How Much Do Google Ads Cost in 2024?

Google remains one of the most effective advertising platforms for reaching new potential customers. However, understanding what running an ad campaign will cost your business can often be confusing. 

What’s the real cost of Google Ads in 2024? Keep reading to learn everything involved to help you determine budgets and maximize ad spend.

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What Are the Average Cost of Google Ads per Industry?

The average cost per click Google Ads across all industries for the search network is US$2.69 and $0.63 for the display network.

However, basing decisions solely on the overall average can lead to setting inaccurate goals or misjudging the results or failures of your campaigns. Let’s drill down into the cost-per-click (CPC) averages per industry for the search network to see how they can vary:

• Legal: $6.75
• Consumer Services: $6.40
• Technology: $3.80
• Finance & Insurance: $3.44
• B2B: $3.33
• Home Goods: $2.94
• Dating & Personals: $2.78
• Health & Medical: $2.62
• Industrial Services: $2.56
• Auto: $2.46
• Education: $2.40
• Real Estate: $2.37
• Employment Services: $2.04
• Travel & Hospitality: $1.53
• Advocacy: $1.43
• E-Commerce: $1.16

You can see how a single click for Legal is nearly $7, while at the low end, an eCommerce business pays slightly over $1. 

This significant range results from how valuable a qualified lead will become to the business since CPC directly impacts your conversion rate. A high conversion rate for Google Ads can make high costs worth the expense. A qualified lead for a law firm can generate thousands of dollars for the business, making $7 well worth it.

However, basing your expectations on quarterly or annual reports might not be enough to stay competitive. Varos is designed to give you real-time competitor benchmarks. Below, you can see how our dashboard compares your CPC right against your peers:

Key Factors Determining Google Ads Costs

Google Ads uses an auctioning process to determine ad placement, similar to other paid ad platforms. The result: your Google Ads pricing will be unique to your business, even among your peers. 

Understanding each factor influencing how much your ads will cost is vital to maximizing overall Google Ad costs. The goal is to lower cost-per-click without harming conversion rates and customer lifetime value. 

Let’s dive into the various influences determining your expenses:

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Industry & Competition Bidding

Your industry and competitors greatly influence your costs since Google Ads is an auction-based PPC platform. Therefore, the more valuable a lead is to your peers, the more they’re willing to spend to acquire them.

The control you have over the background automated bidding war is increasing your maximum budget or experimenting with different bidding strategies. Google details several overall biddings strategies worth considering:

1. Smart Bidding: This Google Ads feature allows you to specify a goal, such as a target cost per action or maximize conversions, then the platform takes it from there to make the most of your budget.
2. Focus on CPC: A CPC focus is all about spending the least for the most amount of clicks. You can choose to either manually enter CPC bids or select the automated maximize clicks to go all in on driving traffic to your site.
3. Focus on Visibility: Brand awareness is the first step in the buyer’s journey, which means not every campaign needs to go directly for the sale. Instead, this bidding method gives you several specific options that each strive to put your ad in front of the most people possible.
4. Focus on Views or Interactions (Video Only): Video ads, most often displayed on YouTube videos, can be set to maximize these metrics that are specific to the format. It’s worth considering this option for video-heavy campaigns.

Based on this list, you can likely start to determine which method is right for you. Consider your overall business goals and pick the right bidding method to meet those goals — and don’t be afraid to try another method if the first is lackluster.

Ad Quality

Increasing your bid isn’t always the best way to drive meaningful growth. Fortunately, the other major influence gives you way more control: quality.

 One of the main reasons Google became the dominant search engine is its focus on providing relevant results, and its paid ads are no exception. Google has a built-in quality rating system, similar to other paid ad platforms, to determine if your ad will be in the best interest of the user.

Ad quality is determined by evaluating your ad's relevance to the search term. If your ad is more relevant than a competitor’s, you’ll often win the auction while still paying less.

A great example of this is localized keywords. If your ad is for ‘car washes in Mesa’ while your competitors are ‘car washes in Glendale,’ you’ll have a higher relevance score for Mesa car washes — and you won’t have to pay more to win the spot.

As an encouraging rule of thumb — the more relevant your ad, the lower your CPC.

