How Much Should I Spend On Google Ads? – contributed by Cutting Edge Digital

How much should I spend on Google Ads - Reeva Cutting

Probably the number one question I get about Google Ads is ‘how much should I spend on Google Ads?’.

While there is no one right answer to this question, here are my insights as a Google Ads specialist into how much you might need to spend on Google Ads to get great results.

How Does Google Ads Work?

Google Ads functions as an auction for each search made on Google.

Every time you search on Google, an auction happens behind the scenes. Google quickly works out what the user wants to see and which advertisers’ ads they will show in the results.

However, an auction implies that the highest bidder always wins, but this is not always the case when it comes to Google Ads.

Sure, your bid is a factor – bid too low and your ads may not show at all.

But there are other things like quality score, competition and location that can affect if your ad shows at all and where on the page it appears (read on for more about this).

How Much Does Google Ads Cost?

The answer to this is every marketer’s favourite phrase – it depends!

There is no set cost based solely on your business type, your product, or your service.

What Google Ads will cost you is determined by several different factors which we’ll explore next.

What Factors Influence The Cost Of Google Ads Clicks?

The biggest factors that influence how much you will need to spend on Google Ads are:

Your budget – what you’re prepared to spend per day or month on Google Ads clicks

Your keyword bids – the maximum you’re willing to pay for one click on your chosen keyword phrases

Your competition – who else is bidding on the same keyword phrases at the same time as you

Your industry – what your industry is (legal and financial keywords are super expensive compared to other niches)

Your quality score – how Google rates your keywords and ads based on things like the ad text relevance, your landing page relevance, and the expected click through rate (what % of people Google thinks will click on your ad)

Why Does The Cost Of Google Ads Vary So Much?

While there is no clear cut price I can give everyone about how much Google Ads will cost, I can usually work out a rough recommended budget per month based on the industry type and search volume and competition in your city, state, or country.

Business related services are usually the most expensive when it comes to costs per click (CPC – how much you will pay for each click on your Google ad).

These include legal services, financial services, and real estate services to name a few. Don’t be surprised to see costs per click anywhere from $40 to $400 PER CLICK. Not per month, per click!

But if you’re selling South African sweets in Australia, your cost per click could be as little as $0.01.

Generally, most industries will have a cost per click of somewhere between $1-3.

As a guide, here are some average costs per click (based on 6 months of data) for a few of my clients listed by business type:

Bookkeeping $8.24
Mediation $7.17
Physio & Chiro $4.16
Dental $3.84
Photography $2.51
Pool Renovations $2.48
Personalised Gifts $1.50
Yoga Studio $1.29
Imported Foods $0.19
Gym $1.44
Psychology $2.30

How Much Do I Need To Spend On Google Ads?

So how much YOU need to spend on Google Ads comes down to:

– what your industry is,

– how much a click will cost you, and

– what you need to spend to get results.

Google Ads should be all about getting a return on your investment.

$2000 might seem like a huge spend each month, but if one sale from this spend leads to a $20,000 sale, then it’s worth it!

Look at what your product or service sells for, and what you might need to spend on Google Ads, and reverse engineer how many sales you need to break even and then make a profit as well.

If you’re selling a $5 product but need to have a budget of $1000 per month for Google Ads, you’ll need to sell 200 products just to break even (more in fact once you factor in your own production costs, GST to Google and other potential costs).

For most clients I recommend a spend of no less than $600 per month on Google Ads.

This works out to around $20 per day, so any less than this will usually limit your visibility and not get you a good return on investment.

Most of my clients spend between $600 and $5000 per month on Google Ads, and this comes down to the factors mentioned above.

Are There Any Other Costs I Need To Know About?

In terms of other potential costs associated with Google Ads, there are some you need to know about.

GST – Google Ads charges GST in Australia so add 10% to your ad spend, as this is added on top of your costs for clicks

Google Ads Set Up Fees – as a Google Ads specialist, I charge a fee for setting up new Google Ads campaigns, even if you have campaigns already established (find out why here)

Ongoing Management Fees – Google Ads is not a set and forget platform, it needs to be regularly monitored to ensure Google isn’t wasting your budget on irrelevant clicks and poor placements

Has this blog helped you work out how much you may need to spend on Google Ads to make it worth investing in?

Do you want to know what your industry average cost per click is?

Get in touch with me today and I’ll help you work out how much your clicks might cost, and recommend a monthly budget you may need to spend to get great results with Google Ads.

You can find my Google Ads process and Google Ads pricing on my website too.

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