Navigating the Complexities of Google Ads Pricing

In the dynamic digital world, Google Ads are a powerful tool for businesses to reach their target audience. Companies around the globe invest trillions of dollars annually in Google Ads to boost brand awareness, drive traffic, and increase conversions through search results and the Google Display Network. But for new advertisers, a crucial question remains: how much does Google ads cost in Australia?

As an experienced digital marketing agency, BAMBRICK is here to guide you through the maze of Google Ads costs in Australia. We’ll explore the factors that can influence your ad spend and provide tips on reducing expenses while maximising results. Let’s get started and uncover the specifics of Google Ads pricing in Australia.

Understanding Google Ads Costs in Australia

Google Ads campaigns are so effective because they drive highly targeted traffic to your website, but how much do you need to spend on Google Ads to get the best results? Well, that depends. Every campaign is different, but there are several key cost considerations for advertising on the Google Ads platform.

Average Cost Per Click (CPC)

The advantage of pay-per-click (PPC) campaigns like Google Ads is that you only pay when someone actually clicks on your ad. The average cost per click (CPC) for Google paid search campaigns in Australia ranges between $2 and $4 AUD. However, the price is based on an auction system and can vary significantly depending on your industry and other factors. For instance, legal keywords cost around $10.61 per click, insurance keywords about $13.37 per click, while e-commerce keywords are approximately $1.82 per click.

Monthly Advertising Budgets

With Google Ads, you decide exactly how much you want to spend each month by selecting the keywords you’d like to target and setting a maximum daily ad budget. Small businesses may choose to invest around $1,000 per month while large corporations could easily spend $50,000 or more. How much Google Ads cost each month can also fluctuate based on your advertising requirements and marketing strategies. Some businesses will increase spending at key times to help drive more clicks or reduce their Google Ads budget during quiet periods.

Management Fees 

If you opt for professional management of your Google Ads campaign, expect to pay a monthly fee. This fee varies depending on your campaign needs and whether you choose a freelancer or a digital agency, but it is typically a percentage of your total monthly Google Ads spend. Management fees are designed to cover the costs of the ongoing work to optimise your campaign and keep your Google Ads profitable.

What Determines The Google Ads Rates For Each Campaign?

There are a range of different factors that will influence how much you need to spend to make Google Ads work for your business.

Consumer Demand

Customer demand directly impacts Google Ads costs. For businesses with strong demand, like hairdressing services, targeting relevant keywords with high search volumes can drive more clicks and conversions at a lower cost per conversion. Conversely, advertising a niche product with lower demand may require a higher budget to achieve similar results.

Keywords & Targeting

Keywords are crucial in targeting your audience. Popular keywords with strong search volumes are typically more expensive due to their competitiveness, while specific long-tail keywords tend to cost less per click. Additionally, the intent behind keywords (navigational, commercial, or informational) influences their cost, with commercial intent keywords often being more expensive.

Industry

The competitiveness of your industry affects the Google Ads price. Industries like insurance, marketing, automobile dealerships, legal services, and dental services have some of the highest CPC rates. Setting a target CPA (cost per action) and daily average budget can help manage costs effectively.

Quality Score

Google’s Quality Score, which rates the relevance and quality of your keywords and ads, influences your CPC. A high-quality score can lower your ad costs. Quality Score is determined by expected click-through rate (CTR), ad relevance, and landing page experience.

Customer Lifecycle

The customer lifecycle impacts ad costs. Products or services with a short life cycle may convert quickly, requiring fewer ad impressions. In contrast, longer life cycles need multiple touch points across various channels, increasing overall advertising costs.

Ad scheduling

Also known as dayparting, is the practice of specifying the times when you want your ads to appear to prospective customers. Although your ads still go through the ad auction process, you can instruct Google on when to display your ads.

Geotargeting

Just as you can allocate more of your Google Ads budget to specific times of the day, you can also focus more of your budget on certain geographical areas. This strategy is called geo-targeting or location targeting.

Geotargeting lets you display your ads exclusively to Google searchers in designated locations, ranging from an entire state to multiple suburbs or just a three-block radius around your location.

