How Much Do Google Ads Run, Anyway?

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This is based on a real response to a real client, so may have a slightly odd tone compared to my usual long-winded excursions.

I wish I could give you straightforward answers. The way Google Ad Network works is, you set a budget, you set bid amounts for different keywords and ad combinations, and then when someone puts in a search, Google compares you and all other people paying for ads on those keywords. 

They assess who should be at the top, second, and third place, etc, by whose bid wins the round.

Winning isn’t as simple as spending the most and getting top placement, (especially since side placement or third place can give  excellent results) it also involves having the best, most relevant ads for a given keyword.

For example, Colorado Web Design could spend top dollars to place ads for “Car insurance quotes” but if we choose “best football cleats” as the keyword to use to show my ad (obviously this wouldn’t happen, but helps to illustrate), Google will find my ad not relevant for that keyword, so if they show my ad at all, it will be much more expensive for me to win bids and get the ad to show than for someone who has a more relevant ad.

And ad relevance has its own machine learning algorithm, so even here, it’s hard to game or understand why Google thinks something is relevant or not. What about second ad position? That’s an excellent result usually.

And the real goal is conversions, not traffic, right? The first ads many people run will generate traffic but no conversions.

It’s easy to waste money, driving “bad” traffic to the site by having your keywords too broad. If you only sell “red shoes” but you place an ad on the keyword “shoes”, you will get traffic, but many will be looking for blue or green shoes. If you pick “shoes” as your keyword, Google will send you traffic from this search: “anything but red shoes” – which will not be good.

Then the next question is, do visitors to the site take the next step and contact you? Most will not, even if they are in the right place, because most of us don’t buy something instantly, everytime we visit a page.

But obviously if we drive 1000 new people to the site with an ad, and no one contacts you, that’s not money well-spent. On the other hand, a $500 budget might land you two $20k jobs in a month. Or one $200 job in a month. The missing factor here? How much is a captured customer worth to your business?

It’s hard to know what will happen without trying, but I definitely recommend keyword research data and getting some conversion rate optimization in place on your landing page before trying. It’s possible to find out how much the average bidder spends on keywords, and even who those bidders are, but  “data-intensive” only begins to describe this process.

Make sure you are prepared to spend real time evaluating and changing your strategy – mid-stream, if necessary – and you can find the proverbial “sweet spot” over time.

Bill lives and plays in Fort Collins, Colorado. After a fulfilling career for a Fortune 50 company, Bill founded Colorado Web Design in 2012 with a passion for creative digital solutions for business. Bill likes to manage a wide variety of projects and tasks for his clients in the digital space. The creative elements of website design, application design, and marketing are enough to keep anyone busy and engaged, but wiping the slate clean over and over at the start of new projects comes with its own challenges. "I like to start with really good client communication sessions. The rest is easy if you get started in the right way." He plays tennis, bikes, and hikes and then undoes all of that with too much delicious food and TV watching.

About Colorado Web Design

We've been building websites for Colorado businesses since 2002. We are a small team of dedicated individuals who love the challenge of each new marketing project. We live and play in northern Colorado.

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