How much does google charge for advertising?
How Google AdWords advertising costs work
A question I recieve a lot from “newbies” wanting to start advertising with Google AdWords is, how much does google charge for advertising?
There are actually multiple ways, of how Google AdWords can charge money for your marketing activities. The most common is where you pay for each click on your ad. If you are planning to advertise with banner ads, you also have the possibility to pay CPM (Cost Per mill – where you pay per 1000 ad impressions). Which means you will pay x amount of $ every time your ad is being shown 1000 times.
It is almost always recommended to pay for each click, when using AdWords. There are more reasons for this. One is that you will receive much better data, making it easier for you to optimize in the future.
Before diving into how much Google charge for advertising, I will briefly explain how your ads will appear. This is a big factor, in understanding how much you pay.
The AdWords bid-auctions
Every time a person enters a search query into google, there is a big chance of some ads showing. However, if no advertisers are bidding (willing to show their ads) on a search query, it means that it is not profitable. In order for ads to be shown, advertisers must have booked the search term(s) as a keyword in their campaign.
I doubt you will see any ads when searching for the best beer. Not a lot of people buy beer online. If you do though, that’s nice. (I tried, and none showed). However, if you search for “adwords agency”, I’m pretty sure you will see some ads.
Before these ads are shown, they all go through an auction against each other. The auction, performed by google, includes a number of factors. It all comes down to your ad rank, and in determining your ad rank, Google mainly relies on:
- Highest amount the advertiser wants to pay for a click (Max CPC)
- Your keywords quality score
- Expected impact of your ad extensions
In determining your keywords quality score, google uses even more factors. They are:
- Expected click through rate on your ad (based on previous data in Googles system)
- How relevant you ad for the search and the keyword
- The experience of your landing page (Nice, smooth landing page is obviously better than slow and fugly)
CPC – Cost per Click, when finding out how much does google charge for advertising
In finding out how much does google charge for advertising, you must learn Cost per Click. So how much are you actually going to pay for a click?
That varies highly, including the factors you see above. Your cost per click will almost never be the same, even though it’s the same keyword showing the same ad. You will most likely have competitors on your keywords, and they also want to show their ads. This will also affect how much you pay per click.
I’m going to assume you have a limited budget (as most advertisers do). If that is the case, hopefully you have also chosen the option to show your ads evenly throughout the day. This will most likely also be the case of your keyword-competitors. This can also have an effect of how much you pay for a click. If your competitors have run out of their budgets, or are close to, you can end up paying a lot less later in the day. Because the competition is lower.
How much does google charge for advertising ?
Unless your bid (max cpc) is just high enough to show your ad on the first page, you will almost never pay the full max cpc. The reason is how the auction system works. Google wants to show you relevant search results, when you are searching. So if someone searches for an adwords agency, you will most likely not have success advertising for your business that makes wordpress websites.
If you have a very relevant ad and landing page to your keyword, you are in a good place. You can even get a better place in the auction (meaning your ad appears closer to the top), and still pay less than those below you.
That means no-one can come in with a big budget, and just out-bid everyone (well maybe they can, but they will have to pay a ridiculous amount per click). You will always have the ability to beat them with quality score and ad rank.
Most expensive keywords
A funny thing to know. There are many industries with unbelievably high cost per clicks. Especially keywords within insurance, loans, attorney, and betting. They are usually above 50$ per click. Yep, every time you click on an insurance, loan or attorney related at, it costs them alot of money. I once managed an account, where I saw an almost 60$ cost for a single click. This particular keyword where in the industry of online gambling, which is also a big industry with many competitors.