Cost of Ads on Google: How to Manage Your Spend in Google Ads?

Paid marketing on Google Ads is a lucrative strategy with the power to connect your business, products, and services with millions of users every day. While many marketers find great success on Google Ads, there are some cases where the users don’t find that happy ending with their PPC campaigns as Google Ads cost them too much.

The problem facing these unsuccessful marketers typically boils down to budgeting. If you aren’t optimizing your strategies by thinking about key metrics like wasted spend, cost per acquisition (CPA) and time dimension, then it can be costly. You will be at high risk for driving clicks but not conversions or showing your ads to the wrong audiences.

Wasted spend is bad news, no matter what the reason.

In this discussion, we’ll explore how to optimize your google advertising budget for these three key pillars: wasted spend, CPA and time.

Part 1: Wasted Spend

Waste is always negative, especially when it comes to money. You have a limited amount of dollars in your marketing budget. Thus, wasting even a few dollars can hurt your overall success and cause you to potentially miss out on huge opportunities in the ad market.

Wasted spend is at the core of optimizing your PPC budget. You should always be striving to maximize your results, while simultaneously lowering your google advertising costs. The less money you spend for the same results, the better your budget is being utilized. In this way, your Google Ads cost will remain in control.

It’s common for advertisers to waste their budget because they don’t work towards keeping ad costs low and results high. There are a number of factors that will negatively impact your budget.

Keywords Need To Align With Campaign Goal

Every campaign you produce needs to be guided by a goal or objective. This will help keep your strategies on target, especially your selection of keywords.

There are two ways to approach this factor:

1. What types of content would attract the people you want to drive to your site? What types of keywords appear most commonly with that content?
2. What keywords is your audience using? Then, create content around those commonly searched terms.

Once you’ve acquired the basic framework of your content and keywords, your campaign goal will help you narrow the list down to a more specific selection of search terms to target.

In other words, your goal will inform your content strategy and keyword research.

A common strategy to ensure alignment between campaign goal and keyword selection is Dynamic Keyword Insertion (DKI). This tool is designed to dynamically place keywords in your ad copy based on what an individual search user has looked for. Not only does this guarantee higher ad relevance, but it means that you can create one, generic ad for multiple keywords.

For example, if you have keywords like men jeans, striped jeans, best men jeans, etc, then DKI will customize your ad content each time someone searches for one of these terms and many other keyword strains that share the same types of words.

DKI is a great way to increase clicks and make your ads appear more relevant, but it can be costly if you aren’t able to turn those clicks into conversions! You can also add keywords in your landing page dynamically to meet your audience’s intent closely and finally lead them for conversion.

Target Right Customers At Right Time

With your keywords properly aligned to the campaign goal, you’re able to create engaging ad copy that drives search users to click and visit your website. However, there is still a significant obstacle in your way: putting those messages in front of the right users and at a precise time.

If users don’t see your ads when they are actually interested in such offers, then you’re missing out on a key opportunity. Similarly, if you only place ads when users are not interested in converting, you may generate clicks but no revenue, thereby wasting your marketing budget.

So, how do you position your ads to appear in front of the right audiences and at the right time? It’s all about targeting. A targeted strategy looks at a variety of audience details to determine the best times and places to engage with these prospective customers.

Some of the key methods in a targeted marketing strategy are detailed below:

