cost and useful information relating to setting up a campaign on the search network. It is time, to be complete, to take an interest in Google's display networks and its business model.

If the search network operates mainly on the CPC (cost per click) model, the display network offers other models such as CPM (Cost per Mille), CPA (Cost per Action).

The “GDN” (Google Display Network) also offers choice spaces on third-party websites or on the video social network YouTube.
4 main types of announcements are available:

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Text ads on websites
    - Image ads on websites
    - Video ads on websites
    - Ads on mobile websites

Regarding the CPM (cost per thousand or thousand impressions), the advertiser pays each time an Internet user sees the ad and the economic model is calculated for a thousand impressions.

This type of strategy is often used as part of awareness campaigns and makes it possible to obtain significant visibility.

The CPC (Cost per click) corresponds to the amount paid by the advertiser for each click on their ad, as we have already seen.

CPA (cost per action) is a type of performance-related model in which the advertiser is charged based on the results obtained for a specific action taken by Internet users, such as pay per form. In this case we speak of CPL (cost per lead).
The principle of Google competition

Google still operates on the principle of competition between its spaces. This is a process that repeats for each query made on Google networks.

There are therefore different results constantly and depending on the competition at the precise moment of the search carried out by Internet users.

To ensure significant visibility, relevance and budget are the two key factors.
Relevance

Without going into the details of the Quality Score, relevance is a really important factor when setting up your advertising campaigns on Google. Offering relevant ads means you need to provide added value to Internet users.

If you place your ads on a specific keyword, make sure that it matches the search intent of Internet users. The more precise you are in the way you process search engine user requests, the more Google will allow you to display your ads at a lower cost on its network.

The landing page must also be perfectly aligned with your ad and match the users' search intent. There is no point trying to cheat or circumvent the system, because the algorithms of the world's most popular search engine will always be one step ahead.

If the Internet user clicks on one of your ads, they expect to find a relevant, precise and coherent response that meets their expectations.

 

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Work alone or with an agency?

When you decide to launch into advertising with the Google advertising network, you will certainly ask yourself the following question: “should I create my advertising account and manage it alone, or rather trust a Google partner agency? Who has the skills required to achieve my campaign objectives? »

If you've managed an advertising account before and have experience with digital marketing, you should be able to handle this on your own.

If you have never managed a Google Ads campaign, it is obviously recommended to use a specialized agency or to hire a service provider who has a minimum of experience in this area.

When you work with an agency, several business models can be put in place.

Some agencies take a percentage of your advertising expenses, others offer fixed or variable management fees.

The distribution of your ads is ensured by the agency via the Google advertising network and the budget is defined in advance in good agreement.

Tags: advertising on google, google ads

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