How to calculate the cost of Google Ads campaign

How much does it cost to advertise on Google?

The cost of Google Ads depends on many variables, the most important of which is your business area.

In this article from the KeyUpSeo blog, we examine how to calculate the cost of a Google Ads campaign and the factors affecting its costs.

Google Ads is a pay-per-click advertising platform, meaning that you pay for every click on Google Ads.

Google Ads advertising platform can be used to create brand awareness, increase website visits and traffic, increase sales, generate leads, and receive phone calls. It is also possible to create different advertising campaigns, such as ads in related Google search results, display ads on Google Ads partner websites and applications, YouTube ads, and ads to increase app installs, which calculate the cost of Google Ads in different campaigns.

What is the minimum budget to start Google Ads?

There is no minimum cost to start advertising on Google Ads. After creating a Google Ads account and charging it as much as you want, you can run your advertising campaign.

After adding your words, each word requires a different cost to display, and this should be determined by the campaign manager and adjusted for your campaign and words.

How profitable is each advertising dollar in Google?

In fact, according to Google, advertisers earn an average of $2 for every dollar they spend on Google Ads. This means that most people double their capital with the help of Google Ads. Of course, in some areas, the rate of return on investment through Google Ads is more than 800%.

Despite all the good statistics about Google Ads results, it's best to have realistic expectations. Also, pay attention to the fact that to get a good result from the advertising campaign, you must be able to manage them properly. If you create an advertising campaign without sufficient knowledge of Google Ads, there is a possibility of wasting the advertising budget without reaching the desired goal.

How is the cost of Google Ads calculated?

As we said, there is no fixed cost for advertising in Google Ads. The cost of advertising in Google Ads can be calculated per click or display and other selected items. The cost of Google Ads is determined by an auction. You choose how much you want to pay per click on Google Ads. How to calculate the cost per click in Google Ads is different according to the type of campaign.

Calculating the cost of advertising to increase the installation of the Google Ads application

App campaigns in Google Ads are suitable for people who want to increase the number of app installs. In the campaign settings section, you can choose the cost per install.

Although the advertising cost is determined by you per installation, Google calculates the application advertising cost per click; For this reason, for example, if 20 clicks were made on your application's advertisement at the beginning of the application's advertising campaign and no installation was done, the cost will be calculated for you.

According to the target cost per install that you set, Google calculates the cost per click and tries not to exceed the cost of each install that you set. If, according to the click costs, Google cannot bring the cost of each installation lower than the cost you set for each installation; Your ads will stop.

To reduce the cost of each installation in Google Ads, banners, videos, and ad titles should be attractive and related to the application topic, as well as the description and images of the application page have a great effect on increasing the conversion rate and thus reducing the installation cost.

The cost of app ads is different for different countries and different categories.

In application advertising, the category and field of activity of your application have an impact on the cost of each installation. Categories that are more general and have a wider audience have a lower installation cost than specialized applications.

Calculating the cost of display ads in Google Ads

By creating a Display campaign in Google Ads, you can display banner ads on millions of sites and applications. The cost of display ads per click is determined by you. If your targeting is broad, the cost per click will be around 1 cent.

In fact, due to the high number of ad viewers in the Google Display Network, there is no high competition for displaying ads. Therefore, in general, the cost of advertising in the display network is much lower than in the Google search network.

Of course, note that if you want to display your ads in a specific place, your ads will no longer be displayed at a low cost, because the request to display ads on famous sites is high, and due to the competition that exists, the cost of display is auctioned. To be given.

You have to pay more than $1 per click to display ads on many popular sites.

Calculating the cost of video ads in Google Ads

YouTube video ads cost per thousand impressions (CPM) or views (CPV). The minimum cost per view of YouTube video ads of Google Ads campaign starts from one cent and depending on the channels you choose to display your ads, it can be up to 10 cents or more.

The more you narrow your ad targeting, the more expensive your YouTube ads will be. For example, if you limit the language, country, and interests of users, as well as the channels in which ads can be displayed, the cost of your ads will also increase. Also, the higher quality of the advertising video can help reduce the cost of YouTube advertising.

On average, YouTube ads cost less than 3 cents per view. If your goal of YouTube advertising is only to increase the number of views of your videos, you can choose the minimum cost per view or a thousand views.

Calculate the cost of advertising in search results

The cost of Google search ads is determined by auction. The most important part of advertising in Google search results is keywords, and you determine in the Google Search campaign how much you are willing to pay to receive input for searches for each keyword.