• Retargeting: Google Ads is not only about bringing in new customers, it can (and should) also be used to remarket to past site visitors. These may be previous customers or people that visited, but did not convert. These are individuals that are already familiar with your products and services, which means most of your job as a marketer is already done! They may just need a small, extra nudge to complete a conversion activity.
• Location: Google Ads offers geo-targeting that allows you to bid more to place ads in front of users from specific locations. For many companies, bidding more in the immediate area is a valuable strategy. A food delivery company, for example, only wants to attract customers within their range. If your company has a nation-wide or even global reach, location targeting is still important. If you look at your conversion data based on locations, you may find certain areas that are more valuable than others. There may be areas that are wasting your ad budget! Pausing these locations and putting more emphasis towards the places that are earning you revenue is an important strategy.
• Time of search: Similar to location, timing is another helpful targeting factor. The same delivery service doesn’t want to run ads when their business is closed. There may be times throughout the day when your ads see better performance, or even worse performance. Again, by allocating your budget away from low-performing times and towards times of the day when customers are most likely to convert, you can have a more profitable campaign.
• Device: In a world that increasingly uses a variety of different screens and devices in a single day, it’s important to know how different device types affect your conversions. If you discover that your most successful ads appear on desktop devices, then allocating more spend towards these users could be a good tactic. It can also be a sign that your ads and landing pages are not mobile-friendly, which can be another source of wasted spend.
• Content: As mentioned earlier, content and keywords need to be aligned with your goal. You need to devise a content strategy that answers the questions of your target customers. You want to anticipate their questions and provide content that answers those queries. You also want to consider tone and voice. Do you want to come across as funny and quirky, or is your persona more rooted in being professional and knowledgeable?
• SEO: PPC marketing and Google Ads are often viewed as the alternative path to the top of the search results pages. While SEO takes months and even years to build a successful strategy, Google Ads works much faster. That said, don’t neglect traditional SEO tactics! Not only are organic results often seen as more trustworthy and valuable to search users, but if you can eventually build an organic presence on targeted keyword results pages, then you also don’t need to continue spending your ad budget on these searches.

Continuously Test Ad Copy

Naturally, your ad copy is another important component of successful PPC marketing and budget optimization to keep control on your Google advertising cost. Exceptional ad copy can lower your cost-per-click amounts, which means you’ll have a lower cost of ads on Google. At the same time, poor ad copy can lead to more expensive advertising.

There’s no perfect recipe for great ad copy that will work every time. That said, there are some tips that can help you develop consistently stronger ad messages.

• The user is searching for a specific solution, so you want to develop an ad copy that presents itself as the answer to their problem. Don’t focus on what you’re selling but how your products solve these customer pain points.
• Focus on the intent behind the keywords. The way people search will tell you what they are looking for and where they are in your sales funnel. Are they still conducting research and comparing products? Or, are they on the verge of making a purchase?
• Use numbers and acceptable symbols in your ads. Numbers and other characters are easier for people to comprehend than words. It will help draw eyeballs to your ads and keep attention for longer.
• Try and create an emotional response. If ad viewers feel something when they engage with your ad content, they will be more likely to click and act.
• Speak in a tone and voice that suits the customers. If your target audience is athletic outdoor lovers, then you need to have high energy ad copy!
• You absolutely need to offer a call to action in your copy.

Choose The Right Bidding Strategy

Bids are directly connected to your costs. With the wrong bidding strategy in place, it can be easy to waste your money instead of make money. Since Google offers several uniquely different bidding strategies, having the wrong one in place for your campaigns is easier than you think.

Every bid strategy is focused on a different type of campaign goal. If you are hoping to drive clicks, there is a bidding strategy for that. If you want to focus on conversions, there is a bidding strategy designed to maximize this performance metric.

Here are common goals and the type of bidding strategy best suited for each:

1. You want customers to take action on your site: If you have conversion tracking set up and you’ve already received a few conversions manually, smart bidding will help automate the process and aim to maximize the number of conversions possible for your budget.
2. You want to generate more website traffic: With this goal, you want to maximize clicks. The cost-per-click (CPC) bidding strategy will help prevent your campaigns from paying too much for each click.
3. You want to increase brand awareness: Sometimes, you just want to get the word out. Maybe you’re a new company that needs to build a reputation or you’ve just released a new product that you want to promote. In these cases, clicks and conversions are less valuable than just getting your ad messages in front of eyeballs. If this sounds right for you, then choose the cost-per-thousand viewable impressions (VCPM) bidding strategy. This will maximize the number of people that see your ads. So bidding on branded terms or not you have to decide according to your requirement.
4. You want to increase views on video ads: Videos are great tools for brand awareness, so you can choose a similar bidding strategy as described above. For video ads, shoot for cost-per-view (CPV) or cost-per-thousand impressions (CPM).
5. You want to increase brand/product consideration through video ads: If you have a more specific goal for your video ads, opt for the cost-per-view (CPV) strategy.

