Here's a high-level, TL;DR preview of what you'll learn in more detail in this guide:. The first step towards reducing your Google Ads costs is finding out where you're struggling. Get a free Google Ads account audit today! One of the biggest misconceptions about Google Ads is that whomever has the most money to spend has the most influence.
Google Ads functions in essentially the same way as an auction. The ad auction begins when a user enters a search query , after which Google determines whether the query contains keywords that advertisers are currently bidding on. The purpose of the auction is to determine Ad Rank, or where each ad will be positioned.
The auction determines the inclusion and placement of ads according to the Ad Rank formula based on two main factors — maximum bid and Quality Score :. Check out these resources to learn more:. This formula looks like this:. Notice how Advertiser I can pay less for a higher position due to their better Quality Score?
This is essentially how Google Ads works in a nutshell. A common scenario that many newcomers to paid search find themselves in is when their advertising budget gets spent much more quickly than they anticipated. Understandably, this can be quite a shock. You can think of ad budgets in the same way you would about any other budget. You start with a core figure that will represent the majority of your ad budget, and allow for a little leeway in case things change or something goes wrong.
One way to start budgeting a PPC account is on a per-campaign basis. Each campaign has its own unique settings tab in Google Ads. This allows you to control specific parameters of each campaign independently of other campaigns in your account.
Each campaign should have its own daily budget. For example, a campaign advertising your best-selling product may be more important to your business than another campaign promoting content to prospective customers at the top of the funnel. In situations like this, you might want to allocate a larger daily budget to the product campaign.
Using these figures, you can calculate an estimated daily budget:. However, the actual amount you could be charged per click can change, depending on the variables of each individual ad auction.
Sounds simple enough, right? Well, there are several factors you should consider that can impact your PPC budget, the first of which is dayparting. Also known as ad scheduling, dayparting is the practice of specifying when you want your ads to appear to prospective customers. Although your ads will still have to go through the ad auction process, you can tell Google when you want your ads to be displayed. This is especially useful for local businesses that want to drive customers to a physical location through their ads.
If you run a bakery that closes at 7 p. Alternatively, you can specify that your ads run continually throughout the day, but allocate a greater portion of your daily budget for hours during which you want increased visibility. To learn more about dayparting and ad scheduling, check out this guide.
Just as you can allocate more of your budget to certain times of day, you can also spend more of your budget on certain geographical areas. This technique is known as geotargeting. Geotargeting allows you to prioritize the display of your ads to searches coming from specific areas.
These areas can be as large as a state or province, or as small as a three-block radius from your store. For example, you may want your ads to appear alongside relevant searches in a particular state, but you could also allocate more budget to searches conducted in a specific city or even neighborhood.
To learn more about geotargeting and local PPC, check out this guide. Long gone are the days when prospects searched exclusively from desktop browsers. Today, consumers are searching the Web across numerous devices often at the same time , which means you need to pay attention to where your most valuable leads are coming from. This is where device targeting comes into play.
You could specify that a portion of your budget be used for desktop, but a greater portion be allocated to mobile devices. Setting a daily budget and understanding how it will be depleted are the most important aspects of budgeting for PPC, but it pays to be aware of how advanced targeting options can affect your ad spend. That's on the search network. However, in super-competitive markets, clicks can get much pricier.
Listed below are the most expensive keyword categories in Google Ads, and the average cost-per-click of each. You can check out the full infographic and learn about the methodology behind the data here. The results were similar, but there are some new highly expensive keyword niches on the list, and average CPC's unsurprisingly have gone up. You can check out the new list of the top 25 most expensive keywords here.
As Bing is growing in market share, we decided to conduct a similar study to find the most expensive keywords in Bing Ads. Listed below are the most expensive keyword categories in Bing Ads, as well as the average cost-per-click for each:.
You can see the full infographic and the category breakdown here. Of course, these are just some of the hundreds of thousands of keywords that businesses all over the world are bidding on, and costs can vary widely depending on a wide range of factors.
Furthermore, it's important to take ROI into account. These industries can afford high CPC's because the average lifetime value of a customer is so high. People sometimes like to point at the grand, show-stopping keyword categories above as a definitive example of how expensive PPC can be. The reality, however, is that these keyword categories only make up a small portion of total search volumes. Long-tail keywords actually account for the majority of Web searches. This is the kind of opportunity that long-tail keyword targeting presents to advertisers.
In addition to making up the vast majority of searches, long-tail keywords are also often significantly cheaper than shorter keyword-rich queries and can have as much — if not more — commercial intent. Unfortunately, this is another question without an easy answer. First, we need to look at overall spend data by industry. WordStream looked into the overall spend of these and other industry verticals , and we saw there was a degree of overlap between the average CPC of a keyword category and the total spend in that industry:.
Clearly, they're getting good ROI on that spend! For one, a handful of major brands dominated each individual category — businesses that likely bear little resemblance to those who are considering getting started in Google Ads check out the full infographic here.
You don't need to spend millions on Google Ads to make it work! As you might expect, Erin told me that the amount that our clients spend on PPC varies widely. Your ad budget will always be the largest, most direct cost associated with your PPC campaigns. There are other potential costs you may have to consider, depending on your business, marketing goals, and individual situation. Some small businesses opt to have an agency handle their PPC work for them.
This approach offers several benefits, such as minimal personal investment of time and effort in actually managing your PPC account. Agencies can also boast many years of experience in PPC account management, making them trustworthy partners who can offer expert advice and guidance.
Even smaller boutique agencies will take a percentage of your ad spend, regardless of ROI. Google Ads is a great advertising platform. It offers advertisers a high degree of control over the precise variables in their accounts, and can be extremely powerful in the right hands.
The biggest complaint we hear from our clients is that, for all its power, Google Adscan be intimidating — especially to new advertisers. Some business owners opt to manage their PPC accounts manually, and I get that. Times are tough, and every penny counts. Originally from the U. Home Blog. Last updated: August 5, Paid Search Marketing. Here's a high-level, TL;DR preview of what you'll learn in more detail in this guide: Google Ads is based on an auction system that rewards businesses who have high-quality ad campaigns with lower costs and better ad placement.
You can exercise tight control over how your Google Ads budget is spent using tactics like ad scheduling, geotargeting, and device targeting. If you're advertising in Display, try using our free Smart Ads Creator to build pristine new display ads in minutes. These are generally highly competitive keywords in industries that have high customer lifetime values, like law and insurance. Now, let's examine these points about Google Ads costs more closely.
How Does Google Ads Work? The Ad Auction The ad auction begins when a user enters a search query , after which Google determines whether the query contains keywords that advertisers are currently bidding on.
Dan Shewan. Find out if you're making mistakes with Google Ads. Sign up to get our top tips and tricks weekly! Sign Me Up! Related Content. View the discussion thread.