How Much Does Google AdWords Cost?

AdWords is unlike any other digital marketing channel when it comes to pricing. And when potential clients call us, the first question they ask is “how much does Google AdWords cost?” (a perfectly reasonable question!)

Since there is no set pricing schedule posted online, and Google doesn’t have salespeople doing outbound marketing to reach new customers with pricing information, it is a huge mystery!

The truth is, determining cost for Google AdWords can be a lot like dating…”it’s complicated.” 

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Understanding the basis for Google AdWords cost

Google AdWords cost is based on a pay-per-click (PPC) model. This means you only pay Google when someone takes action, clicks on your ad and visits your website. If nobody clicks on your ad, then you don’t pay! 

Google does not set a specific price for each click. Rather, the cost for each click is determined by an auction and a few other variables. But we won’t get too deep in the weeds with this for now. The important thing to know is that the cost of each click may vary, and for this reason it’s not possible to say Google AdWords will cost “exactly this much.”

Some clicks will cost more, some will cost less.

Not to worry though, you can set a maximum daily budget for your AdWords campaign that Google won’t exceed. With the help of a few tools and a little math (break out the calculator!) you can determine an appropriate Google AdWords cost for your business. Let’s go!

How to set your budget and determine cost

Even though the cost per click may vary, you can get an idea of what it will be for keywords relevant to your business. With that knowledge you can then determine an appropriate budget for your business to spend AdWords. Here’s how it works:

  • Step 1: Use the Keyword Planner to find out approximations of Google AdWords cost for keywords that make sense for your business
  • Step 2: Select a reasonable budget for AdWords that can be spent on clicks, without breaking the bank
  • Step 3: Divide the budget by the average cost per click for your keywords, and you’ll know how many new potential customers will visit your website from AdWords

Here’s a real life example for us to work with (OMG! it’s like a word problem from 6th grade math class!)

John owns a dry cleaning shop in Portland, OR. He uses the Keyword Planner to learn that the average cost per click for keywords related to “dry cleaning” in his city is $1.66. John then decides that he can spend $800 this month to reach new customers who are actively searching for a dry cleaner on Google. How many potential new customers will John reach this month? 

Equation: monthly budget / average cost per click = # of potential new customers reached

John’s figures: $800 / $1.66 = 482

And voila! John now knows he may reach approximately 482 new customers for his Google AdWords cost of $800