What Should My Google Ads Cost in 2024?

A tight budget leaves your ads unseen, while overspending can drain your resources. The key? Understanding the factors impacting your specific ad costs. Let's break down what shapes your ideal Google Ads pricing strategy for 2024.

Table of contents

• Factors that influence Google Ads pricing
• Types of Google ads 
• Bidding strategies 
• Google's algorithm updates
• 2024 average cost-per-click (CPC)
• Strategies to get the best CPC

Factors that influence Google Ads pricing

Your industry

One of the biggest factors influencing your ad costs? Your industry. Certain sectors simply demand higher pricing due to fierce competition or bigger lead values. As you'll see in the infographic below, legal and financial services tend to be the most expensive spaces to advertise in. Big-ticket items like luxury products also require premium ad pricing.

These benchmarks provide a good baseline. But your own costs can still vary based on local competition levels and other specific factors for your business. Understanding where you fit in this landscape is key!

Current consumer trends

Stay ahead of the curve! Evolving consumer habits and how they shop impact your ad spend. If your audience flocks to new platforms or changes buying behaviors, your budget needs to adapt to maintain visibility.

Customer buying cycle

Cost is related to your target audience's purchase journey. If you're targeting customers ready to buy, you might need a smaller budget. But if you're nurturing leads through a complex sales cycle, you'll need a bigger budget to cover multiple touchpoints.

Account management

This one's simple — do you have the expertise to manage your Google Ads in-house, or are you better off leaving it to the pros? Going the DIY route on a shoestring budget may seem cost-effective upfront, but often leads to wasted ad spend down the line. Partnering with experienced professionals ensures your budget is optimized from the get-go.

Types of Google ads

Understanding Google ad formats is key to budget planning. Here's a quick guide:

• Search Ads (text-based): Appear on Google searches for relevant keywords. Highly targeted and costlier due to reaching purchase-ready audiences.
• Display Ads (visual banners): Show across websites, offering broad reach but potentially lower cost per click.
• Shopping Ads (product-focused): Entice high-intent shoppers with images and details. Costs vary by product category competition.
• Video Ads (engaging videos): Play on YouTube, with costs based on format and targeting. Great for brand awareness.
• App Ads (promote mobile apps): Drive app installs, with costs depending on app category and target audience.

The best mix for you depends on your goals and customers. Generally, competitive placements driving sales (search ads) require higher budgets compared to awareness-building formats (video ads). Remember, a strategic ad format mix is key to optimizing your budget for maximum impact.

Bidding strategies

Your bidding strategy directly impacts your Google Ads costs. Each user interaction (click, view, conversion) triggers a charge based on your set maximum bid. So, choosing the right approach is crucial.

Here's a breakdown of the two main paths:

1. Manual Bidding: You're in the driver's seat, setting max bids for each ad and keyword. This is perfect if you already know which terms are your top performers deserving of a bigger budget slice.
2. Automated Bidding: Let Google's smart algorithms do the heavy lifting, automatically adjusting bids based on the likelihood of a click or conversion. It's all about aligning your bidding with your campaign goals, whether that's maximizing clicks, targeting a certain ad position, or hitting a specific cost-per-acquisition.

Within automated bidding, you'll find subcategories like:

• Maximize Clicks: Aims for the most clicks within your budget (great for traffic, but conversions aren't guaranteed).
• Target Impression Share: Gets your ad on top page positions, but costs fluctuate based on competition.
• Target CPA: Optimizes for conversions while keeping costs below a set amount (helps stay within budget while capturing leads).
• Target ROAS: Optimizes for conversions while keeping costs below a set amount (helps stay within budget while capturing leads).
• Enhanced CPC: A blend of manual and automated bidding. You set the base bid, and Google fine-tunes it when conversions seem likely.

Google's algorithm updates

Let's not forget who dictates the rules: Google's ever-evolving algorithm. These updates can impact your ad costs in a few ways:

• Benchmarks in flux:  Google's algorithm changes can shift historical benchmarks like your cost-per-click (CPC) and cost-per-acquisition (CPA) data, which are used to set your bids. This can make cost projections less reliable.
• Policy shifts: Updates to ad approval, positioning, and measurement rules can affect your ad performance and impact your budget.
• Targeting tweaks: Major algorithm changes can overhaul how ads are targeted, displayed, and attributed. This can lead to unexpected swings in pricing if you're not keeping pace with Google's updates.

The bottom line? Staying informed about Google's latest moves is crucial to avoid unpredictable and potentially wasteful ad spend.

2024 average cost-per-click (CPC)

Understanding current industry benchmarks is critical for setting realistic ad budgets. While averages vary across businesses, the general landscape looks like this:

Use these figures as a starting point for gauging a reasonable cost range for your ads. But remember, tons of specifics factor into where your actual numbers will land!

How your CPC is calculated

Now that we've covered the baseline, let's dive into what ultimately determines your unique CPC. Three key components make up the formula:

1. Keyword selection 

Super specific keywords like "buy blue Nike running shoes" tend to cost more.  Think about it — those searchers are close to buying, so competition is high.  Broader terms like "running shoes" will be cheaper, but may not reach the most qualified leads.

2. Ad rank and quality score

Google's ad auction favors relevant and helpful ads. The higher your quality score (based on ad relevance and user experience), the lower your costs.

3. Optimization tactics

Smart audience targeting, compelling ad copy, and strategic campaign management can all significantly improve your cost efficiency over time. 

Strategies to get the best CPC

Speaking of optimization...when it comes to making your ad budget work harder, you need a few killer tactics up your sleeve. Here are some of our favorites:

Continuous optimization

The key to a low CPC is constant monitoring and adjustment. We analyze ad performance across devices, demographics, and more. If a specific audience isn't converting, we shift focus. But for those converting at high rates? We double down to maximize return.

Audience targeting

Gone are the days of scattershot advertising. Modern platforms let us target the exact customer segments most likely to convert. This means prioritizing high-value leads and ditching those unlikely to convert — even if it means a temporary bump in CPC. You'll win big in the long run with skyrocketing conversion rates.

Relevant landing pages

The perfect ad can fall flat if the landing page doesn't live up to the hype. We ensure a smooth transition by mirroring ad messaging, addressing user intent, and creating a clear path to conversion. Each hard-earned click deserves a shot at becoming a loyal customer.

Geotargeting

Sometimes, geographic targeting is the key. We pinpoint the markets that are proven goldmines for your business, ensuring our clients' budgets prioritize those areas. No more wasted spend on irrelevant locations — just laser focus on where it matters most.

Device and ad format

Not everyone interacts with ads the same way. We analyze engagement data to understand if an audience prefers mobile, desktop, or specific ad formats like video. By concentrating on these top performers, you can maximize the reach and effectiveness of your budget.

Creative refreshes

Even the most captivating ad loses its charm over time. We regularly test new creative concepts, visuals, and messaging against existing ads. Proven winners become the new standard, constantly driving down your CPC.

Your ads aren't guessing games—they're revenue engines

Enough hypotheticals about effective ad budgets. Let's transform your paid spending into a finely-tuned revenue engine tailored for your business's unique dynamics.

We go beyond basic analysis. Our experts delve deep into your data, customer journeys, competitor landscape, and overall marketing strategy. We leave no stone unturned to understand what drives sustainable growth for your brand. Because our mission is your revenue takeoff.

Ready to experience the power of Google Ads and leave the competition in the dust? You know what to do next.