How Much Do Google Ads Cost in 2023?

You’d be hard-pressed to find a lead generation method more effective than Google Ads. So if the only thing you’re unsure about is the cost, let’s talk.

Today, I’ll show you everything you need to know about the cost of Google Ads.

How Much Do Google Ads Cost on Average?

The cost of Google AdWords is defined by the CPC (Cost per Click) – the price you pay for each click on your ad.

So, how much are Google AdWords?

The average CPC on the search network across industries is $2-$4.

How Much Do Google AdWords Cost Based on Industry?

Average Google Ads CPC for 2023 — Source: LocalIQ and Wordstream

However, you can lower your Google AdWords CPC if you understand the two key factors influencing it.

How Much Are Google AdWords? 2 Key Factors

Google uses two factors to define the cost of your campaigns:

Your competition & industry
Your ad quality

Your Industry and Competition

Suppose you’re a locksmith in Bristol, targeting a broad keyword like “locksmiths U.K.”

Your search engine results page will be full of ads from your competitors:

Example of a highly competitive Google Ads keyword

(P.S. This isn’t something I’d recommend as an experienced Google Ads coach because it’s too broad and doesn’t allow you to target highly-qualified leads.)

Since Google AdWords work like an auction, the advertiser with the highest bid and the best ad wins.

Your cost will be higher if you want your ad in the top three spots for a keyword with fierce competition.

Some industries get higher profits from each client.

For example, legal advertisers can earn upwards of $1,000 for each customer acquisition. It makes sense for them to adjust their bidding to pay $50 or even $100 for each click.

On the other hand, restaurants don’t see high revenue from each converted lead, so the CPC is lower.

You can’t help the industry you’re in. But there is a factor you can influence:

How Ad Quality Reduces (or Increases) Your Google AdWords Costs

Google Ads want to display the best possible results based on the searchers’ search terms.

If a searcher looks up “24/7 Bristol locksmith,” they don’t want to see ads for a locksmith in Brighton.

Naturally, if Google sees two ads: one for Bristol and one for Brighton, and the search term mentions Bristol, it’ll increase the Quality Score for the Bristol ad. And then, something fantastic happens:

If your Quality Score is high, your clicks are cheap.

Increase Your Ad Relevance to Lower Your Google Ads Cost

In my 15+ years of Google Ads consulting, I’ve always recommended tailoring your ads to specific keywords. If you want to increase your Quality Score to reduce your costs, your ads must be relevant to the target keywords.

For example, if you offer service in both Bristol and London, create two separate ads targeting distinctive keywords. Then, create amazing Google Ads copy that anticipates searchers’ needs.

Example of a Google ad targeting a location

Ad relevance increases your Quality Score and influences the number of clicks (CTR or click-through rate) you get on your ads. This signals to Google that your ads correspond with the searcher’s intent.

Google takes every account in the auction and calculates the Ad Rank (Quality Score x your maximum bid). If your Ad Rank is high, your ads will be displayed at the top of the SERP.

If your ad is more relevant than your competitors’ ads, you can pay less for each click and still reach the top spot!

Impact of Quality Score on Cost Per Click image

Other Factors Affecting Google Ads Costs

Your campaign setup also influences your Google AdWords cost:

Device and geographical targeting
Ad scheduling
Bidding methods
Ad formats

For example, as a PPC consultant, I recommend the Target Cost Per Acquisition bidding method (Target CPA). Once you understand your cost for each lead that converts into a customer, you can set a figure for your ad bids.

How Much Should I Budget for Google Ads?

There’s no minimum budget for Google Ads. However, if you’re serious about Google Ads and want to get more than a handful of clicks, start with at least $50 or $100 per day.

Your Keywords Affect How Much Google AdWords Costs

If you’re targeting broad keywords, your CPC will be higher. But you can target long-tail keywords with fewer competitors and keep your budget under control even if you’re a small advertiser.

For example, if you target “business legal advice,” you’ll have tough competition. But if you target “business legal advice helpline,” the environment shifts.

Suddenly, you have fewer competitors.

What Is Your Average Acquisition Cost?

Factor in your Cost per Acquisition when calculating your Google Ads budget.

Suppose you usually spend $100 to acquire a customer who will bring in $200 in revenue. In that case, it makes sense to adjust your budget accordingly.

Add your other acquisition channels to the budget calculations.

For example, I recently had a client with a lengthy sales cycle (20+ days) and a sales team. They’d previously paid upwards of $500 to acquire a single customer. With Google Ads, we lowered their acquisition costs to $300.

How Far Do You Want to Go with Google AdWords?

Finally, are you only using Google Ads to generate leads when there’s a lull in your business?

Are you using them to expand your market share?

Your budget primarily depends on your goals.

How Much Do Google Ads Cost?

The ultimate Google Ads cost depends on your goals, competition, and ad quality. And regardless of your business size, Google Ads can drive highly-qualified leads to your business.

If you’re ready to generate extra revenue, get in touch with me. I’d love to help! With over 15 years of experience, I’ll make sure your business reaches your ideal customers at the right time and in the right place.

It’s time to grow!

Ready to take the reins? Achieve rapid Google Ads success in 7 easy steps with your copy of my best-selling Google Ads book!