How Much Does It Cost To Advertise on Google?

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  • 4/2/2021
    Things have changed a lot here at thunder::tech over our past 20+ years in business: technology, communication, technology again, and, of course, the ruler of all things internet, Google. Back in 2013, we addressed a question that we often received from our clients “How much does it cost to advertise on Google?” And guess what? Here we are in 2021, with so much that has changed, and it is still something that often comes up with our clients. The answer is what has evolved quite a bit.
    Most people who run a business know they should be advertising on Google in some shape or form (if you don’t, that’s okay, we’re here to help!). Whether that is pay-per-click (PPC), or search engine optimization (SEO), both are going to cost you money. The questions then are, how much is enough to make an impact on your business and which makes sense for your business?

    What Do I Need to Know Before Advertising on Google?

    There are 4 key questions, an advertiser needs to have clearly defined before launching any ads. 
    1. How much money does your business have ready for its marketing budget?
    2. What annual goals are you hoping to contribute to?
    3. What/Who is your business targeting?
    4. What message is your business advertising?
    In order for us to get very specific about the costs of advertising on google, it’s important to come with these questions answered. Launching YouTube ads is a very different cost and strategy compared to branded pay per click campaigns. Having these questions answered allows an agency to tell you what you could expect to get in return for your estimated budget, and then they can help further guide you towards a more optimal strategy. 

    How Much Does It Cost to Advertise on Google?

    OPTION 1: Google Ads PPC

    The best way to illustrate the answer to that question is by showing you an example. Let’s say that we own a business, we’ll call it The Cookie Superstore. The Cookie Superstore is both a local bakery and online seller of all things related to baking cookies.We are looking to increase ready traffic on our site from customers who are ready to purchase, so I decided to invest some money in PPC advertising through Google Ads. Let’s go through the steps I need to take to figure out if a.) I can afford it and b.) whether or not it’s a lucrative business decision.
    How to Determine Your Budget for Google Ads
    I figure out that I can invest $2,000 per month for PPC Advertising by answering the following questions: Without diving too deep in this article, we’ve linked to one that we found particularly helpful at helping answer how to determine your business’s marketing budget.
    • What are the costs of my products/services? If you have a lot of products or services, what is the average cost?
    • What are my profit margins?
    • What is the potential cost/profit of new leads?
    If you’re a new business, evaluate your business plan. How does PPC fit in? How will it add value to your bottom line?
    How to Use the Google Keyword Planner to Understand How Far a Budget Can Go
    Now that I have my budget for the month I need to figure out my strategy. How far will my $2,000 go in the space that I’m in? The business model of Google Ads is simple. You create an account, write ads, target specific keywords that are relevant to your business, and then you bid on those keywords against your competitors. The highest bidder, and the bidder with the most relevant content, wins. There is obviously a lot of strategy and planning that goes into the creation of the ads and keywords that are right for your business and your audience, but that’s the gist.
    To determine how many campaigns and ad groups to run, as well as how many keywords my budget will allow The Cookie Superstore to bid on, I’ll need to figure out how expensive keywords in my industry are. As a rule of thumb, branded keywords (for example, “The Cookie Superstore cookbook” or “The Cookie Superstore”) are cheaper than non-branded keywords (“Bakery in Cleveland” or “Cookbook for Cookies”).
    Now let me introduce you to your new best friend when figuring out how much it costs to advertise on Google for your business, the Google Keyword Planner. This tool will tell you all you need to know about potential keyword ideas, but what we’re most concerned about is the price and the competition. Below, I’ve entered some keywords for The Cookie Superstore example. If you are looking for a comprehensive dive into keyword planner we’ve written that too.

