A Beginner’s Guide to the Cost of AdWords

Aug 10, 2021

<a href="https://www.ewrdigital.com/author/geoffcampbell" target="_self">Geoff Campbell</a>

Geoff Campbell

Geoff Campbell is a PPC and Paid Media Manager for eCommerce, Industrial, and Enterprise brands.

Are you looking to invest in AdWords but are unsure of how much you should dish out? If so, we are here to give you an insight into the cost of AdWords. By using AdWords for your paid media company, you can create an investment for your business and tweak your campaigns at any time.

To learn more about Google AdWords cost, keep reading below.

How Does AdWords Work?

A Beginner's Guide to the Cost of AdWords | EWR Digital

Before talking about the cost of Google AdWords, we should first discuss what Google Ads are. Google Ads are run through a platform that buys and sells ads in a matter of seconds.

There is a common misunderstanding around Google AdWords that the more money spent on ads, the more influence you get. Even though having a bigger budget in the ad department never hurts, AdWords is a leveled playing field.

As we stated above, the platform that AdWords runs on buys and sells ads fast. This is also known as an auction. Since AdWords is auctioning off ads, it makes it fairer than most advertisers realize.

What Is the Ad Auction?

The auctioning of ads begins when a user enters a search into Google. After hitting enter, Google will decide if the phrase being searched contains keywords that advertisers are bidding on in real-time. If some of the keywords in the user’s search have been bid on, the ad auction will begin automatically.

The ultimate purpose of this auction is to decide where each ad will be positioned on the user’s screen; this is also known as ad rank. The ad rank formula is based on maximum bid and quality score. The top bid, or the money you bid on the keyword, is multiplied with the quality score or the metric used to see how relevant your ad is for the user.

After the ad rank and quality score have been determined, Google will then use this data. This data will be used to set a price for how much you’ll end up paying each time a user clicks on your ad. If you have a better quality score, you will pay less than those with a lower score. More metrics come into play with AdWords, but this happens within the ad auction in a nutshell.

What Is the Overall Google AdWords Cost?


The short answer to how much AdWords will cost you is that it depends. You may think that your ad spends are being fully invested into AdWords, but you’re putting your money into mini-markets within Google Ads.

This means that every keyword group that you’re bidding on comes with its own set of prices and factors to consider. This is the same situation when you bid for clicks. You will only be bidding on clicks relevant to you and your products, not every click in the world.

The ultimate answer to Google AdWords cost is that you will need to find a budget that best fits yourself and your company. This budget will depend on the cost of the keywords you bid on. It’s good to keep in mind that popular keywords will cost you more than those other marketers aren’t bidding on.

How Do I Create a Budget That’s Perfect for My Business and AdWords?

Creating a perfect AdWords budget differs from person to person. The first thing you’ll want to look at is what industry your company is in, as pricing varies from industry to industry.

Below we’ve created a table to help you get an idea of what the CPC (or cost per click) may be. The first price is the average CPC in a search network, and the second price is the CPC on a display network.

  • Advocacy – $1.43, $0.62
  • Auto – $2.46, $0.58
  • B2B – $3.33, $0.79
  • Consumer Service – $6.40, $0.81
  • Dating and Personals – $2.78, $1.49
  • E-commerce – $1.16, $0.45
  • Education – $2.40, $0.47
  • Employment Services – $2.04, $0.78
  • Finance and Insurance – $3.44, $0.86
  • Health and Medical – $2.62, $0.63
  • Home Goods – $2.94, $0.60
  • Industral Services – $2.56, $0.54
  • Legal – $6.75, $0.72
  • Real Estate – $2.37, $0.75
  • Technology – $3.80, $0.51
  • Travel and Hospitality – $1.53, $0.44

After figuring out what industry your ads will fall into, you will have a better idea of what your budget should be. If you have a higher CPC, you will end up spending more money. It would be best if you also kept in mind the additional costs AdWords has.

What Are the Additional Google AdWords Costs?

Just like almost everything in today’s world, there is more than one cost. Google Adwords cost is no exception to this.

PPC Management

Something you can invest in when using AdWords is professional PPC management. When you invest in PPC you may partner with a PPC agency.

A PPC agency will help to develop, launch, and manage your paid advertising campaigns. They can even help you across multiple platforms, including Google AdWords.

The downside to using a PPC is that they will charge you a monthly fee to manage your ads. This price can range anywhere from $300 a month to $5,000. This price doesn’t include your ad to spend money.

PPC Management Software

If partnering with a management company isn’t for you, then looking into internal management software isn’t a bad idea. Your business can streamline its internal PPC management with free software or even have the option to purchase more powerful software for a small price tag.

