How much does Google Ads cost? Budget and CPC explained

How do Google Ads costs come about?

Every time someone searches, Google holds an auction between the advertisers who want to appear for that search. It's not just your bid that counts. Google also looks at quality: does your ad match the search, and does your landing page follow on from it? So an advertiser with a good ad and a good page can rank higher and pay less per click than a competitor who bids more.

You pay per click. That's called CPC, cost per click. If your ad is shown but nobody clicks, you pay nothing. That's usually how it works for a search campaign. With some other campaign types you can also pay per impression, but for most small businesses paying per click is the norm.

Why is the cost per click so high in my industry?

The cost per click mainly depends on how many businesses bid on the same keyword, and what a customer is worth to them. A few factors push the price up:

• High customer value: in industries where one customer brings in a lot, such as legal help, insurance or installation work, advertisers bid more.
• Lots of competition: in big cities more businesses bid on the same keywords than in smaller towns.
• Broad keywords: 'plumber' is more expensive and less targeted than 'fix bathroom leak Zaandam'.
• Low quality: an ad or page that's a poor match pays more per click.

Want to know roughly what clicks cost in your market? The Keyword Planner in Google Ads gives an indication per keyword. Treat it as an estimate. You only see the real price once your campaign is running.

Also bear in mind that click prices can fluctuate through the year. An air-conditioning installer often pays more during a hot summer week, because everyone advertises at the same time. A roofer notices the same after a storm. So don't plan your budget on one good or bad week; look at the average over a few months.

Setting your Google Ads budget: a simple sum

Work backwards from what a customer brings you. You need three numbers:

• The estimated cost per click for your main keywords.
• The conversion rate: how many visitors out of a hundred make an enquiry. If you don't know yet, make a cautious estimate and adjust it later.
• How many enquiries you need for one customer, and roughly what that customer brings you.

A worked example with made-up numbers, just to show the method. Say a click costs €2 on average and four in a hundred visitors request a quote. Then one enquiry costs about €50. If one in three enquiries becomes a customer, a customer costs you about €150 in ads. If an average customer brings you €800 in margin, that's a healthy ratio. If a customer brings in €100, something has to change: a better page, sharper keywords or a different channel.

Your real numbers will be different. That's why good measurement matters so much. Read how to measure enquiries and phone calls in our article on measuring conversions.

What's a realistic minimum budget?

Google has no mandatory minimum. Still, a very small budget makes little sense. If you only get a few clicks a week, it takes months to learn which keywords work. You learn too slowly and often stop before the campaign delivers anything.

A rule of thumb: choose a budget that gets you a reasonable number of clicks every day on your main keywords, and that you can keep up for at least a few months. Too much for your whole offering? Then pick one service and one region and start there. For a broader plan for your total marketing budget, see our article on setting your online marketing budget.

Which costs come on top of your clicks?

The ad budget goes straight to Google. On top of that you often have other costs:

• Management: someone has to set up the campaign, check it weekly and adjust it. If you do it yourself, it costs time. If you outsource it, you usually pay a monthly fee.
• Landing pages: a good page per service lowers your cost per click and increases the number of enquiries. If you don't have them, they need to be made.
• Measurement: setting up conversion tracking and analytics properly takes some time once.
• Follow-up: enquiries need picking up quickly. That's time for you or your team.

How to keep Google Ads costs under control

• Start with a search campaign on a limited number of keywords with buying intent.
• Set a region where you actually work.
• Use negative keywords, such as 'free', 'vacancy' and 'DIY'.
• Send visitors to a matching landing page, not to your homepage.
• Check the search terms report every week and exclude what doesn't fit.
• Pause your ads at times when you can't follow up on enquiries.
• Don't blindly accept every Google recommendation to increase your budget.

Read more about setting up a campaign in our article on Google Ads for small businesses. Wondering whether you'd be better off investing in SEO? Then SEO or Google Ads will help.

What does Google Ads management cost at Violexa?

At Violexa, Google Ads falls under our online marketing. That starts from €599 excl. VAT (€725 incl. VAT) per month. There's no minimum term: you can cancel monthly with one month's notice. You pay the ad budget separately and directly to Google, so you always see where your money goes. If your pages need a refresh, we can build those too.

Want to know which budget makes sense for your business? Book a free quickscan. In 30 minutes we discuss your market, your goals and your website, online or on site. Afterwards you get short written advice with a price indication, with no obligation.

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