Digital Marketing

Cpc in Google AdWords (Ads): how much does Google advertising cost

 Cpc in Google AdWords (Ads): how much does Google advertising cost

cpc adwords

The cost per click in Google AdWords is one of the important metrics that contextual advertising specialists are constantly working on. It is believed that the lower the click, the better. However, this opinion is not entirely true, because the cost of a click depends on the placement of the ad in the block and, accordingly, the volume of traffic.

Relying entirely on the cost per click would be unwise. Sometimes this indicator is not important, for example, in companies with payment for achieving a goal. Let’s look at the numbers to understand which data in the reports to pay attention to and which metrics to work with during campaign optimization.

Assigning and changing the maximum CPC in Google Ads

  • The maximum CPC is the largest amount that an advertiser is willing to pay for a potential buyer’s transition to the site. Almost always, this value differs from the actual price — the one that will be deducted from the account when you click on the ad. You need to set the maximum CPC, as it partly affects the outcome of the auction.  
  • The maximum CPC is set at the stage of creating an advertising campaign. To set the value, scroll through the RC settings to the “Bids” section and specify the cost in the field.
  • Do not specify the maximum cost per click at random. Consider the specifics of your business. It is logical to assume that the cost of switching to real estate sales sites and cheap goods from China will be different.

  • In order not to specify too low a value that will affect the outcome of the auction, use the “Keyword Planner”. It is located in the top menu in the “Tools” section.
  • In the window that opens, click on the section “View the number of requests and forecasts”.
  • Specify the queries for which you plan to display ads. Write each request from a new line.

  • Click on the “Start” button and read the data.
  • The system will show the recommended value of the maximum CPC, the approximate number of clicks and impressions, and other indicators for each query in the list.
  • It is better to contact the “Planner” before launching campaigns. If you have already accumulated statistics, use the “Betting Simulator”. Go to the “Keywords” section and configure the columns in the table.
  • In the “Attributes” section, tick the “Maximum CPC”, “Estimated bid for the first position” items, and in the “CPC Optimizer” — at the “Base maximum CPC” item. Click on the “Apply” button and read the data in the report.
  • New columns with values will be displayed in the table. The system will not show the data if the statistics for the last 7 days are not enough — in this case, a dash will be displayed in the column.
  • Remember that the betting simulator will show how the effectiveness of advertising would change if you specified other bids. It is not worth focusing entirely on the values displayed in the columns, since they do not guarantee an increase in the efficiency of the RC in the future.

What affects the cost per click

For several advertisers who are promoted on the same request, the cost of going to the site will be different. The fact is that the CPC is a dynamic indicator, which is influenced by several factors. Now we will take a practical look at that.

Competition

  • The CPC depends on competition as a key factor. The more advertisers want to promote a particular query, the higher the CPC will be. You cannot influence the competition. You will either have to pay an increased rate or select less competitive requests. The second way of saving is not always cost-effective, because unpopular requests will give less traffic.
  • It is easy to check the competition on request. It is enough to drive the keyword of interest into the search bar and look at the advertising output.
  • Ad space is also distributed below the search results. The cost per click on an ad with such a demand will be high. To check guesses, use the Keyword Planner. Select the list of queries that interest you in the same way as described above, and read the data.
  • To find out the competitiveness of the application and the approximate bids of competitors, go to the “Previous Indicators” section.
  • The system will display the level of competition for the order, the average monthly number of requests with the selected keyword, as well as the bid size – to place an ad in the first position at the top of the ad-block, and the minimum cost-per-click (CPC), which will allow you to compete with other advertisers in the auction.


Ad placement site

The more your ad is shown on the page, the more likely the user will go to your site, and not to a competitor’s site. This is why advertisers who are placed in the top block – above the search results – pay more.

For example, we can cite the already familiar query “Order pizza in paris”. To compete for a position in the top ad block, you will have to set your CPC to at least €40. Those who only need the first position in the block need to set a bid in the region of 100 -105 euros per click.

Ad quality

Ad quality also affects CPC. It is easy to improve by working on the content of promotional materials and settings. Some contextual ad specialists have been able to reduce CPC by 40-85% by improving ad quality.

What does the advertising quality index depend on?

  • Ad quality depends on the keyword’s CTR, ad relevance, and landing page quality. CTR changes as statistics accumulate. Advertisers can’t change it before RC launches – it’s all up to the users who will or won’t click on the ad. You can influence other parameters.
  • The importance of advertising is that the content of the promotional material matches the request specified in the settings. Of course, you can create a general ad for the search query “buy bakery equipment”, but the CTR is likely below. Users who see the ad will not understand exactly what you are selling. If you accurately describe the service in the advertising text and focus on the benefits of the purchase, the quality of promotional materials will increase.
  • The quality of the landing page depends on the quality of the ad. In the settings, it is better to specify a link to a page that matches keywords and contains information useful to users.

How is Google Ads deductible cost-per-click calculated?

A deductible CPC is an actual amount an advertiser pays for a user’s visit to a site. It is almost always less than the maximum price specified in the settings. If desired, it can be calculated to determine approximate advertising costs before launching the campaign.


The actual CPC is calculated using the formula:

  • Competitor Rating Advertiser Quality Index + $0.01
  • To find out the rating of a competitor, you need to multiply its width with a quality indicator. For example, if the first advertiser has a bid of $12, and the Quality Index is 7, his rating will be 84. The second advertiser had a lower bid – $10 – but a higher quality index – say 10. In this case, the rating would be 100.
  • Knowing these indicators, we calculate the actual CPC: 100/7 + 0.01 ≈ $14.2. This amount will be debited from the account when potential buyers click on the ad.
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