Consider The Pareto Principle

The Pareto Principle is a marketing theory that states that 80% of your results will come from only 20% of your activities. In other words, you have a small minority of critical keywords, ad copy, campaigns, etc. that produce the majority of your results.

It’s common for marketers to want to focus on everything, but there is rarely enough time in the day to take care of every possible opportunity or available avenue. The best route for optimizing your campaigns and lowering the cost of ads on Google is to focus your efforts and budget towards these critical few tasks.

These are the components of your Google Ads account that will produce the strongest return on investment (ROI). By focusing your efforts on this select group of tasks, you’ll not only stretch your budget further, but you will also spend your time more wisely.

Audit Regularly

The key to controlling the cost of ads on Google is to audit your account(s) and campaigns frequently. The purpose of a PPC audit is to dig into your account and find the specific areas that need improvement. When you make auditing your Google Ads account a routine task, it becomes almost automatic to discover areas that are potentially costing you money.

If you’ve never conducted a PPC audit before, here is a few checklists of metrics and account components to check.

• Negative keywords: You should be taking full advantage of the negative keyword list. These are search terms that waste spends because they are not relevant to your company and products, so have control on Google ads cost by having control on non-converting keywords.
• Long-Tail Keywords: Also pay attention to longer keywords in your targeting. These terms can be very valuable because they have less search volume and thereby fewer competing bids. Sometimes you can find long-tail keywords with extremely high intent and almost no competition. That’s a big win!
• Quality Scores: Google grades each ad group and campaign with a Quality Score. This rating impacts your costs and ad position. You absolutely MUST pay attention to areas of your account with lower Q-score ratings.
• Clickthrough Rates: You need clicks to obtain conversions. If there are ads with particularly low CTR, you could be losing out on clicks that your competitors are gaining instead. Plus, it could be a sign that your ad copy is not resonating enough with audiences.
• Ad Copy: You should evaluate each ad’s text and look for clues that can help you maximize winning ad copy and minimize low-performance messages.
• Landing Pages: A landing page is where customers go once they’ve clicked your ad. Your landing page experience needs to be valuable and relevant to the ad message. If you are seeing lots of clicks but few conversions, then it is time to workshop your landing pages.

Have a try on PPCexpo Reporting Tool and have a full and complete audit of your campaigns and account.

Take Advantage Of Data-Driven Analysis

Your PPC campaigns create a lot of data. This can make managing your Google Ads account for a statistical nightmare. You have a lot of important metrics that are constantly changing. These minor shifts can be reflective of significant trends that can lead to valuable opportunities or potentially harmful risks.

With the right analysis tool, monitoring the changes in your PPC data will be much easier. You’ll be able to identify these important trends and patterns and make the right decisions on how to proceed.

These types of data-driven decisions are much more accurate than acting on gut-feelings. The more accurate your decision-making strategies, the better your optimization, and overall ROI. This can even help you gain an important edge in the competition.

Avoid Default Settings

Google has your best interests at heart, but not every default setting or recommendation they make is as helpful as it may seem on paper. In fact, some of their default settings can actually increase the cost of ads on Google.

Here are a few options to watch out for:

• Default Network Targeting: When starting a Search Campaign, Google will ask if you want to serve ads on both the Search Network and the Display Network. The problem here is twofold. First, text ads don’t perform very well on the Display Network. Second, the clicks you do receive won’t be as valuable. You’ll end up wasting money on bad clicks, which will burn through your budget quickly.
• Default End Date: The default choice is for every ad to run indefinitely. For some campaigns, this is fine. However, there are times when you absolutely want your campaign to have an end date, and failing to change this default will lead to waste spend. For example, if you’re having a special Christmas sale campaign, then you want these ads to stop running once the sale is over. Otherwise, people may click and discover that the sale is not available and quickly return to the search results.
• Ad Group Size: When creating ad groups, Google recommends that you include as many as 20 keywords into a single ad group. In reality, you should have much tighter ad groups that only contain a handful of terms. When your ad group sizes are too large, it is very difficult to stay on-theme and create ad messages that fit with every term in the group.

Part 2: Cost Per Acquisition (CPA)

Your cost per acquisition is how much of your marketing or ad budget is spent to acquire a single new customer or conversion. It is also sometimes referred to as cost per action. The lower your cost per acquisition, the higher your potential ROI, which makes it a very important element of the cost of ads on Google.

