How to Optimize Your Google Ads for Cost Efficiency

Google Ads is widely considered one of the most common and efficient methods of internet advertising due to which businesses can promote their products and services to a wider audience in the process of their search. But how much of a trade is each of these clicks worth? Below, we’ll provide the information you need about Google ads per click cost.

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What is CPC pricing?

CPC is an abbreviation for ‘cost per click’ and is the sum of money that advertising is set to spend per click-through. This one establishes a maximum cost per click for keywords and you only pay for the people from Google who click through to your website or for a phone call to your business. CPC bidding means that you can set the exact costs and link the ad spending with the results.

How is CPC determined?

Your CPC bid moves to the bid table where it competes with bids from other advertisers wishing to feature in the keywords. Normally the highest bid is awarded the most preferred upper ad spot. The required minimum cost per click to get your ads out to the public depends on competition from other players in the market and how relevant Google considers your ads and the associated landing pages. Moreover, more competitive keywords will cost higher amounts of money for click share.

Average CPC rates

Currently, the average CPC in Google Ads isn’t constant; it depends on the industry, certain keywords, seasons, and more. Some common averages include:

Globally, the average cost per click is $1 to $2 across the Google environment. Thus, for popular and competitive verticals such as insurance, loans, and law, average CPCs vary from $50- $100+.Keywords that are less searched in industries such as retail and hospitality vary from $1 to $5 CPC.

And that is why the average CPC depends on the niche and specific keywords mostly. There are many keywords and advertisers target clients who are interested in their products by bidding higher prices for ad positions. Overall, cheaper keywords are cheaper but also generate fewer sales.

What impacts your CPC costs?

Several variables drive up CPC pricing:

Prestige

Many advertisers compete on the market to bid on specific keywords that people search for.

Brand name keywords

This requires fighting for a valuable brand name that costs more.  

Location targeting

Advertising the business in some areas such as the US or UK is more costly

> Mobile > Device type gets a higher average CPC compared to the desktop unit.

Period of the day/year

Working and festive occasions lead to an increase in prices.  

On the other hand, using narrow specialty keywords, and often liberal location targets, along with the heavy commitment of budget at the early stages allows us to manage CPC pricing. Using virtually all of Google’s sophisticated campaign tools maximizes bids regarding conversions and costs.

How to calculate ROI on CPC

To get a higher positive return on ad spend, monitor your cost per conversion rates other than CPC often. Here’s a simple ROI formula:

((Total Revenue of Conversions * Conversion Rate) – Total Cost of Conversions) / Total Cost of Conversions

So if your ads generate say $50 per email signup after $25 CPC and $5 more processing cost per sign-up:

($50Revenue -$30 conversions) ÷ $30 cost per conversion = 67% ROI

When you learn all the ins and outs of CPC pricing in Google Ads, you get the most conversions for the least amount possible. Make it a point to monitor your account daily to make necessary bid changes and check several important ratios such as ROIs that would steer you toward creating a successful PPC campaign.