Google Ads cost can seem baffling sometimes. You might be screaming in your head, “Why are Google Ads So Expensive?!” Many advertisers face similar challenges and wonder if “expensive” is the right term for what they’re experiencing.
What makes Google Ads costly often depends on your approach and the unique factors of your business. High expenses can come from several sources. Maybe you’re in a competitive field where costs are naturally high, or you’re unknowingly making strategic errors that drive up your spending.
In this article, we’ll walk you through the various elements that might inflate your ad costs. We’ll help you determine if Google Ads is truly “expensive” for you. By understanding these factors, you’ll gain clarity on managing and potentially lowering your ad spending without sacrificing results.
Why Do Google Ads Cost So Much?
Google Ads costs so much because of its dynamic cost structure. Sometimes, the expenses are high due to the industry’s nature. Then again, you might apply the wrong bidding strategies, which makes the campaigns more expensive.
If you want to find out why your costs are rising, keep reading the sections below.
High-Competition Keywords
The cost of Google Ads is often driven by high-competition keywords, especially in industries like law, finance, and insurance. When multiple advertisers target the same popular keywords, the competition for ad space intensifies. It causes the cost per click (CPC) to rise.
For instance, legal-related keywords like “personal injury lawyer” can reach up to $50 per click. It’s because law firms are willing to pay high prices for potential clients.
Industry-Specific Factors
Certain industries face higher costs in Google Ads due to the nature of their services and competitive market. Sectors like legal, finance, and insurance see significantly high CPC rates because a single client can be highly profitable.
These industries have higher stakes, where gaining a customer could bring in substantial revenue over time. As a result, advertisers in these fields are willing to pay premium prices for ads to outbid competitors.
This high level of competition pushes advertisers to bid aggressively for prime ad positions. It drives up the cost even further. So, if you’re working with a competitive niche, you have to keep a high campaign budget.
Ineffective Ads
Ineffective ads can make your Google Ads too expensive. If your ad lacks relevance or isn’t well-targeted, it can lead to low Quality Scores.
Google assigns Quality Scores based on factors like ad relevance, click-through rates (CTR), and landing page experience. A low Quality Score means you’ll pay more for each click because Google views your ad as less valuable.
For example, if you’re running an ad for “affordable laptops” but your landing page is about tablets, users will bounce. Consequently, your Quality Score will suffer. This mismatch leads to higher costs without meaningful results, as irrelevant clicks waste your budget.
Ad Budget
The budget you set in Google Ads greatly impacts how costly your campaigns feel. While it’s possible to run a successful campaign with a small budget, this isn’t guaranteed every time. A larger budget offers more flexibility to test strategies and adjust based on results.
Improper ad scheduling also wastes your budget. To demonstrate, if your ads run during unproductive times like weekends, you may have to pay for clicks that don’t convert.
Google Ads Bidding Strategies
While running ineffective ads costs you more money, it stems from mistakes in your bidding strategy. If your bid strategy isn’t aligned with your campaign goals, you might end up overspending without getting meaningful results.
Google offers various bidding options, each affecting budget differently. Manual bidding lets you set the maximum CPC for control. Automated options like Target CPA or ROAS use Google’s algorithm to optimize for conversions, often raising bids during high-competition periods. This can drive up costs, especially in competitive fields like insurance or legal.
Geographic Location
Geographic location can be another reason your ads are expensive. Ads targeting major cities like New York or Los Angeles often have higher cost-per-click (CPC) rates because more businesses compete for attention.
For example, a business advertising in Manhattan may pay more than one targeting a rural area due to the higher concentration of competing advertisers.
Additionally, targeting multiple locations across different time zones can complicate ad scheduling. If ads aren’t scheduled properly, you might waste money showing ads at times when your audience is less active.
Platform Costs
The type of platform you choose for your advertising can greatly impact costs. Google Ads, Facebook, Pinterest, and TikTok each operate differently, with distinct pricing structures and audience reach.
Google Ads generally has higher cost-per-click (CPC) rates compared to platforms like Facebook or TikTok because of its search intent. People searching on Google often have a higher intent to buy, making clicks more valuable and competitive.
On the other hand, Facebook Ads and TikTok Ads are more affordable but serve different purposes. These platforms are great for awareness and engagement but may require more ad impressions to achieve the same conversion level as Google.
For instance, you may pay less per click on Facebook, but the audience is often in the discovery phase, not the buying phase. This may require a larger budget to achieve conversions.
The bottom line is that you need to understand what’s driving your ad spending.Then you can strategize to cut costs.
How Do I Reduce the Cost of Google Ads?
The key to reducing Google Ads cost lies in optimizing your ad strategy. Follow the tips below to ensure you’re paying less for better results.
Focus on Long-Tail Keywords
Instead of bidding on highly competitive, short keywords, consider targeting long-tail keywords. Target phrases that are more specific, relevant to your campaign, and less competitive. Choose keywords that have at least 3 words or more in them.
For example, rather than bidding on “plumber,” you could bid on “emergency plumber in Chicago.” These keywords often cost less and attract more qualified leads.
You can watch the video below to learn more about targeting the right keywords for your Google Ads campaign.
Improve Your Quality Score
Google rewards advertisers with higher Quality Scores by lowering their CPC. To improve your Quality Score, ensure your ad copy is relevant to the keywords you’re targeting. You must optimize your landing pages for better conversions.
Use Negative Keywords
Negative keywords prevent your ads from showing up in irrelevant searches. For instance, if you sell high-end luxury watches, you might want to exclude terms like “cheap” or “affordable” from your campaign. This way, you avoid paying for clicks from users who aren’t likely to convert.
Optimize Your Ads Regularly
Regularly reviewing and optimizing your ad campaigns helps reduce wasteful spending. A/B testing different versions of your ads, adjusting bids, and updating keywords lists can help you continuously improve performance.
You can use Google Ads’ ad scheduling feature to turn off ads during less effective periods, This helps to optimize your spend effectively.
Set daily budget caps to ensure you don’t accidentally overspend.
Optimize Location-Specific Campaigns
You should create location-specific campaigns that are optimized for local time zones and user behavior. By targeting geographically relevant ads, you can better control your budget and increase the effectiveness of your campaigns.
Moreover, use conversion tracking to ensure you’re paying for valuable actions like form submissions or phone calls, not just clicks.
Key Takeaways
- Google Ads costs are driven by factors like keyword competition, industry, and ad effectiveness.
- Optimizing your ad strategy can significantly reduce your costs.
- Avoid common mistakes like broad targeting and ineffective bidding strategies to stretch your budget further.
Frequently Asked Questions
Is it Worth Spending Money on Google Ads?
Yes, it is worth spending money on Google Ads if used strategically. Businesses that optimize their campaigns, target the right keywords, and monitor performance can see substantial returns from their ads.
How Much Should I Spend on Google Ads Per Month?
There are no hard and fast rules on how much you should spend on Google Ads per month. Your Google Ads budget will depend on your business goals, industry, and competition. For small businesses, starting with $500-$1,000 per month can be a good range. Larger companies in competitive industries may need to spend significantly more to see results.
What's a Good CPC?
A good CPC depends on the industry and keyword. Some businesses find $1-$2 per click reasonable, while others in high-value sectors can profit with a CPC of $10 or more.
