January 22, 2021 by Jason Pittock | 8 min reading time

Any time you search for something on Google, the first thing you’ll see is a list of paid ads.  So, clearly, people use Google Ads quite a lot (given there’s an ad for pretty much anything). Yet, is Google Ads worth it from a business perspective? Does it really bring in the cha-ching, or is it a waste of money and time on your end?

And, if Google Ads are worth it, you might also be asking yourself:“What are the benefits of Google Ads?”

OK, truth be told, Google’s ad platform is far from perfect. However, they’ve been steadily working on improving it. In this article, we’ll

give you the rundown on the history of the improvements Google has made to the Google Ads platform and the associated costs to help you answer the core question of why you’re on this page: Is Google Ads worth it in 2021?

Google Ads Over the Years 

Imagine a couple of millennials hanging out in a Stanford University dorm room brainstorming over how to develop a software system that crawled the World Wide Web and pulled up the exact types of web pages a user was looking for within seconds. 

That’s exactly what Larry Page and Sergey Brin did in 1995, and they decided to name their program Backrub (LOL). Little did they know that a few short years later an investor would be offering to buy in for $100,000 and they’d be rebranding it as a word that’s become a household name—Google. Today, Google gets over 3.5 billion searches every day

Fast forward to the year 2000. That's when Google created a way for businesses to monetize websites. Google AdWords gained popularity quickly. By 2017, almost 7 of 10 businesses were running pay-per-click (PPC) ads. Talk about a game-changer!

Here’s a timeline of other Google advertising changes:

Google Ads Timeline
  • 2002 Launches AdWords Select, a cost-per-click model.
  • 2003 AdSense provides publishers with ads that are highly relevant to the content on websites. Advertisers are charged based on the cost per 1,000 impressions. 
  • 2005 Google amends its policy so only one ad would appear per URL per search query to prevent the gamification of the system. At this point, they also allow advertisers to target specific sites they wanted to advertise on. Additionally, Quality Score is introduced as a bidding factor and connected Analytics and AdWords. 
  • 2007 Conversion-based pricing model is adopted
  • 2008 Google makes changes to include demographics and landing page load time. Text ads go mobile and Google Ad Planner, Display Ad Builder, and Keyword Planner are launched. 
  • 2009-2017  Google makes a host of changes to fine-tune targeting, converting, and call-only campaigns.
  • 2018 

If it's not obvious already, Google is continually tweaking its ad platform so that it works amazingly well for advertisers and consumers alike But how much does Google really cost?

How Much Do Google Ads Cost? 

Unfortunately, the process of trying to figure out how much Google Ads will cost you is complicated (to be delicate). They're just not very transparent about how they charge for clicks. 

Your industry, market trends, budget, keywords, Ad Rank, Quality Score, and lots of other things play a role in how much Google charges you for ads. The really great news about Google Ads is that their ad platform is highly customizable, and you have the ability to influence most of these factors. 

Google uses an auction model that gets activated anytime a user types keywords into the search engine. You can get a basic idea of how much Google Ads cost by  doing a quick calculation. 

Here's the formula to calculate Google Ad Rank: 

Google Ad Rank Formula

To drill down your ad costs a little further, Google also has a formula that you can use to calculate your actual cost-per-click. See the formula below:

cost-per-click-formula

If you're curious to know the average costs of Google Ads pricing for small businesses, we provided a list for you here: 

  • Ad spend-$9,000 to $10,000 month
  • Cost-per-click on the Google Search Network-$1 to $2 per click
  • Cost-per-click on the Google Display Network-$1 or less per click
  • Professional management for Google Ads-$350-$5,000 month or 12-30% of ad spend per month
  • Pay-per-click management tools can cost between$15 to $800 month

As with any other part of your business, it's important to keep advertising costs under control. Unfortunately, understanding how Google ads work is only half of the battle. You also need to understand issues like click fraud that can get in the way of building your business by driving your advertising costs skyward. 

Next, let's take a look at whether Google Ads is worth it in 2021, specifically.

Is Google Ads Worth It in 2021? 

Most likely, you're already thinking about your marketing strategy for 2021 (orat least you should be). Obviously, you are most likely considering SEO. Yes, that’s a valid way to help your business find its way to the top of the organic search results. 

So why then would you use Google Ads? Are they effective? Do they “beat” organic optimization?

To help answer this question, let's take a look at a couple of different scenarios. Put yourself into the shoes of a random consumer who‘s looking for a product or service online.

In this first example, let’s say you're in the market for a brand new car. Specifically, you're looking for an SUV with all-wheel drive and maybe you’re not so concerned with the make or model at this point. 

Of course, you're going to type the words SUV with an all-wheel drive into the magic search engine box. As soon as you hit enter, you're going to see Google Ad links for car dealerships that are selling all-wheel drive SUVs. And just below the paid ads, you'll see a list of organic results. 

Chances are pretty good that you'll click on one of the paid ads. Chances are also pretty good that the link will take you to a car dealership in your local area. 

In this next example, let's see how Google Ads can work to your advantage for a niche market. Imagine that you're a consumer who's looking for competitive quotes and home and auto insurance. 

What you really want is a local insurance agent, where you can make an in-person visit when you have a question or you want to make a payment. You search the words “insurance agent” and the name of your town into the search box. Local insurance agencies that have competitive rates will probably be buying ads and targeting them to the local community. Those are the ads you’ll see first and it’s a win-win for the business and the consumer because they save time on both ends.

Are Google Ads effective? You bet! And they’re fast and easy to track too. 

OK, then, so what's the catch? Why isn’t everyone just pouring money into Google Ads and becoming multi-millionaire overnight?

Well, Google Ads aren't foolproof. To be successful with them, you have to dig into your analytics and monitor your ad campaigns closely, or you could end up wasting a lot of money. 

One of the major things you need to be on the lookout for is click fraud. Bots and people could be lurking behind the scenes, repeatedly clicking on your ads and driving up your ad budget. If you're not looking for click fraud, it can take off like a runaway freight train. 

Circling back to the question in the title of this article, “Are Google Ads worth it?”, the short  answer is yes, as long as you monitor your campaigns on a regular basis and have strategies in place for detecting and preventing click fraud. 

Tips on Maximizing Your Digital Marketing ROAS in 2021 

If you’re new to setting up Google Ads, our best advice is to get your feet wet and start learning as you go. Allow us to offer these valuable tips on maximizing your digital marketing ROAS in 2021:

  • Take the time to learn how Google Ads bidding works.
  • Research the best keywords for your business to target.
  • Monitor your ads every day and make adjustments if something isn’t working.
  • Get well-acquainted with Google Analytics-you can extract a lot of valuable data from it.
  • If the pricing for keywords is increasing, it’s because your competitors are driving it up.
  • Use longtail and local keywords to reduce the cost of popular keywords. 
  • Be patient-Google Ads campaigns can take a bit of time before you’ll see good results.
  • Do your homework on how to detect and prevent click fraud which can eat through your budget quickly—the right strategies will keep it at bay.

In summary, your small business can enjoy lots of benefits with a well-crafted Google Ads campaign. Do Google Ads really work? Most of the time, yes. They can help you reach your target audience and inspire them to make a purchase. Google Ads increase ROI and it’s easy to track ROI, as well. If you find that your ads aren’t effective, you can always stop them at will until you find a better strategy.

Jason is a passionate data-driven specialist with extensive PPC & SEO experience. When not writing about SEM he can be found surfboarding the wildest ocean waves of the Argentinian coast.