A paid marketing strategy is a must-have. Whether your goal is to increase your reach or revenue, many companies of every size and industry can benefit from incorporating Google Ads into their 2023 marketing budget. With the right content and audience targeting, Google Ads can produce an impressive ROI that complements your bottom line.
However, you may wonder: What will the Google ads cost in 2023? How much budget do I realistically need to set aside to find success?
We’re here to walk you through everything you need to know about the cost of Google Ads so you can decide how to use them in your upcoming paid media marketing strategies.
Understanding Google Ads and PPC
Google is so much more than just a search engine. Not only do they have a suite of analytic tools, but they also have an entire advertising platform for businesses. Google offers various ads that you can use to promote their products and services.
Here’s how it works:
How Google Ads Work
What makes Google Ads different from other platforms is that it’s set up with a bidding system. Advertisers must decide how much they want to pay for each click they receive for an ad. Advertisers with higher bids get better placements.
They also have various bidding types. Some of the most popular include CPM, CPE, and CPC.
How PPC Works
PPC stands for pay-per-click. With PPC, you only pay for the clicks you receive for your ads. This auction-based model can get competitive depending on your keywords, targeting, and placement. This means you may need to bid higher to compete for the spot.
This is a cost-effective way to raise awareness and get your brand noticed by web visitors actively searching for your products and services.
Different Ad Formats (Search, Display, Video, Shopping)
There are a variety of ad formats and placements you can choose from. Some of the most popular include:
| Type | Description |
|---|---|
| Search | Search ads show up at the top of the SERPs. |
| Display | Display ads are images that appear on Google’s Display Network. With this placement, you can connect with a new audience on different websites and take a more visual approach to your content. |
| Video | Google video ads appear on Google and on other partner websites. This format is perfect for video campaigns and design-driven content. |
| Shopping | These ads show up in the shopping section on Google. You can target keywords like ‘Black dress for women” or “blue jeans” to ensure your products get noticed. |
Factors Affecting the Cost of Google Ads in 2023
The cost of Google Ads can vary depending on the time of year, keywords, competition, and more. The pay-per-click (PPC) model can fluctuate, which means the overall cost of your paid advertising initiatives can vary.
Here are some of the common factors that can affect the total cost:
● Keywords and Competition
Some keywords are more competitive than others. According to Wordstream, the most competitive keywords are insurance, loans, and mortgages. Insurance comes in at a $54.91 CPC, $10 higher than the keyword loans. Since many different insurance companies are targeting this keyword, they have much higher CPCs.
● Google Ads Quality Score
Google is always looking for ways to improve the user experience for web users. That’s why they use a Google Ads Quality Score that assesses the relevance of your ads and the landing page tied to the CTA. If the content and landing page align with the keywords, it could lead to a lower CPC.
● Ad Rank
Google Ad Rank uses a formula to determine the placement of your ads. This formula considers how much you’re willing to pay for CPC and your overall quality score.
If you score lower than your competitors, they will gain a better ad placement than your brand, which can lead to more clicks and sales.
● Geographic Location
Google also has a location-based bidding structure your business can use to target a specific audience in a location. Studies suggest that 46% of Google searches are focused on finding local information. This means while this might come at a higher CPC, segmenting your content can yield better results.
However, when you target a very specific location, you may get a lower CPC. For example, the average CPC may be significantly higher to target the City of Los Angeles than it would be to target Los Feliz, a much smaller neighborhood in the city. The cost will also vary depending on your industry and keywords.
● Device Targeting
With Google Ads, you also have the option to segment based on the device. Over the years, mobile CPCs have continued to increase while desktop CPCs lose more and more clicks. In 2022, mobile devices accounted for 49% of website traffic, leading to an increase of 504% from 2009, when it was only 1%. As mobile devices become the new norm, the demand and Google Ads cost will continue to grow.
● Seasonality and Trends
The cost of Google Ads in 2023 will also vary depending on the time of the year. Black Friday, Christmas, Back-to-School, and the new year are peak seasons for paid advertising. This inevitably raises the price of CPC. During summer, the platform experiences a dip in traffic, leading to a lower CPC for most businesses.
Google Ads Bidding Strategies
There are a few different bidding models outside of cost-per-click that Google provides customers. Each bidding model has advantages and disadvantages for brands in every industry, so it’s best to test a few to see what delivers the highest Google Ads ROI.
Here are three Google Ads bidding strategies to consider beyond CPC.
1. ROAS Bidding
With ROAS bidding, advertisers can set a target Return on Ad Spend. Google will adjust to maximize ROI for your conversions and help you hit your revenue goals.
2. Maximize Clicks
You can adjust your bidding strategy for maximum clicks to increase brand awareness and get as many clicks as possible. This strategy is ideal for increasing web traffic but might not lead to conversions.
3. Cost-Per-Aquisition
With CPA targeting, Google will adjust your bids to align with your set cost per conversion. This Google Ads bidding strategy can help you get more conversions for fewer clicks.
Setting a Budget for Google Ads
The budget you set for your Google Ads is how much you’re willing to spend on your campaign each day for a month, roughly 30.4 days. Your daily budget may fluctuate depending on web traffic and conversions. Occasionally the amount spent for a particular day exceeds the daily budget, if the opportunity for conversions is high that day and the account overspends it will adjust the amount spent on upcoming days so that the average of the two still meets your budget goals. So, if you have a monthly budget of $500, your daily budget will be $16.44 for your campaign.
Tips to Optimize Google Ads Costs
To maximize the efficiency of your Google ads, you’ll want to improve them constantly. Here’s how:
Improving Quality Score
If you need a higher Google Quality Score, you must optimize your ads for relevancy. The keywords, content, and landing page should all provide the same clear message to the web visitors. You may also want to consider improving the user experience by increasing your page load speed and playing with different CTAs.
Utilizing Negative Keywords
Negative keywords are words or phrases you don’t want your Google ads to place for. When adding more negative keywords to your campaign, you can improve the relevance, improve your CTR, and save money on your total CPC cost.
Effective Ad Scheduling
With ad scheduling, you can decide what time of day or week your ads show to web visitors. For example, if you see the most conversions between 10 AM and 3 PM, you may want to adjust your ads to only show during this time frame.
Utilizing Audience Targeting
Hyper-segmenting your content can help you improve your Google Ads ROI and get your content seen by the right target audience.
A/B Testing Ad Copies and Landing Pages
If you aren’t getting results with your Google Ads budget in 2023, you may want to adjust your approach to your content and marketing. When you A/B test different landing page CTAs, visual elements, and messaging, you can improve your marketing strategy to align with your audience’s likes.
Improve Your Google Ads ROI with Kanbar Digital
If you aren’t familiar with Google ads, navigating the platform and the complexities of the bidding structure can be challenging. Our team has hands-on experience helping businesses improve their approach to paid media strategies. We’ll help you build a results-driven strategy that aligns with your bottom line and helps you reach your goals quickly and efficiently.
Contact Us Today to Learn More
FAQs about the Cost of Google Ads in 2023
What is the average cost-per-click in Google Ads for 2023?
The average cost-per-click across all industries is $1-$2. The CPC will vary depending on the placement. For example, display ads are significantly lower than search ads across all industries.
What is the average cost of Google ads in 2023?
Most businesses spend between $1,000 – $10,000 a month on Google Ads. The total cost will vary depending on industry, targeting, and average cost-per-click.