Device targeting

Nowadays, consumers are searching online using multiple devices at once, highlighting the importance of identifying where your most valuable leads originate. This underscores the significance of device targeting strategies. Google Ads campaigns can target computers, mobile phones and tablets, with each device coming at a different cost per click.

How Does The Google Ads Auction Work?

Google decides which ads are shown with an automated auction that happens in the background every time somebody searches for your targeted keywords or visits a site that’s part of the Google Display Network. You set the maximum amount you’re willing to pay for a click or impression based on your daily budget.

What is the google ad auction process?

  1. Matching Keywords: Each time a search is made, the Google Ads system identifies all ads with keywords matching that search intent.
  2. Eligibility Check: The system filters out any ads that aren’t eligible, such as those targeting a different country or disapproved due to policy violations.
  3. Ad Rank Google Assessment: Of the remaining ads, only those with a sufficiently high Ad Rank will be displayed. Ad Rank is determined by a combination of your bid, ad quality, Ad Rank thresholds, the context of the users search, and the expected impact of ad extensions and other formats.

Since the auction process is repeated for every Google search network, the results can vary with each auction depending on the competition at that time. That means it’s normal to see fluctuations in your ad placement and whether it appears at all.

This process ensures that relevant and high-quality ads are shown to users on their Google search network. The key point to remember is that even if your competition bids higher, you can still achieve a higher ad position at a lower cost by using highly relevant keywords and ads.

How Do You Set A Budget For Google Ads?

Let’s discuss the budgeting aspect of Google Ads costs. Advertisers often find that their monthly Google Ads budget is depleted within days, leading them to believe that Google Ads is excessively expensive. This is usually due to a misunderstanding of how Google advertising budget works. Here are the key terms to understand:

  • Budget: The total amount you’re willing to spend on Google Ads.
  • Bid: The maximum amount you’re willing to pay for a click on your ad.
  • Spend: The amount deducted from your budget when an ad enters an auction.
  • Cost: Google ads cost is the actual amount you pay for each click on your ad.

If you are using automated bidding strategies such as Target CPA or ROAS, the system will automatically bid on your behalf based on your specific preferences. Understanding these terms can help you manage your Google Ads budget more effectively.

average daily budget

When setting up a campaign in Google Ads, you will be asked to specify a daily average budget. While there is a shared budget feature, it is advisable for beginners to assign a separate budget to each ad campaign. 

The daily average budget you set does not guarantee that Google will spend that exact amount each day. Instead, it provides Google with a rough estimate of your desired daily spending limit and average over the course of a month. This means your actual daily spend could be higher or lower than the set amount on any given day, leading us to the concept of spending limits.

spending limits

Originally, Google could spend up to 20% more than your daily average budget. However, as of October 2017, Google announced that it could spend up to 100% more (double your budget) if it could result in more clicks or conversions. This means if you set a daily average budget of $50, your daily spending limit could be $100. You will never pay more than your daily spending limit in a single day and will not exceed your monthly spending limit, which is your average daily budget multiplied by 30.4. If you are not using the invoice method to pay for Google Ads, you can also set a monthly spend limit at the account level.

How to determine your average daily budget

To determine your average daily budget, divide your monthly budget for that campaign by 30.4. Deciding your monthly budget depends on several factors:

  • Your total Google Ads budget.
  • The average cost per click for the keywords you’re targeting (which can be found using Google Keyword Planner or other keyword research tools).
  • The importance of that campaign compared to others in your account.

What Should You Do If Your Google Ads Costs Are Too High?

If your ads aren’t converting then you don’t automatically need to pour more money into your Google Ads campaign. Here are some tips to maximise your clicks and conversions without spending more than you can afford.

Test Different Ad Types

Experimenting with different ad headlines, descriptions, and creatives can help identify the best-performing combinations. Use this data to maximise conversions and minimise costs. Testing also reveals the most effective phrases and imagery for your target audience, enhancing future ad campaign successes.

