What factors determine Google Ads pricing?

Google Ads costs depend on several factors:

1. Industry

One of the biggest factors that influences Google Ads pricing is your industry. Certain industries are more competitive than others. For example, legal, accounting, and real estate industries have some of the most competitive keywords in Google Ads, which means you’ll need to pay a higher CPC. And average CPC of Google Search Network is usually higher than Google Display Network.

For perspective into your industry, check out this breakdown of CPC rates on Google Ads:

The Legal industry, for example, pays an average of $7 per click. In most cases, industries with a higher CPC spend more on Google Ads.

2. Market Trends and Keywords

Your audiences’ needs and shopping trends may change overtime, which means you might need to alter your keyword bidding strategy. The average CPC may go up and down overtime as well as consumer trends shift. Depending on your industry and keywords you want to target, you could spend a higher or lower CPC than the average business.

3. Bid and Budget

Another factor that can determine Google Ads pricing is your bid amount and budget. You can set your Bid, your daily and monthly budget to whatever fits your advertising budget. It’s important to note that they influence whether it’s competitive to other bidders, and in the end, the CPC cost on Google Ads.

4. Ad Quality Score

Quality Score is a measurement of your ads’ quality and relevance. It usually ranges from a score of 1-10 and evaluates your ads’ landing page experience, keywords and click-through rate (CTR). The goal is to have a Quality Score as close to 10 as possible. A higher Quality Score means that Google sees your ad as relevant and providing an experience that helps you get a higher placement in the SERPs.

A high Quality Score can help you earn a higher rank in the search results. If you have a lower Quality Score, you may need to place a higher bid to earn a top placement.

How does Google Ads determine your CPC?

1. Quality Score

Your Quality Score ranges on a scale from one to 10 determined by your ad’s landing page and its experience and relevance to the keyword.

2. Ad Rank

Google calculates your Ad Rank by using the following formula:

Max bid X Quality Score = Ad Rank

Ads that have the highest Ad Rank will earn top spots in the search results.

3. Cost-Per-Click

If your ad gets shown in the search results, you’ll only pay when someone clicks on it. Google Ads determines your CPC with:

Ad Rank of the ad below yours / Quality Score + $.01 = CPC

This makes it possible for companies with smaller advertising budgets to compete with other companies. For example, you could pay less CPC than other ads who ranks below you because your ad has a higher Quality Score.

How much do small businesses spend on Googld Ads?

Results show that 62% of respondents spend $100 - $10,000 per month on Google Ads on average. Actually, your business may spend more less than this amount depending on your industry and your chosen ad network.

Professional PPC management

A PPC Agency, like ShopliveX, develops, launches, and manages your paid advertising campaigns on platforms like Google Ads, and helps improve your Google Ads optimization score. ShopliveX provide industry-competivie PPC service pack for businesses that needs optimize for Google Ads.

Just contact us online or mail to amy@shoplivex.com to speak with an experienced strategist about Google Ads pricing for your business!