We hear the question “how much does it cost to advertise on Adwords?” all the time from our clients here at ClickGuard. The question is understandable too. If you’re new to the world of online advertising, it might all seem a bit daunting. You’re probably wondering if it’s even worth the risk of a failed campaign, or if your company can actually afford it in the first place.

Unfortunately, giving a definitive answer isn’t really that straightforward. Advertising on Google is a great way to get your product out there and in front of a lot of eyes, and it’s understandably big business. This means competition, and this in turn drives prices. Think of it like an auction. Only a much more complication one.

Advertising Auction

The cost of each Google AdWords ad is determined through an auction process. First, you enter the keywords that you wish to use to prompt your advert to display. Other advertisers will have bid on some of them and this is where the auction comes about. You’re really bidding on where in the pecking order of other ads for that keyword yours will appear. You enter a maximum bid per click, and this is multiplied by your own Quality Score.

Quality scores are difficult to understand and worthy of a full thesis themselves. We’ll try and simply it as best as we can, for now. Basically, various elements of your current campaign are run through an algorithm to work out a score. Its actual system is a closely guarded secret but known positive contributors include: your click through rate, the relevance of your keywords, landing page quality, relevance of your ad text, and past AdWords campaign performances.

Google takes all this data and assigns an ad rank and a maximum cost-per-click rating for each advert using those keywords. This means that those with the most money cannot completely monopolize the advertising space available. Those who run successful smaller campaigns receive a good Quality Scores and as such enjoy good exposure for their hard work. Cultivating a good Quality Score is therefore crucial to saving money for your campaign.

As you can see, the exact price of a click will be variable and will depend on lots of different factors. These include your success at marketing your product, the information your campaign uses, the success of previous campaign, and finally your budget.

Making Your Budget Stretch

AdWords have several ways of narrowing down who gets to see your advert, and as an extension how much you end up paying. You can target specific devices, specific locations, and specific times of the day to show your advert. These filters can be crucial in eliminating unwanted traffic from your campaign.

A simple example of this would be if you were selling legal advice in New York. Obviously, you are going to want to target residents of New York, and not people in other cities. You could use the Geotargeting feature on AdWords to only show your content to those in the required city, state, or country.