Brands and advertisers pay to have their ads displayed through Google, which is primarily how the search engine makes its money. Google is undoubtedly one of the most popular and most useful marketing tools on the internet right now. However, it is easy for your spend to grow out of control unless you know how it works.
Before going any further, we need to look at how the system works. You can, technically, pay as little or as much as you want. Naturally, if you have more money to put into your ppc campaign, it can help, but learning how to construct optimized campaigns is much more important. Indeed, the whole platform works on an auction system. When a Google user enters a search query, the search engine then looks at ads that are most closely related to that query based on the intention and the keywords.
Your bid is on the keyword. An ad with a lower bid could potentially be more successful than one with a lower quality score. A well-optimized ad has both factors in their favor, of course. How much of that maximum bid you end up paying depends on your quality score. Your ad rank is what determines how often your ad is shown, as well as how much you pay on your cost per click. Simply put, ad rank is determined by multiplying your max bid by your quality score.
If you have a quality score of 10, which is the highest that google offers, and a higher max bid, you will have a higher ad rank than the others, and you will have a lower cost per click or CPC.
With Google ads, you can actually end up paying less for a higher position, if you ensure that your ad is as relevant and useful to the search query as possible. The bidding system gets even more complicated when you start looking at other factors ad formats, bidding methods, and how you weigh your budget.
Setting the right bidding range and ensuring a good quality score can help you pay a lower CPC while ensuring better results. When it comes to the overall cost of the campaign, you should learn how to set a budget. Here are a few steps to do that:. This is to help you see whether your campaign is designed well for the platform, how much you need to bid to lead to successful, and can help you test out bidding strategies.
We use the term CPC, or cost per click, a lot when talking about Google Ads, but to figure out how much you should really be spending, you need to work out your earnings per click. This is how much you can expect to make from the campaign divided by the cost. A simple equation to figure out your EPC is customer value multiplied by conversion rate. The test budget is, really, the only budget that you need. Google Ads work best as a sustained effort, being adjusted based on your needs as you go on.
To learn more about dayparting and ad scheduling, check out this guide. Dayparting is especially useful for local businesses that want to attract customers to a physical location only during their operating hours. Just as you can allocate more of your Google Ads budget to certain times of day, you can also spend more of your budget on certain geographical areas. This technique is known as geotargeting. Geotargeting allows you to prioritize the display of your ads to searches coming from specific areas.
These areas can be as large as a state or province, or as small as a three-block radius from your store. For example, you may want your ads to appear alongside relevant searches in a particular state, but you could also allocate more budget to searches conducted in a specific city or even neighborhood. To learn more about geotargeting and local PPC , check out this guide. Long gone are the days when prospects searched exclusively from desktop browsers.
Today, consumers are searching online across multiple devices often at the same time , which means you need to pay attention to where your most valuable leads are coming from.
This is where device targeting comes into play. You could specify that a portion of your budget be used for desktop, but a greater portion be allocated to mobile devices. Setting a daily budget and understanding how it will be depleted are the most important aspects of budgeting for PPC, but it pays to be aware of how advanced targeting options can affect your ad spend.
But we're going to break it down. In digital marketing, pricing isn't influenced by the format of the ads, but rather the commercial intent of and competition for the keywords they are bidding on. That's on the Search Network.
However, in super-competitive markets, clicks can get much pricier. Listed below are the most expensive keyword categories in Google Ads, and the average cost-per-click of each.
You can check out the full infographic and learn about the methodology behind the data here. We then ran a second report a few years later. The results were similar, but we did see some new highly expensive keyword niches on the list, and also that average CPC's unsurprisingly had gone up. You can check out the list of the top 25 most expensive keywords here.
As Bing is growing in market share, we decided to conduct a similar study to find the most expensive keywords in Bing Ads. Listed below are the most expensive keyword categories in Bing Ads, as well as the average cost-per-click for each:. You can see the full infographic and the category breakdown here. Of course, these are just some of the hundreds of thousands of keywords that businesses all over the world are bidding on, and costs can vary widely depending on a wide range of factors.
Furthermore, it's important to take ROI into account. These industries can afford high CPC's because the average lifetime value of a customer is so high. People sometimes like to point at the grand, show-stopping keyword categories above as a definitive example of how expensive PPC can be. The reality, however, is that these keyword categories only make up a small portion of total search volumes. Long-tail keywords actually account for the majority of Web searches.
This is the kind of opportunity that long-tail keyword targeting presents to advertisers. In addition to making up the vast majority of searches, long-tail keywords are also often significantly cheaper than shorter keyword-rich queries and can have as much —if not more— commercial intent.
Unfortunately, this is another question without an easy answer. First, we need to look at overall spend data by industry. Image source. When looking into the overall spend of these and other industry verticals , we also saw that there was a degree of overlap between the average CPC of a keyword category and the total spend in that industry. You can see the full story and results of that study here.
These are big brands that bear little resemblance to small businesses with smaller budgets such as potentially yours. What's important to know is that you don't need to spend millions on Google Ads to make it work for your business.
As you might expect, the amount that our clients spend on PPC varies widely. That's still a pretty wide range, but you can at least orient yourself with respect to where you fall on the specturm. The last option is to conduct a quick audit of your existing overhead costs in the form of tools. Most marketers will have a diverse toolset that they use: keyword research tools, monitoring tools, social scheduling, and more.
There literally is a SaaS tool for everything. For example, I use dozens of tools every month that cost money: Evernote premium, Mailshake , Slack premium, Moz , and more. I can take notes for free on it. Earlier in this post, I gave you an example of how much it would cost me monthly for a sample campaign. Instead, you can target the same keywords, but limit your budget, and bid low, since your budget is limited anyway. By focusing on highly relevant ads and landing pages, you can drive sales and results even with only a few hundred dollars a month as your budget.
According to Google , doubling your return on investment is the norm for advertisers on their platform. Make sure you set up Google Ads conversion tracking from the get-go, so you can always monitor the results of all your campaigns and keywords.
You should also connect Google Ads and Analytics , so you have access to all the data. Direct sales and direct profit into your bank account should be the determining factor for success. Start small, adjust based on results, and double down if your campaigns are generating affordable and profitable sales.
Try to put all this into practice and let us know your results in the comments below. As Google wouldnt know the margin on what you sell then I suspect they are talking sales. Nowhere near enough margin for physical product. This article is sort of misleading. What you show is definitely valuable, if you are trying to understand Adwords at the most minimalist level..
Beyond this, taking practice into your own hands would show the account history and actual CPC. This is a fact. I am not assuming anything. I receive many leads from this. Play the stock market.
Adwords is a bidding game, and that bid is not based on keywords. If you fail to meet your Quota you bankrupt yourself. Good luck! Thanks for all those tips! Very useful! In our experience working with ecommerce companies, the key is avoid wasting significant Adwords expenditure. One way to do so is with efficient structure. I believe everything posted made a lot of sense. However, think about this, suppose you composed a catchier title?
In my opinion, it might bring your website a little livelier. Great Content.
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