Google Ads is the most direct way to show up at the top of Google when someone searches for what you sell. It is also the easiest way to spend money without a result. This article explains how the costs work, so you can decide whether it makes sense and how to avoid wasting your budget.
We have not put typical click prices here. They are not something anyone can state honestly in general, because they swing so much between industries and cities. We explain why below and show how to find estimates for your own business.
The basic idea: you pay per click
Most small business campaigns use search ads. Your ad appears when someone types a search that matches the keywords you chose. You do not pay for the ad appearing. You pay when someone clicks on it. That click might lead to a phone call, a form enquiry or nothing at all, and the cost is the same either way.
This is different from SEO, where you do not pay per visit but do pay in time or fees for the work. If you are weighing the two, our guide on whether you need SEO or Google Ads may help.
How bidding works
Each time someone searches, Google runs a very quick auction among the advertisers who want to appear. You set the most you are willing to pay for a click, called a maximum bid, or you let Google set bids automatically toward a goal like clicks or enquiries.
Winning is not only about the highest bid. Google also looks at how relevant your ad and landing page are to the search, which it describes as quality. A better match can mean you pay less for the same position. In practice, you often pay less than your maximum, because the price depends on what competitors are bidding.
Google changes how its tools work and what they are called from time to time, so treat the details above as a general outline and check Google’s current help pages.
Budgets: what you control
You set a daily or monthly budget, and Google aims not to exceed it over the month. On some days it may spend a little more and on others less, but over the month it should land near your limit.
A sensible budget starts with a simple question: what is one new customer worth to you? If a new customer brings in a few thousand dollars over time, you can afford to pay more for each enquiry than a business whose average job is small. The ceiling on what you should spend comes from your own numbers, not from a rule of thumb.
Be careful with very small budgets. If you only get a handful of clicks a month, it is hard to learn what works. You might decide to run a short, well-planned test rather than spread a tiny budget over a long time.
What drives cost per click
Cost per click is the main variable, and it moves for several reasons.
- Industry. Some services are worth a lot to the customer, so advertisers pay more to get the click. Others are cheaper.
- Location. Competition in a capital city is usually different from a regional town.
- Keywords. Broad terms and high-intent terms such as “emergency” or “near me” can cost more than long, specific ones.
- Competition. More advertisers chasing the same searches pushes prices up.
- Quality. Ads and landing pages that match what people search for tend to earn better pricing.
- Time and season. Demand changes through the week and the year for many services.
Because of all this, any single number quoted online is either an average that does not apply to you or a guess. A better approach is to look at estimates for your own situation.
How to get a realistic estimate
Google Keyword Planner is a free tool inside a Google Ads account that shows estimated search volume and suggested bid ranges for keywords you enter, narrowed to your location. Treat the figures as estimates, not promises. They can be a guide to whether a campaign is realistic for your budget.
Another useful step is to search for your own services in your area and note who is advertising. If the top of the page is crowded, assume it is competitive.
Where money gets wasted
The same mistakes show up again and again.
- Broad targeting. Ads showing for loosely related searches that never turn into customers.
- No negative keywords. Without them, you pay for clicks from people looking for jobs, free advice or something you do not offer.
- Sending clicks to the home page. A page that does not match the ad loses people quickly.
- A weak website. If the site is slow, confusing or hard to use on a phone, you are paying for visitors who leave.
- Wrong areas. Ads running outside the places you actually work.
- No tracking. If you do not count calls and forms, you cannot tell what is working.
- Set and forget. Campaigns need checking, especially in the first few months.
- Accepting auto-suggested changes without thought. Some suggestions help Google more than they help you.
Fix the website first. Spending on clicks to a poor site is like buying fuel for a car with a flat tyre.
Management fees
Many small businesses have someone else run the campaigns. Fees vary a lot between providers and the models differ.
- Flat monthly fee. Predictable, regardless of how much you spend.
- Percentage of ad spend. The fee goes up as your spend does. This is common, and it is fair as long as you know the rate.
- Setup fee plus monthly. An upfront charge for building the campaign.
Questions worth asking any provider: is the ad account in my name, can I see the spend directly in Google, is there a lock-in, and what happens to the account if I leave? You should always own the account.
How we handle it
We include Google Ads management in our SEO plans rather than charging for it separately. Management is free up to a cap on your monthly ad spend: up to $1,500 a month on the Grow plan ($250 + GST a month) and up to $5,000 a month on Dominate ($450 + GST a month). Above the cap, we charge 12% of the spend. The ad spend itself is paid by you directly to Google, not to us. Plans are month to month with 30 days’ notice and no lock-in.
That is an honest summary of the arrangement, and the details are on the Google Ads page and the pricing page. If your spend will be well above the cap, a larger agency or a specialist may suit you better, and we would rather say so than take your money.
Is it worth it?
Ads make most sense when you need enquiries soon, your services are worth enough to cover the click costs, and your website is ready to turn visitors into customers. They make less sense if your margins are tight, if you cannot answer calls quickly, or if you have not set up basics like your Google Business Profile.
You do not have to choose forever. Some businesses run ads while SEO builds, then reduce spend as organic enquiries grow. See how long SEO takes for the other side of that.
A short checklist before you start
- Know what a new customer is worth to you.
- Check Keyword Planner estimates for your area.
- Make sure your site works well on a phone and has a clear way to get in touch.
- Set up call and form tracking.
- Choose a budget you can afford to test for a few months.
- Own your ad account, whoever manages it.
If you would like help, use the get started form. We work fully remotely and we do not promise results we cannot control.