When choosing Google Ads as a channel to advertise products and services and reach potential customers, cost is a factor that many advertisers and businesses are concerned about. How much does it cost to run Google Ads price per month? Determining advertising costs helps businesses have an overall view of the advertising campaign and make suitable adjustments to achieve revenue growth and cost optimization. In today’s article, Optimal FB Agency will share more about this issue. Follow now!
Understanding Google Ads pricing structure
Google Ads’ pricing structure is based on an auction and bidding process in which advertisers bid on keywords to show their ads to potential customers. Cost per ad click (CPC) is determined by ad rank and is based on maximum bid and quality score.
When a user enters a search query, Google Ads runs an ad auction to determine which ads will show on the search results page. The auction takes into account each advertiser’s maximum bid and quality score. Where the maximum bid is the highest amount an advertiser is willing to pay for a click on their ad. Quality Score is a measure of an ad’s relevance to users.
The higher the ad’s rating, the lower the CPC. Quality Score is determined by ad relevance, landing page experience, and expected click-through rate (CTR). Other factors that affect CPC and ad rank include keyword competition, budget, and ad format.
The cost of running Google Ads each month is determined by the auction and bidding process, the quality score of the ad, and the level of keyword competition. Advertisers can improve ad rankings and reduce CPCs by creating high-quality ads and landing pages that match users’ search queries. Additionally, you can refer to more information about: Unused budget Facebook ads
Popular forms of Google Ads advertising fees
Currently, there are 3 popular forms of Google advertising fees:
Cost per click (CPC)
This is the cost the advertiser must pay each time someone clicks on the ad. Advertisers will have the right to decide the amount for each ad click through keyword bidding. Google Search Ads campaigns often use this advertising fee method.
Cost per thousand impressions (CPM)
With this form, the cost will be calculated per 1,000 ad impressions to the target audience. CPM pricing will vary based on display ad placement, and campaign, and is typically used for Google display network ad campaigns. Before running an advertising campaign, you need to bid for 1,000 times your ad appears in places where customers can see it.
Cost per action (CPA)
This type of advertising charges per customer conversion action on your website after clicking on the ad. Includes actions such as: registering, filling out forms, downloading and installing applications or making purchases, etc. This method of advertising fees is often used in Google Shopping ads.
How much does it cost to run Google Ads each month?
To start a Google Ads campaign, you need to pay a certain ad activation fee. With prepayment, you need to deposit at least 160,000 VND. If you pay later, the accumulated expenses must reach 800,000 VND by the end of the month.
Most businesses spend between $9000 and $10,000 per month on Google Ads which equates to about $300 to $333 per day. Some businesses may spend $50 per month while others may spend up to $500,000 per month.
However, costs can vary depending on various factors such as the industry, target audience, keywords, competition, and effectiveness of the advertising campaign.
When setting a monthly budget for Google Ads, you need to determine your goals, sales cycle, and customer value. Specifically, consider the lifetime value of a customer. From there, determine the amount of money you are willing to spend to get a customer.
This means if the lifetime value of a customer is $500 you are willing to spend 10% ($50) to attract them. Also, the conversion rate is 2%, and you need to spend $1000 to attract 20 customers that month.
Factors affecting Google Ads advertising costs
The cost of running Google Ads each month is affected by the following factors:
Business
For each business industry, there is a different level of competition and conversion ability. This leads to differences in Google advertising costs between industries. For industries with a high level of competition, the CPC will be higher than for industries with low competition. Some large and highly competitive industries include real estate, furniture,…
Advertising position
Each location where you want to place ads will also significantly affect the cost of Google Ads. If your ad is displayed at the top of the Google search results page, the cost will be higher. Or if ads displayed on Google’s display network will have different costs than ads displayed on search pages. In addition, advertising costs are also different in each different country.
Targeting settings
If you want better control over your Google Ads costs, you can use audience, location, or device targeting options and ad scheduling. With narrower ad campaigns, higher targeting can also result in higher CPCs. However, this can result in your ad getting more qualified leads.
Keyword
This is one of the factors affecting Google’s advertising costs. If you have keywords with high search volume and high competition for ads, your cost per click (CPC) will increase. Instead, you should choose specific keywords or niche keywords so that even though there are no searches, the conversion rate is high and the competition is low. This will help you optimize costs when implementing a Google Ads campaign.
Quality score
Quality Score affects ad rankings and Google Ads costs. You need to pay attention to improving your ad quality score to increase ad rankings and optimize costs. Because the higher the quality score of an ad, the lower the click cost will be.
Bid
Depending on the bid strategy you set will impact how much you pay per ad click or conversion. If you are new to running Google ads, you should choose automatic bidding, but if you have experience, you should set manual bids. Furthermore, instead of bidding on broad keywords, you should focus on targeted keywords and specific keywords with high conversion rates to optimize costs.
How to optimize Google advertising costs
You not only need to understand the factors that affect the cost of running Google Ads each month but also need to know how to optimize costs according to the following methods:
Choose effective keywords
Researching and selecting keywords with high click-through rates (CTR), low competition, and closely related to products/services is one of the ways to significantly reduce the cost of running ads on Google. This can help increase visibility and conversion rates for your ads while avoiding wasting your budget on keywords that aren’t performing well.
Adjust bids
Setting bids that align with your campaign goals is the best way to control your advertising budget. You need to regularly monitor your ads to come up with appropriate bid adjustments. Increase your bids for keywords or ads that are getting a lot of clicks and conversions. At the same time, reduce ads that do not perform well.
Conduct A/B testing
This method allows advertisers to test and compare advertising effectiveness when changing certain campaign elements. Thanks to that, businesses can evaluate and make decisions to optimize the most appropriate Google advertising fees.
Choose the right ad format
Consider and combine Google advertising formats to expand your reach to target customers while still controlling advertising costs effectively.
Landing page optimization
If you want to improve Google Ads campaign performance and reduce advertising costs, optimize your landing page. Designing a landing page with a beautiful interface and fast page loading speed ensures full information and content related to the advertisement is provided. This will improve customer experience, increase conversion rates and quality scores, and effectively optimize advertising costs.
Above are all the detailed answers about how much it costs to run Google Ads each month. Hopefully, this information will help you know how to optimize Google Ads campaign performance and minimize advertising costs.
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Frequently asked questions
To check the effectiveness of running Google Ads compared to the cost, you can use the analysis and reporting tools available in Google Ads. You can check the effectiveness of your advertising campaign through conversion rate, number of clicks on the ad, number of times the ad is displayed on Google search results page, cost per click ( CPC),…
Google calculates your cost per click based on your ad rank. It is calculated as the product of the maximum bid for a particular keyword with the quality score of the ad. The higher the ad’s rating, the lower the click cost and the higher the number of clicks and conversion rates.