    Which Keywords Should my Business Prioritize?
    As we can see, many of the keywords that we would ideally target are cheap but they have a lot of volume and competition. If I take my monthly budget of $2,000 and break that down to a daily budget (which you will have to do when you set up your account), I can spend about $64.50 per day in a month with 31 days. That means that if I bid on a keyword like “cookie cutters,” which costs about $0.87 per click at the top of the results, we could afford about 74 clicks per day.
    The key is understanding what your audience is looking for. In other words, ask yourself, what’s going to make them convert to purchase your product or, in this case, purchase cookie baking tools from our store? I can use my whole daily budget on 74 clicks on the same keyword, which makes sense if that keyword is going to lead people down the path of purchasing, or I can keep doing research to find a variety of keywords that cost less and allow my budget to stretch, which may make more sense to ensure a wider range of audiences.
    I’ll select my keywords, set up my campaigns, write my ads and launch Maggie’s Marketing’s very first PPC advertising.
    What to do Post Google Ads Campaign Launch
    Once I launch, I’m not done. Analysis is the most important step of this process. This means analyzing the keywords I’m targeting and determining how much leads are costing me. Do I need to raise my budget to get more qualified leads? How much can I afford? PPC advertising is a constant process of launching, evaluating, editing and relaunching my edits. If you are interested in reading more, we’ve written a piece on improving performance on landing pages that can help your campaigns thrive.

    Option 2: Search Engine Optimization

    Much more elusive than PPC is the second kind of Google advertising, non-paid or organic search results. While using Google Ads can be great to get your website on the first page of Google, it is geared more toward immediate, short-term strategy. Search Engine Optimization (SEO) focuses on long-term maintenance, growth and strategy. Both have great benefits and we recommend our clients use a mix of both SEO and PPC to satisfy their goals as a business.
    The budget approach for SEO is a bit more complex than PPC because the contribution to your ROI is not as one-to-one as PPC. Let’s go back to our The Cookie Superstore example. To figure out if SEO is in the budget, answer the following questions:
    • Who will do the content analyses/updates/additions to my website? This is important because if I am doing my own updates, I won’t have to pay an outside source, like an agency. However, I will have to take the time to do research, implement changes, test, analyze, re-analyze and write content. The cost of time can become much more than paying an agency to strategize and implement on my behalf, not to mention all of the specifics I’d need to learn to understand if my strategy is optimal.
    • What are the potential costs that I am able to incur? As a follow up to that, what is the potential growth I would incur with changes implemented?
    • What is The Cookie Superstore’s current visibility in search right now?
    • Where does my business stand in comparison to my competitors?
    • What are the gaps in my content, keywords and search presence?
    • How will the changes/recommendations be implemented?
    After answering these questions and fully understanding the impact that SEO will have on my business, I can better determine how much I’m able to spend per month. Keep in mind, as this can be an aggressive or conservative budget based on your business. Both budget and approach will affect your timeline as SEO takes more time to show influence on your bottom line.

    When in doubt, ask for help

    It’s easy to choose one of these options and run with it. It’s also easy to start implementing both and stop one if you’re not seeing results. The most important thing is the strategy behind your decision-making and the data you use to back up that strategy. As the business owner of The Cookie Superstore, I might turn to some of my employees who are subject-matter experts in baking and see how they can help produce content that fits into a cohesive strategy.
    In most cases, you will not have subject matter experts at your beck and call, and it would be best to consult outside sources or consider hiring an agency. Most importantly, do your research. Whether you’re hiring someone or not, you’ll want to get the best fit for you and your business goals. If you are looking for me, we also have a podcast episode on this same topic. Episode 115 all about advertising on Google will surely help provide more context. 
    Still stuck on where to begin? Write us a note, give us a call, send smoke signals, a carrier pigeon… you get the drift. We’re happy to help you leverage your business through a stronger digital footprint.
    Editor’s Note: This post was originally published in August 2013 and has been completely revamped and updated for accuracy and comprehensiveness. 
    About the author::

    Matt Schott is an Optimization Specialist at thunder::tech, who leverages data visualizations to help clients quickly grasp the whole story. In his free time, Matt is a reader of books, climber of rocks, and player of guitars.

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