The cost of Google search advertising varies according to the field of activity and keywords. Keywords that have a lot of competition to show ads in search results are more expensive. Also, according to the value that each customer has in different areas, click costs can be variable.

In fact, for keywords that have a high rate of return on investment, Google Ads cost per click has increased. In simpler words, in areas where each targeted click can lead to high profitability, the cost of each clique has also increased.

Are you getting higher rankings by increasing the cost per click?

You may also be wondering if businesses that pay more for each click receive more clicks and appear higher in Google search ads. The answer to this question is no.

The bid cost per click (Max CPC) is only one of the important criteria in Google Ads display.

Important parameters for displaying Google Ads campaign

Important criteria that will help you be more successful in the Google auction for displaying ads are:

The degree of communication

Google prefers to display ads where there is more connection between the text of the ad, its landing page, and the user's search term. The more the connection between the landing page and the ad text with the user's search term, the more likely that the ad will be useful to the user and meet his needs.

Click rate

The click rate or CTR is the percentage of people who click on the ad after seeing it. The higher the click-through rate, the more interesting and useful the ad is to the people who view it.

User experience from the landing page

The quality of your ad landing page has a direct relationship with your success in the Google Ads auction. Google measures user experience and satisfaction from landing pages in different ways, and the better the user experience on your landing pages, the higher your success rate in Google auctions and the display of your ads.

Google displays the result of these three mentioned criteria with a Quality Score, which is a number between 1 and 10. The higher the quality score of your keywords, the more your ads will be displayed and the less you will pay per click.

Every time the keywords of our search advertising campaign match the search terms on Google, we participate in the auction. In this auction, according to the maximum proposed cost and quality score, the advertisement display status, as well as the advertisement display rank and the click cost are determined.

If we consider the Max CPC to be 20 cents, the cost of clicking on our ads will probably be 20 cents in one of the search results and 10 cents in another search result. You should know that the cost of the click will never exceed the maximum bid unless we use Bid Adjustment.

Avg CPC displays the average cost per click, which is obtained by dividing the cost of clicks by the number of clicks.

Calculating the cost of Google Ads with the help of Google Keyword Planner

In addition to the things we explained earlier, the calculation of Google Ads cost is also done using the tool. To predict the approximate cost of each click in Google Ads, you can use the Google Cured Planner tool. To do this, enter the planning section from the Tools menu in the Google Ads account and click on the Keyword Planner option, then select the Discover new keywords option and enter your keyword.

You can see the range of cost per click to display ads at the top of the page for similar keywords.

6 factors affecting the cost of Google Ads

Various factors affect the cost of clicking on Google Ads. In the following, we examine some of the most important cases.

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Type of advertising campaign

As we have reviewed, the different types of advertising campaigns that we can add to Google Ads have different costs. For example, the cost of each click in the Search campaign is more expensive than other campaigns.

Google Ads schedule

Advertising timing can affect advertising costs.

For example, suppose you have a foreign language school and your secretary answers your office phone from 8 am to 5 pm. In such a case, it is better to limit the display of advertisements to the hours when you answer the phones. Well, as a rule, other schools will also be interested in advertising during these hours, and as a result, the amount of competition during working hours will increase. Now, if you can get the number of language training volunteers on your landing page, you can also advertise at other hours when the cost of advertising is cheaper.

Spending strategy

In addition to manual costing, where you can set the maximum cost per click, you can also use automatic or smart costing strategies. Using different spending strategies can affect the cost of your ads.

Industry and field of activity

The cost of clicking is high in some areas. Of course, in some areas, customers also have a higher value and profit margin for the advertiser.

Exchange rate

If you can increase your Google Ads conversion rate, you can pay more for Google Ads. The higher the conversion rate through Google Ads and the overall ROI in different businesses, the more the competition to display ads in the valuable keywords of that business area will increase and the cost of clicks will also increase.

Targeting different devices

The cost of advertising for different keywords is different in different devices. Usually, keywords related to B2B businesses are more expensive on desktops. Also, for B2C businesses, the cost of clicking on mobile is higher.

Focus on ad campaign performance instead of cost per click

If you get a lot of clicks for your site at a low cost, but none of the clicks convert into customers, it means that you are losing your advertising budget. So remember to stop advertising on low-performing keywords. Also, try to increase the Quality Score of your valuable keywords. Start Google Ads with a low budget and increase your advertising budget after getting good and satisfactory results.