It is much easier to control costs than it is to acquire more customers. Thus, starting with lowering your CPA can be a great, initial strategy for optimizing your PPC budget. There are a number of steps you can take to reduce your marketing and conversion costs.

Improve Your Conversion Rate

The most obvious way to lower your CPA is to focus on converting at a higher rate. The fewer clicks you have to pay before someone converts, the lower your costs. To higher your conversion rate, you need to look at a wide range of factors. At the top of the list are your landing pages.

Landing pages are often the last step in the process. You’ve paid for the click, which means your ad copy has done its job. Now, it is up to the landing page to seal the deal and complete the conversion!

Try and make the process as easy as possible for customers. Don’t overload them with additional offers or extra materials. Instead, give them what they came for and make it easy to find any additional information they need to make their decision.

Conversion rates can also be improved through the use of retargeting campaigns. As you learned in the previous part of this discussion, retargeting is focused on bringing past visitors back to your account. These individuals are more likely to convert, which means there is a good chance you’ll have higher conversion rates with these campaigns.

Detect On-Site Conversion Issues

As you’re improving your conversion rates, try and detect any on-site obstacles that are getting in the way of your conversions. While this can again be a problem with your landing pages, it can also be a result of a clunky checkout process, slow page load times, poor mobile optimization or other issues.

Start by A/B split testing different landing pages to see if there are any ways to improve the experience to drive more conversions. Also, pay attention to what links people click from your landing pages. This can help you better understand what sort of content and questions they need answered before converting.

You should also look at cart abandonment rates and checkout data to see if there are any points where a lot of customers quit the transaction. There may be something you can do to remove the friction in this key step.

Also, measure page load speeds and check that everything loads smoothly. This is an especially important step if you have a lot of mobile customers. Users on smartphones and other mobile devices will not wait for slow page loads! Speeding up load times can be a simple matter of removing complex elements on the page.

Use Smart Bidding

There are smart bidding options that directly relate to CPA. The Target CPA bidding strategy gives the marketer the option to enter a target CPA amount. This value is the maximum that Google will spend on acquiring a conversion. It’s a great bidding strategy if you are on a tight budget and need to be very careful with your spending.

There are also target ROAS (return on ad spend) and other bidding options to take a look at. With automated bidding, you can save time and man hours, which is another way to save on costs that Google doesn’t account for. By investing in marketing automation tools and features, like smart bidding, you can get more done with less staff. You can learn more about should you use smart bidding in Google Ads?

Enhance User Value

You want to align your products and services to be the best possible solution to the needs of target consumers. This is how you stand out from the competition! Sometimes, the best change that you can make to your PPC campaigns is not a matter of targeting, bidding, or otherwise, but simply offering more value to customers.

Value can be created in many different ways. It could be an added feature or quality in your products that competitors don’t offer. It can also be something as simple as a return policy or loyalty program. The more proposed value that a customer sees from making a purchase with your company, the better the offer appears.

To find out what sort of value customers are looking for, pay attention to review data and social media comments. People have no problem letting companies know what they’ve done right and wrong. If you can find some common problems and position your products as the answer, it can be a tremendous boost to your conversions.

Play Around With Bids

You may be overpaying for keyword clicks without realizing it! A good strategy is to run an experiment on lowering your keyword bids and seeing how it affects your ad ranks, CTR, and conversion rates. If you don’t see much of a change, then this is a phenomenal way to lower your cost per acquisition. And, if there is a dip in performance, you can simply increase bids back to their normal levels.

This can also be a good way to find keywords that are actually not leading to conversions. Instead, they are wasting your ad budget by generating clicks from prospects that aren’t interested in taking action.

Improve Quality Scores

In the past section, we touched on Quality Scores as an important stop during a PPC audit. The importance of these ratings that Google assigns to your keywords, ad groups, and campaigns cannot be overstated.

The reason why Google grades ads by relevance, quality, and other factors are because they want to put the best possible messages in front of their search users. For this reason, Google actually lowers CPC amounts for ads with very high-quality ratings. If you work towards improving your Google Quality Scores, then you are also working towards lowering your costs!

