How To Calculate Google PPC Price in 2024?

Have you ever thought about why businesses spend so much money on campaign ads?

Every business model is built to be scalable but needs enough traffic and sales to make its breakthrough. That’s why they hire an AdWords agency to meet their biggest challenges, generating traffic and leads.

Now as a business owner new to the advertising game, you must be wondering how to calculate Google sponsored Ads price. How much should I spend for a profitable return? You are not alone in the search for clarity.

Determining the Google ads prices is not so straightforward and a lot of factors play their role in determining your ad spend. However, Google Ads is a smart advertising platform that provides a level playing field for all advertisers and business owners.

So we have brought you a step-by-step breakdown of how much Google ads cost. And what components affect the pricing on the Google Ad network, so you make better choices for your business.

What factors determine Google PPC Pricing?

Google Ads cost depends on these baselines:

• Industry  
• Market Ad trends
• Quality score
• Customer Lifecycle
• Keywords Bidding
• Budget

Industry

The most prominent factor that influences Google ads Pricing is your industry aka niche. Certain industries are more competitive than others like competing against law firms, accounting, and real estate industries. They bid on the most competitive keywords in Google ads with ultimate results in higher CPC.

How does the industry affect the cost of Google ads? Every industry has its way of using its ad spend like products, services, competition, and much more. All of these factors affect their Google ad Price/ad spend.

Get a more accurate estimate of how much your industry needs to spend on the Google ad network.

Now that you understand how the industry factor plays its part in Google Ads pricing, let's talk about market trends.

Market Ad Trends

The game of marketing and ads has become so competitive due to ever-changing and fast-paced marketing trends, that it is hard for anyone to keep up. But whoever does keep an eye on trending ads, gains a massive advantage over his competitors.

Customers and online trends are constantly changing so you need to keep up with your target audience's needs and shopping trends, which means constantly improvising your keyword bidding strategy.

Cost-per-click on Google Ads platform goes up or down with the shopping trends fluctuations which makes some keywords more competitive than others. This is how marketing trends affect the average cost of Google ads.

Quality score

Google ad Quality score is based on ads' relevance and usefulness. The quality score ranges from 1 to 10 depending on your ads' landing page experience, click-through rate, and keywords.

You need to optimize your quality score as close to 10 as possible, the closer we get to 10 means that Google sees your ad page as more relevant and helpful to users and ranks your ad in higher replacements in SERPs. Head over to IP Quality Score Check to see what factors might be affecting your Quality Score.

Quality score affects your keyword bidding. The way you can save money and earn a higher ranking in SERPs is to bid low and improve the Quality score to maximize your tiny investment. This way you can save money on your Google ad prices and boost your ads visibility.

The next deciding factor in Google ads pricing is customer lifecycle.

Customer Lifecycle

The customer life cycle needs to be taken into account. Because of high ticket offerings, the sales cycle takes longer and the potential customers need to be moved through the sales cycle to make a final purchasing decision. Throughout this process, your business should be on top of their mind because you are competing at an ultimate level with several others.

When you advertise on websites, potential clients need more time before they can make a purchase and this may include multiple visits to your website, downloading information, and attending a webinar. 

Keyword Bidding

Keyword bidding can be tough to compete for. That's why it plays an important part in increasing your visibility and ultimately determining how much you will spend on your Google ads. Keywords are what make your ads appear to targeted users and relevant keywords can make you rank higher in SERPs, ultimately determining your Ads cost.

Budget

Your budget can determine the number of ads you can post and their cost. The budget is the average daily & monthly spending limit that you can spare for your ad campaign. You can set this amount to whatever you feel comfortable with and supports your advertising budget.

Avail of our paid advertising services for a better market exposure, success rate, and budget control.

Google Ad Account Management

With a smart Google Ads account manager by your side, you can take your average return on investment ROI up to 8 times which was proven in a recent study by Google. You cannot just post ads and leave them to the mercy of the ruthless algorithms of search engines and auto bidding.

You need an experienced Google ads management company that can:

• Set up Google ads account structure ready for a successful launch 
• Make data-driven decisions and performance reporting
• Update your Keyword list
• Competitor research 
• Perform regular account audits and optimizations
• Manage Ad Traffic
• Adwords budget monitoring

Take advantage of WebDigitalSphere’s Google Ads services for optimum account management.

How does Google Ads determine CPC (cost per click)?

The most interesting feature of the Google ads network is that it hosts a live auction in which winners are not chosen on bid alone but upon a lot of other factors like CPC CPM. This provides equal opportunity for every advertiser to compete for higher rankings.

Let me give you a detailed yet easy-to-digest overview of such factors:

Quality Score

The most comparative and biggest evaluating factor for the online campaign is the Quality Score which is based on the relevance and usefulness of the ad query, And Google looks to see if advertisers are bidding on keywords relevant to the query. When the auction is triggered, Googlebot goes live with all the keywords and chooses a winner based on the Quality Score through automated bidding.

It changes from 1 to 10 the higher you get to 10, the more relevant your ad is to the users and ultimately more visibility on your landing pages, improved click-through rate, ad traffic, and landing page experiences.

Once Google determines your quality score it moves on to your ad rank.

Ad rank

Following Quality Score, the most prominent factor is ad rank, which determines if and where your Ad would be placed in the sponsored search section.

Ad rank is simply the quality score multiplied by the maximum bid (the most you are willing to spend on your PPC campaign).

Winner example

The evaluating factor next to Ad rank is your cost per click (CPC).

Cost per click

Cost per click, also known as keywords pricing, means if your ad gets shown in the search results, you pay only when someone clicks on it.

Every time a user clicks on your ad and goes to your landing page, the process of conversion is up to you. Have your team do some research to find some of the best cost per click affiliate programs that can boost your ad traffic, reduce costs, and improve profitability.

How does it affect your ad spend?

The formula for calculating your average cost-per-click, AVG CPC is:

Ad rank of the second ranked ad below yours divided by your quality score plus one cent.

With this formula, you will pay less per click than your competitors and still rank higher in the search results.

This is a great way of saving your ad spend and maximizing your profit. That’s exactly how small businesses are competing with the big players.

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Maximize your investments with WebDigitalSphere’s winning expertise in Google Ads services. Let us beat your competition with a brilliant implementation of optimizing these pricing factors

Reach out to our Google Ads management company to get started on your campaign ads optimization.