Google Ads has helped thousands of businesses reach their target audience, increase brand awareness, and make a dent in sales. But how much does Google Ads cost? How much should you invest? Are there parameters that will impact your Google Ads budget? These are questions that every marketer needs to answer before they start their Google Ads journey.
As a Google Ads agency specializing in digital growth, we will break down everything about Google Ads cost in India.
Which factors influence Google Ads pricing?
The answer to “How much Google Ads cost” isn’t simple. The cost depends on a lot of different factors and parameters. Here are six factors you should consider.
Industry
The more competitive your industry, the higher the CPC (Cost Per Click). The cost per click is the amount an advertiser will pay every time someone clicks on the ad. Some competitive industries when it comes to CPC are finance, legal, accounting, real estate, etc.
This is because one conversion in these businesses could amount to a lot of money, justifying the higher CPC.
Market trends
Online advertising, consumer, and industry trends keep on changing. Some keywords may become more competitive, while others may see a downfall. All of this impacts your cost.
For example, during holidays, you may see a spike in ad prices in certain niches like ecommerce due to heightened advertiser interest.
Campaign strategy
Two important factors in your campaign strategy can impact Google advertising costs:
- Ad types: Which kind of ad are you targeting? Search, display, or shopping ad? For example, in most cases, search advertising is more costly than display advertising.
- Main goal: Are you focusing on maximizing clicks or increasing awareness? For example, a goal to get your brand visibility during peak hours may result in a higher CPC.
Bidding strategy
Your bid denotes the maximum amount you will pay for a click on the ad. When you bid, you enter into an auction, competing with other advertisers. Depending on your bidding strategy (manual or automated) and goal (maximizing clicks, maximizing conversions, focusing on Return on Ad Spend, etc.), your CPC will change.
Keywords
Some keywords are more competitive than others. For example, a general keyword like “dress” may not get a high CPC. But a targeted and specific keyword like “dress for prom” may start a waging war. All of this depends on your industry and what keywords competitors are targeting.
How does Google determine your cost per click?
Even though you set a bid amount, you might not always pay that maximum bid amount. Surprised? Let’s see how Google determines bid winners and what they pay per click.
Quality score
Before Google determines the cost, it gives every ad a Quality score – a number from 1-10. This score is determined by your ad’s landing page, how closely the page aligns with the user’s search intent, and the expected click-through rate. Once this is done, it moves on to Ad rank.
Ad rank
Google now calculates your Ad rank based on the quality score.
The formula is: Ad Rank = Maximum Bid X Quality Score
This determines where your ad will be placed if at all it will be. The highest ad ranks will earn top spots in the search results.
Cost-per-click
Together, ad rank and quality score determine your CPC. This does not necessarily translate to your bid amount.
Here’s the formula that Google follows:
CPC = Ad rank of the ad below yours / Quality score + $.01
This way, an advertiser can rank on the top spot paying less than another advertiser by having a good quality score. It’s how we have helped many clients with small budgets compete with big spenders.
Competitiveness
Competitiveness is driven by factors like keyword demand, industry rivalry, and seasonal trends. High-demand keywords and competitive industries tend to have inflated CPCs, as advertisers vie for top ad placements. For example, advertisers competing for prime positions often bid aggressively. This indicates you’ll have to set a higher overall budget for Google Ads.
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Google Ads cost in India in 2024
There are two major costs involved in managing your Google Ads spend: the cost of advertising (CPC) and a tax on your current ad spend (18% in India).
Let’s look at the typical costs for different ads.
Search ads cost
Search ads are shown on Google’s SERP (Search Engine Result Pages) when someone searches for a particular keyword. These ads reach people when they are looking to get information or buy something, so they are generally more expensive.
While the CPC depends on the niche, keywords, and quality of your campaigns, the average CPC and CPM are ₹20 and ₹50 respectively.
Disclaimer: The actual cost may vary depending on different factors like competition, ad quality, etc.
Display ads cost
Display ads are Google banners shown across various websites and apps when users search for specific keywords. Typically, the average CPC for these ads is ₹5-10.
Shopping ads cost
These ads appear in different positions in the SERP. They provide a visual display of products along with details like prices and user ratings. Getting people to visit your product pages through shopping ads is generally cost-effective and also gives you high ROAS.
The average CPC rate is ₹24.
Cost according to industry
While the cost of Google ads varies across industries, and there are no fixed rates, here’s a comparison of which industries usually have a higher CPC because of competitiveness in keywords.
| Industry | Average CPC ($) |
| Banking and Finance | 0.37 |
| Insurance | 0.78 |
| Legal | 0.32 |
| Education | 0.32 |
| Automotive | 0.24 |
| Logistics | 0.26 |
| Hotels | 0.24 |
| Flights | 0.10 |
| Healthcare | 0.54 |
| Dating | 0.40 |
| Jobs & Recruitment | 0.19 |
| Skincare (Ecommerce) | 0.31 |
| Jewelry (Ecommerce) | 0.43 |
| Apparel (Ecommerce) | 0.14 |
| Home appliances (Ecommerce) | 0.09 |
| Electronics (Ecommerce) | 0.57 |
Make the Most Out of Your Google Ads Budget
Setting up Google ads campaigns can be a challenging process. There are a lot of parameters to consider and things to work on. While you might have a clear idea of the cost structure now, you might want to dig deeper into your niche and get more details.
One way to ensure your money does not go down the drain when it comes to Google ads is to rely on an agency like Intent Farm, which has worked on some great campaigns for clients. Get in touch with our team to know more.