Here are a few tips to think about when improving Quality Scores:

• Understand what factors Google uses for measuring Quality Score.
• Reduce landing page load times, especially the ones connected to mobile ads.
• Target smaller ad groups with proper keywords to increase relevance.
• Optimize ad copy based on targeted keywords.
• Pause low performing parts of your Google Ads account.

Part 3: Time

Time is an important element in anything your business does. After all, time is money! Optimizing your campaigns and your PPC budget takes time and effort. You have to analyze several different areas of your campaigns to determine where your budget is being spent wisely and where it is being wasted.

If your Google Ads account is small, then managing these various elements is not that challenging or time-consuming. However, as your account grows and you begin scaling your efforts to include more and more keywords, manually managing campaigns becomes almost impossible to do efficiently.

For example, if you have 10 different campaigns and each campaign has 1,000+ keywords, then suddenly you have a massive Google Ads account to manage. All of these keywords are changing all the time and staying ahead of these shifts is important for developing stronger campaigns and better performance.

If you have a large Google Ads account, then you need a tool like PPC Signal.

What Is PPC Signal?

PPC Signal is an extremely helpful campaign management tool that monitors changes in Google advertising data and automatically alerts the account owner of noteworthy trends, patterns, shifts, outliers and other events happening in their campaigns.

It is powered by sophisticated machine learning algorithms that measure not only the current performance of campaigns but also their historical performance to find interesting correlations in your data. Because PPC Signal only analyzes your own Google Ads account data, all of the insights that it finds are uniquely relevant to your campaigns.

You can also filter the alerts that PPC Signal provides based on the areas of your campaign that you want to focus on. For instance, you can filter your alerts based on risks and opportunities affecting your conversion rates. This makes it easy to find the factors affecting your budget and ROI!

Making Daily Improvements

PPC marketing is not a once-in-awhile task, but rather a continuous process that requires constant attention. Your PPC metrics are always changing, which means you need a 24/7 lookout to catch the noteworthy shifts. That’s the core purpose behind PPC Signal.

By automating the detection of potential opportunities and risks, marketers can focus all of their attention towards making positive changes. You no longer have to spend hours of your time manually digging through data for possible areas of interest.

When you can commit all of your time and energy towards making improvements, you can make it a daily part of your routine. Improving just 1% each day can grow into an amazing boost in ROI by the end of the year, as much as 365%.

FAQs:

How much do google ads cost?

The average cost per click in Google Ads is between $1 and $2 on the Search Network. The average CPC on the Display Network is under $1. Depending on the business domain, the cost of keyword may go beyond 50$ as well

How much do Google Ads cost 2022?

In 2022, the average Google advertising cost per click is expected to remain between  $1 to $2 on the Google Search network.  Some niches have lower cost and some have higher cost.

Is paying for Google Ads worth it?

Of course it worth. Google Ads are worth it because they provide a profitable way for businesses of all sizes to reach a virtually unlimited, targeted audience. They’re extremely supple and you can start, stop, pause, or even adjust your bids at any time.

Can I stop Google Ads at any time?

Yes, you can cancel your Google Ads account at any time. Once you cancel, it will automatically stop all your ads within 24 hours.

Why are Google ads so expensive?

One reason your Google advertising have gotten so expensive is because of wrong timing or you are not optimizing campaigns properly.  You can have complete audit of your campaigns to check where issues are coming and where you can bring improvements.

How much does Google advertising cost per day?

Tip: Start small. If you’re a beginner, try an average daily budget of US$12 to US$50. Check your reports daily after applying a new budget to see how your campaigns have performed. For same clients, you can set a shared budget with the amount you’re willing to spend across multiple campaigns.

Wrap Up

When it comes to keeping the cost of ads on Google at a minimum, it’s all about optimizing your budget. With this three-step approach to lowering the cost of ads on Google, you’ll maximize your performance for your budget.

Start by removing any areas where your ad spend is being wasted (keywords, device types, locations, etc). Next, work towards lowering your cost per acquisition by improving Quality Scores, adjusting keyword bids, and increasing conversion rates.

Finally, invest in automation tools like PPC Signal that can help you commit your time to improve accounts, instead of monitoring changes in metrics.