How much does Google Adwords cost? Pay-per-click advertising explained

Google is a leading player in the online advertising space, but how much does Google Adwords cost? UK businesses often ask this question, so we’ve put together this article to explain how pay-per-click works, how advertisers are charged and which factors affect the cost of a ‘click’.

What we will cover

How much does Google Adwords cost in the UK?

When we come across businesses online asking, ‘How much does Google Adwords cost in the UK?’, we suspect they may have never used pay-per-click (PPC) advertising before.

So this article is dedicated to providing a simple explanation of how businesses like yours pay for Google Ads and what factors they need to think about before launching their first campaign.

Let’s begin by picking apart the question, ‘How much does Google Adwords cost in the UK.’

How much does Google Adwords cost? Pay-per-click advertising explainedThe new Google Ads platform

First, a small amount of pedantry (just so you don’t get mixed up with the raft of digital services from Google) Google Adwords is now called Google Ads, although the names are often used interchangeably.

Second, Google Ads is a global platform, and the price you pay will depend on where your market is located rather than where you are based. Of course, if you are paying an agency (like Vu Online) to manage your PPC campaigns, you will need to look at their package prices because these will vary depending on what’s included.

Third, Google Ads operates on an auction model. So the question, ‘How much does Google Adwords cost in the UK’, is similar to asking, ‘How much does eBay cost?’ because it depends largely on what you’re willing to pay for an item.

How do pay-per-click auctions work?

I know we’re using the classic politician’s trick of answering the question we wanted you to ask, but trust us: Understanding the way pay-per-click (PPC) works is central to working out how much budget you need to set aside for your Google Ads campaigns.

Google Adwords keyword pricing tableThe keyword planner gives you an idea of volumes, competition & cost – useful also for SEO research

Sticking with the eBay analogy, the ‘item’ that you are bidding for in a PPC auction is ad space for a specific keyword or keyphrase. For simplicity, we will assume you are running a campaign on the Google Search network, and that you are targeting exact keywords only.

Now, whenever someone types a query (e.g. ‘designer handbags’) into Google Search, it triggers an auction. If you have selected that keyword in your campaign and you win that auction, your ad will appear at the top of Page One of Google’s Search Engine Results Pages (SERPs).

Cost-per-click and quality score

Cost-per-click (CPC) is the amount you are charged when someone clicks your ad. When you run a Google Ads campaign, Google will display a suggested bid amount for every keyword you are targeting. You can either let Google automate your bids or use the suggested bids to choose your own. Or you can mix and match, perhaps upping the bid on keywords that are really relevant to your business.

Unlike eBay though, the amount you are willing to pay for a click is not the only factor in whether your ad will display. Your ad is also given a quality score by Google which is based on the ad itself and the page it links to when clicked (which we call a landing page).

In fact, a high ad quality score will reduce the amount you need to pay for a winning bid, so an agency that can help you to create high-quality ads and landing pages will save you significant money over time.

Setting a daily budget

When setting up a Google Ads campaign, you will choose both a monthly and daily budget. Each time one of your ads is clicked, the relevant cost for that click is deducted from your budget. It is considered good practice to start off with a low daily budget and to scale up once you have monitored your performance.

Clearly, keywords with a high CPC are going to use up your budget faster. So let’s now look at what an average click will cost a UK business.

What is the average cost-per-click for UK businesses?

Research from Wordstream found that the average CPC was £1.95 for businesses using the Google Search Network and 48p for those using the Google Display Network.

But beware! There is a significant range underlying that average, with some clicks costing a few pence and others costing over £10.

And of course, if the keyword is expensive, it’s likely because it is going to convert. If you are looking to get sales, then you want people to convert once they have clicked, not bid on all the low-value keywords just to get lots of clicks.

adwords dashboard
Googles dashboard is set up around conversion rather than CPC so you can track the effectiveness of your campaigns

One of the biggest factors in determining the CPC of a keyword is industry sector, with dining and nightlife at the low end of the CPC range and law and government at the high end.

Finding out the benchmark for your industry sector will help you to set a competitive ads budget.

What else is there to know?

Well lots, it’s not just text ads, that’s the starting point. There are display, video, local search, shopping and event app ads, but our advice if you’re just starting out is to keep it simple and focus on what’s working.

Try not to get excited by the breadth of what you can do and dilute your budget. Test a considered set of keywords, and once you have a stream of customers who regularly buy from a keyword, up that spend.

Who’s keeping an eye on this?

The other thing to consider is who is going to manage the account. With the changing demand of keywords, varying costs, seasonal trends, and business priorities your ads account isn’t something you can just set and forget.

You’ll need to log in and review performance, balance bids and budgets, remove negative keywords and do the odd bit of admin. Most agencies will charge a monthly management fee that correlates to the size of the budget. More budget, more time required to balance it.

Do Google Ads actually work?

Sometimes we hear people saying “I tried Google Ads, it doesn’t work”. Before we get started on how long or when they tried it, the main thing a layman will have little understanding of are the types of keywords and the intent of them, i.e. the difference between bidding on the keyword “website” or “website design company”.

And if the language of the ads isn’t right, then the user is sent to their homepage instead of a considered landing page (that answers the users questions and guides them to the sale) there is going to be enough disconnects in the process for potential customers to jump off the sales bus.

quality landing page will help conversions reported in adwordsA landing page that captures the user’s specific need will resonate better than the mixed messaging of a homepage

Hopefully then, you can forgive us for taking that saying with a pinch of salt and proving that it’s just not as simple as “trying it”.

90% of “yes” is still “no sale” when it comes to online transactions. Therefore it’s vital that every part of the buying journey feels connected, especially online, where our personal integrity or charisma is harder to get across.

Another classic we sometimes hear is, “who clicks on the ads anyway?”, Google have been making their ads look closer and closer to organic listings for years now.

example of sponsored vs organic listing on google

It has become harder to spot the paid “sponsored” adverts from the top organic listings over time

With many of our Tribe clients using Google Ads as the backbone of driving traffic, we can vouch for the fact tens or even hundreds of thousands of people click on our ads, every single month.

How Vu Online can save you money on your PPC campaigns

Our expertise in this area will help you to run efficient Google Ads campaigns that bring you more clicks and more conversions for your chosen budget.

We can also help you target those keywords that hit the sweet spot between relevance, popularity and CPC, ensuring your ads reach large numbers of your target audience without you needing to break the bank.

But we will also likely be keen to understand your audience through market research, discover what makes you different from your competitors with digital workshops and make tweaks your website, all of which is more rounded offering than just your standard ads agency.

We realise there’s a lot to take in above, so if you still have questions, please feel free to get in touch.

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