Bid on Less Competitive Keywords

Targeting less competitive keywords can reduce costs while still driving relevant traffic. For example, a business selling custom-tailored men’s suits could target “men’s tailored suits” instead of the highly competitive “men’s suits.” This strategy ensures more relevant ad placements and lower CPC.

Target Effectively

Google Ads determine whether your settings target specific demographics, such as age, gender, and location. Precise targeting ensures your ads reach the most relevant audience, improving ad efficiency and reducing costs.

What Is The Process For Effective Google Ads Management?

Understanding Google ads cost and the factors influencing Google Ads in Australia is essential for any business looking to leverage this powerful advertising platform. Here are our essential tips to maximise the effectiveness of your Google Ads.

Optimising Quality Score

When Google considers your ads to be “high quality,” your ad rank will improve, leading to increased clicks and conversions (leads, sales, or downloads). Enhancing your quality score is essential for reducing overall advertising costs.

To achieve this, consider the following strategies:

  • Ensure your keywords align with your audience’s intent.
  • Tailor your ad copy to reinforce your keywords.
  • Improve your Google Ads landing page to ensure relevance and engagement.
  • Optimise your keywords to promote higher click-through rates (CTR).

User experience + keywords related + expected CTR = Google ads quality score

Consistent and ongoing optimisation using these techniques will help you achieve the best results while reducing costs and budgeting effectively.

Ad Rank

Google will then calculate the ad rank for each competing ad to determine if and where your ad will be placed in the paid results section. Ad rank is calculated by multiplying your quality score by your maximum bid (the highest amount you are willing to pay per click on your ad).

Cost per click

If your ad is displayed, you only pay when someone clicks on it. However, you don’t necessarily pay your maximum bid. The Google Ads cost-per-click formula is: the ad rank of the ad below yours divided by your quality score, plus one cent.

By following these guidelines and leveraging expert insights from BAMBRICK, you can keep your Google Ads costs down, drive meaningful results, and ensure a robust return on investment. Remember, the key to success lies in continuous learning and adaptation to the ever-evolving digital landscape.

Google Advertising Costs FAQs 

Are there any hidden costs associated with google ads?

No, Google Ads does not have hidden costs. You pay for clicks, impressions, or conversions based on your chosen bidding strategy. However, additional costs may arise if you choose to hire an agency or a specialist to manage your campaigns. If you’re working with a reputable Google ads agency like BAMBRICK, these Google ads management fees will be transparently discussed and mentioned.

What types of google ad formats are available in google ads campaigns?

The ad formats available to you are determined by your campaign type (App, Display, Discovery, Local, Performance Max, Search, Smart, Shopping, and Video) and your campaign goal. Your ads can appear on various devices, including mobile, desktop, and TV.

Each ad format offers unique advantages, whether it’s the simplicity and cost-effectiveness of text ads or the engaging, colourful storytelling of video ads. You can run multiple types of ads from the same Google Ads account and, in some cases, within the same campaign.

what is the difference between CPC, CPM, and CPA?

CPC (Cost Per Click) is the amount you pay each time someone clicks on your ad. CPM (Cost Per Thousand Impressions) is the cost per thousand times your ad is shown, regardless of clicks. CPA (Cost Per Acquisition) is the cost you pay for a specific action, such as a sale or a lead.

Do I need a large google ads budget to succeed?

No, a large budget is not necessary to succeed with Google Ads. Success depends more on strategic planning, keyword selection, and continuous optimisation. Smaller budgets can still yield significant results if managed effectively.

How do I measure the ROI of my google ads spend?

Measure the ROI of your Google Ads spend by tracking key performance indicators (KPIs) such as click-through rates, conversion rates, cost per conversion, and overall return on ad spend (ROAS). Tools like Google Analytics can help you monitor these metrics and assess the effectiveness of your Google ads campaigns.

Looking For Help With Your Google Ads Campaign?

To master Google Ads and maximise your investment, consider partnering with BAMBRICK. Our team of Google Ads experts can help you develop and manage effective campaigns tailored to your business needs. Ready to take your Google Ads strategy to the next level? Focus on what you do best and let us handle your Google Ads management. Book your free strategy session with BAMBRICK today!