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How Much does AdWords Cost?

Two of the most common questions I get asked regarding Adwords pay per click (ppc) advertising are “How much does it cost?” and What should my budget be?” In this post I’ll walk you through how to answer the question of cost and in my next post we’ll tackle determining an appropriate monthly budget. Of course if you’d rather have Neon Ambition answer these questions for you or want to double check to make sure you’ve done your homework right, that’s what we’re here for! We have built our business using Google AdWords and offer ppc management for most of our clients.

How is AdWords cost determined?

For those who have never managed a ppc campaign before, you are paying a certain price per time someone clicks on your ad to come to your website. That price is not determined by Google or us. It is in fact you and your competition who determine PPC advertising costs which means the cost differs for every single industry and location.  Because Google AdWords has been running since October of 2000, your competition has essentially already decided the average cost per click (cpc) for you. Each keyword will have a different price per click because your competitors have determined which of the potentially hundreds of possible keywords that describe your product or service have led to the most sales or generated the best possible leads. They measure this using Google Analytics, which when combined with Google Adwords makes PPC the most measurable form of advertising there is.

A typical PPC campaign will have hundreds of different keywords that potential customers might search for in Google, each with their own cost per click. If that sounds like a lot of keywords, you have to consider all the different ways people search for essentially the same thing. In our industry for example people looking for “Austin PPC Management” might search for it that way or by any one of the following:

• Austin Adwords Management
• Austin Pay Per Click management
• PPC help
• PPC campaign audit
• Austin online marketing company

The list could go on and on. Then consider all the different geographical locations your business services and add those cities or suburbs to the list and you can see how a few hundred keywords to describe all of your products or services isn’t that difficult to come up with. After a campaign runs long enough to generate a statistically relevant sample size (can be a few weeks up to a few months depending on what you do) you start to see which keywords are converting into sales or leads using Google Analytics conversion tracking. Once you determine the best keywords you can adjust your bid for these keywords either increasing it for well performing keywords or decreasing it for keywords which never lead to anything. This is why some keywords cost more than others and why Adwords pricing is always changing slightly.

Here is an screenshot showing the suggested bids for some ppc advertising related keywords. As you can see they vary quite a bit:
ppc suggested bids

Some keywords in Adwords will cost more simply because they relate to a more profitable product or service. While a company might offer five different services, there is often one that is their bread and butter that makes them the most profit. This is likely true of your competition’s business as well and the average cpc for this service is likely higher than for another that you might provide as an add-on service that isn’t as profitable. If you are happy to get your foot in the door with that add-on service sometimes it’s a cost effective way of acquiring a new customer.

When discussing PPC management with Neon Ambition, we’ll take a look at all the keywords for your company and help you understand the average CPC across the entire campaign. But as your competition has worked out which keywords convert the best, we want to ensure we are paying closest attention to the keywords with a higher cost per click. This is a common rookie mistake with companies new to AdWords; they want as many clicks as possible and only add the cheaper keywords to their campaign missing out on the highest quality traffic. But it is not traffic we are after, it’s sales or leads! I’d rather have 100 quality visitors searching for keywords with great commercial intent such as “Austin PPC Management Company” than 1000 people clicking on my ads for “AdWords Help” which could be people searching for the AdWords Support website.

How We Can Help

Neon Ambition’s Austin PPC consultants will walk you through the estimated cost of an AdWords campaign for your business. We set realistic expectations for the monthly spend necessary to help your company achieve its goals. We’ll also discuss the potential results and only ever recommend a campaign when a good return on your investment is the likely outcome. Most of your monthly AdWords cost is going directly into Google’s pockets so there is no reason for us to oversell its potential. But like we always remind people, Google doesn’t have a $400 Billion market cap because it doesn’t work!

Please give us a call today on 512-865-8050 to discuss if an AdWords campaign is right for your business.

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