PPC software can help your business evaluate ads, optimize bids, check your budget, and more. Some internal PPC software can charge a monthly fee ranging from $15 a month to $800.

What’s the Minimum My Budget Should Be?

A Beginner's Guide to the Cost of AdWords | EWR Digital

The short answer is that there is no minimum amount you should spend on AdWords. When you think about it, it’s next to impossible to benefit from a budget that’s $5 or less when using AdWords. If you want to test AdWords with a smaller budget to test the waters, you may be disappointed. This is because AdWords doesn’t work this way.

When comparing AdWords to traditional forms of advertising, it’s the same as buying a small, text-based, classified ad in the local newspaper. If you receive any feedback or positive results from this tiny ad, you’ll more likely increase your ad size next publication and invest more money.

The logic behind this is that the inexpensive and small ad will have to produce positive results for you to invest more money. This logic is flawed because the more expensive an ad is in the auction space, the higher the value will be under the right circumstances, such as keywords hits.

You should invest in full force to see if AdWords works for you. Don’t aim to get great results by spending a few bucks a day. It would be best if you aimed to reach at least six clicks a day on your ads. From here, look at our table above and plan accordingly. The dollar amount you get after multiplying it by 6 is a great minimum budget, to begin with.

Do You Have Budget Recommendations That Will Make AdWords Successful?

As we have stated above, your budget will depend on variables such as your industry, the keywords you bid on, objectives, location, your ideal client, and more. With this in mind, you shouldn’t start with a budget that’s a few hundred dollars.

We recommend starting with a budget of around $1,000. If your industry has a high PPC rate, you may need to bump that budget up by a few thousand.

The better equipped you are to optimize and build up your AdWord campaigns, the more money you should put into your budget. If you’re a first-time business owner and haven’t used AdWords before, you should go for a lower budget that will still allow you to be competitive. If you have previous experience with AdWords, then you should have a higher budget.

As the money you spend on AdWords increases, you’ll get a higher click rate. Since more people will be clicking on your ads, this means you will also get more data to work with. This data will help you refine your ads and target audience so you can get the best results for the money you’re spending.

Why Should I Advertise on AdWords?

Now that we’ve discussed how much AdWords is and how to set the right budget for yourself and your company, you may be wondering why you should advertise on AdWords. Yes, we understand AdWords may cost more than you wanted to spend on marketing, but in the long run, it’s worth it.

You Can Control Your Google AdWords Cost

Google AdWords is one of the most popular advertising platforms around. One thing that makes it so popular is that you are in complete control of your budget at any time. There is no minimum investment required to get started with AdWords. Creating an account is free and running a campaign is also at no cost.

Even though we advised against it above, you can launch a campaign for a few dollars a day to get the hang of how AdWords works. If you find that you’re comfortable or not getting the results you want, you can increase (and decrease) your budget at any time.

AdWords Is Scalable

Everything that you do within GoogleAds is happening in real-time. This means that you can scale up your campaign once you’ve found and identified a successful one. You can even scale down at any time if you find that a campaign isn’t successful.

The Analytics Are Next to None

When you use Google Ads, you’ll have access to stats generated from your ad campaigns. You will be able to see things such as how many times your ad was served, how many people clicked on it, how many people left the site after clicking on your ad, and more.

You will have all this information and more available to you at your fingertips. You can run stats at any time through your dashboard and set if for specific amounts of time. This makes it easy to monitor campaigns and to see what’s working and where you may need to improve your approach.

Final Thoughts: Think of It as an Investment

Presentation Making

The fees associated with GoogleAds may be a pretty big investment for you and your business, especially if you’re a small business that’s just starting. Even though these fees may be staggering, we encourage you to look at them as an investment.

You may be concerned that the fees for GoogleAds will cut your profits. Since it’s common for advertising to be considered a business expense, this is a rational thing to think about.

In truth, advertising will not take any money away from you. Instead, it will bring in income.

By keeping a close eye on your AdWords budget, you can transform it into an investment from an expense. To do so, you should be keeping track of your AdWords account and tracking conversion, e-commerce, calls, and transactions, to name a few. If you turn it into an investment, it will be a great one for your business.

Now You Know Google AdWords Cost

We have given you a complete guide to the insight into the cost of AdWords. Even though you can spend a few dollars a day, we told you why investing more money is better.

We even touched base on the many benefits. AdWords will provide you and your business, such as a long-term investment and analytics. For more marketing tips and information, be sure to check out the rest of our website.