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Additional Factors

The two above factors impact your overall costs and ROI the most, but they aren’t the only variables in the equation. Other factors that impact your total costs are:

• Geographical targeting
• Device targeting
• Ad scheduling and time of day
• Ad formats

Many of these factors are inherent to your campaigns, while you can experiment with others to minimize costs and generate more revenue. For example, you may discover running your ads in off-peak hours is more profitable, or targeting mobile over desktop does the trick. 

However, remember to give any changes enough time to produce results as you modify any of these factors and different bidding methods. A single day isn’t enough data, but two weeks or one month is an excellent rule of thumb.

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Keep Related Revenue-Driving KPIs in Focus

Google Ads is a tool to help you grow your business. Additionally, the platform is one market platform focusing on the initial step in the buyer’s journey: awareness. 

Making a Google user aware of your eCommerce site or SaaS platform is crucial to turning them into customers. But after that, the rest of your online presence takes over. 

How effective are your landing pages? Is your checkout or sign-up process frictionless? Are you able to keep customers coming back and generating lifetime value? 

You may end up spending more for the same revenue than your competitors if other areas are ineffective. Keep the following related KPIs in mind to identify any problem areas or areas for improvement:

• Conversion Rate (CVR): How many visitors that reach your site become customers? Understand the expected conversion rate for your industry and analyze anything that may be driving customers away.
• Cost-per-conversion/action (CPA): How much does every conversion cost your business? CPA considers your conversion rate and CPC to determine what you’re spending to generate a customer. Understanding how these metrics relate helps you find out if you have a negative ROI.
• CClick-through-rate(CTR): How many people see and click on your ad? The factors we discussed dictate who sees your ad, but your ad copy helps earn clicks. Make sure every word in your ad, or other media formats, is relevant and intriguing to turn Google users into customers.

Below, you can see how the Varos dashboard breaks down how much your competitors spend per conversion. Of course, CPC plays a role in these costs, but if the rest of your conversion funnel is inefficient, you may end up spending more per new customer than necessary.

So, How Much Do Google Ads Cost?

As you can see, there is no simple answer to how much your ad campaign will cost. Additionally, even an expensive campaign can still be worth it if it generates meaningful results. 

We can’t give you a specific number for your costs, but we can tell you how to strategically craft your Google Adwords campaign for the best results and a predictable expense. Keep the following in mind as you proceed:

• Understand expected revenue from each customer: Look at historical results and industry benchmarks to anticipate what a single new customer will generate for your business. You can then determine what makes sense for a CPC bid.
• Determine the campaign’s scope: We saw how Google’s bidding methods are geared towards specific goals. Before you even start to create the ad, understand the goal of the ad and the entire campaign. From there, you can craft ads and configure the campaign to move towards your goals.
• Keyword research is vital: Your ads will target specific keywords, so choosing the right keywords in the beginning is essential. Use Google’s Keyword Planner or other third-party tools to find ads with the right blend of search volume and competition. The importance of relevance is why one of the best things you can do to maximize costs is to create ads specifically for each keyword.
• Keep a close eye on conversion rates: CPC is directly related to CVR — you must continually monitor this relationship. A high CPC that drives value is likely worth the cost, and keeping your CVR in mind will help you understand if clicks result in customers.

Below, you can see how Varos provides real-time competitor benchmarking about how much others spend on Google Ads. If you’re an outlier, evaluate if irrelevant ads might be the culprit:

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Let Varos Unlock Insights to Maximize Your Google Adwords Cost

It can be a challenge to make sure you’re spending only what’s necessary since there are so many moving pieces determining your Google Ads costs. Regardless of what your final CPC looks like, you must also consider related revenue-generating metrics to understand if your costs are truly worth it.

Additionally, a strong understanding of expected Google Ads metrics for your industry will help you hone in one room for improvement. 

For example, if your cost per conversion is too high, you can examine the buyer's journey from Google Ads to becoming a customer to find out why.

Varos is a unique solution designed to help shed light on how your peers are doing with the same ad and eCommerce platforms you use. In addition, you’ll see real-time benchmarks that demonstrate how those in your specific industry are performing. 

Below, you can see how Varos gives you the overall competitor’s performance for Google Ads, broken down by KPIs and tiers:

Do you know how well your competitors are performing with Google Ads? If not, sign up with Varos or call for a demo to discover how our platform can help grow your business.

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About the Author

Yarden Shaked

Co-founder & CEO at Varos

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