Google Ads costs $100-$10,000 per month. Businesses in the United States pay between $1.99 and $4.01 per click, while businesses in Canada, pay an average of $1.66 per click in 2024. The cost for Google Ads varies based on a number of factors, including your industry, whether you’re running ads on Google Search or the Google Display Network, market trends, and more.
This guide will help you understand why Google Ads costs what it does, whether or not Google Ads is worth it, and how you can adjust your budget and bid to optimize your ad spend. Let’s dive in!
Is Google Ads Worth It?
Absolutely! A well-run Google Ads campaign can yield an incredible ROI. Google estimates that the ROI of the average Google Ads campaign is 100%—that is, you make $2 for every $1 you spend. Other estimates are far less conservative than Google’s; by optimizing your Google Ads with an agency, you may see 200%-400% returns.
ROI is tricky because your ROI will depend on other factors—Google Ads is just one part of your overall costs. Fortunately, Google Ads tends to cost substantially less for low-profit-margin businesses and more for higher-profit-margin businesses, so the average ROI tends to be similar in the end.
So, in short, yes—with a professionally managed Google Ads campaign, you can expect to see profits that far exceed your Google Ads costs.
How Does Google Ads Actually Work?
That’s a complicated question; we’ll give you a simple answer now, and as you keep reading, you’ll get more in-depth explanations of what we cover here.
Every time an ad is going to be displayed, Google runs an automated auction. Your ad campaign competes with competitors to determine whose ads actually get displayed to users. Google calculates the winner of this auction by multiplying the advertiser’s maximum bid (the most they’re willing to pay-per-click) with their Quality Score (a score Google uses to determine the relevance and quality of the ad).
When your ad performs well enough in this auction, it gets displayed, and then when your ad is clicked on, you automatically pay Google a fee. This is called a pay-per-click (PPC) model.
You can set maximum bids and a budget for your Google Ads campaign, giving you a lot of control over how much you spend. There are all kinds of analytics and optimizations available to help you maximize your campaign.
What Are The Key Factors That Impact The Price Of Google Ads
To get a deeper understanding of how much a successful Google Ads campaign will cost, it’s important to understand the five key factors that can influence the overall cost-per-click (CPC) of your campaign:
Industry
Your industry is an important factor in Google Ads pricing. Working in an industry with little competition? Your ads will cost less. Trying to advertise your law firm or real estate agency? There’s steep competition—and the price of a successful campaign will reflect that.
Businesses compete to have their Google Ads rank highly enough to be displayed. When more people are searching for a particular keyword, there’s more competition, and that means you’ll need to pay more to outbid your competition.
There’s no need to guess how much Google Ads costs on average in your industry; we’ve got you covered. Here are the average CPC rates for Google Ads across a number of industries in the United States and Canada:
Average Google Ads Search Advertising CPC In The United States, By Industry
| Industry | Cost |
|---|---|
| Attorneys & Legal Services | 8.94 |
| Home & Home Improvement | 6.96 |
| Dentists & Dental Services | 6.82 |
| Business Services | 5.37 |
| Industrial & Commercial | 4.95 |
| Personal Services | 4.95 |
| Physicians & Surgeons | 4.76 |
| Health & Fitness | 4.71 |
| Career & Employment | 4.53 |
| Education & Instruction | 4.39 |
| Animals & Pets | 3.9 |
| Beauty & Personal Care | 3.56 |
| Apparel / Fashion & Jewelry | 3.39 |
| Automotive - Repair, Service & Parts | 3.39 |
| Furniture | 3.29 |
| Finance & Insurance | 3 |
| Shopping, Collectibles & Gifts | 2.61 |
| Automotive - For Sale | 2.34 |
| Sports & Recreation | 2.34 |
| Restaurants & Food | 2.18 |
| Real Estate | 2.1 |
| Travel | 1.92 |
| Arts & Entertainment | 1.72 |
Average Google Ads Search Advertising CPC In Canada, By Industry
| Industry | Cost (in CAD) |
|---|---|
| Insurance | 6.1 |
| Marketing & Advertising | 3.12 |
| Legal | 2.92 |
| Online Banking | 2.7 |
| Internet & Telecom | 2.17 |
| Online Education | 2.16 |
| Home & Garden | 1.43 |
| Automobile Dealership | 1.4 |
| Travel | 0.89 |
| Real Estate | 0.85 |
| Beauty & Skincare | 0.82 |
| Jewellery | 0.73 |
| Fitness & Health | 0.63 |
| Fashion Retail | 0.47 |
| Cryptocurrency | 0.45 |
| Pharmaceuticals | 0.36 |
| Electronics | 0.28 |
Market Trends
The industry table above only reflects a snapshot in time; market trends are constantly changing, and an industry that saw little Google Ads competition might see transformations that lead to increased CPC rates.
Keywords can also be particularly volatile; if an innovative new product or service emerges on the market, businesses may fiercely compete over ad space to cement themselves as the biggest player in the new space.
To understand how market trends can affect CPC rates, just look at the massive increase in search volume for the term “AI” over the past 5 years:
Interest has skyrocketed—and as a consequence, so has competition over Google Ads space for the term. The CPC rates for AI-related search terms have increased but if interest begins to die down, rates will likely decrease as a consequence.
Quality Score
Your Quality Score is the rating that Google assigns your ad. Your Quality Score depends on a number of factors, including:
- Your clickthrough rate (CTR)
- The quality and relevance of your landing page
- The quality and relevance of your ad text
- The relevance of the keyword to your ad group
- How well ads on your Google Ads account have performed historically
An ad’s Quality Score ranges from 1 to 10; you want your ad to get as close to a 10 as possible. As with everything else in the world of Google Ads, the actual score you’ll need to earn a top spot varies depending on a number of factors, including the average Quality Score of your competitors and the maximum bid you’ve set for your ads.
We’ll discuss Quality Score in greater detail in the next section, “How Does Google Ads Determine Your CPC?”.
Bid
Your bid amount has a substantial effect on your Google Ads pricing; it’s the maximum amount you’re willing to pay-per-click. Setting a very high maximum bid can be tempting, as outbidding your competitors can dramatically improve your performance, but overbidding can eat through your advertising budget fairly quickly.
Google Ads tackles disparity in bid amounts through a clever automated system; instead of paying your maximum bid, you pay slightly more than your next highest bidding competitor (usually 0.01$ more). This is known as a second-price auction, and it reduces your total ad spend—but if you’re not cautious, you can still end up overspending.
Budget
Your total Google Ads budget is the average amount you’re comfortable spending on your Google Ads campaign each day; it’s a number you set in Google to avoid the overspending problem we addressed earlier. Managing your maximum bid relative to your budget is one of the keys to maximizing the number of Google Ads you’ll display to potential customers.
s disparity in bid amounts through a clever automated system; instead of paying your maximum bid, you pay slightly more than your next highest bidding competitor (usually 0.01$ more). This is known as a second-price auction, and it reduces your total ad spend—but if you’re not cautious, you can still end up overspending.
Ad Type
There are 6 primary types of Google Ads. Here’s a list of those ads, and a quick comparison of their usual CPC:
- Search ads (displayed on Google Search results) ($$$)
- Display ads (displayed throughout the Google Display Network) ($$)
- Shopping ads (displayed on Google Shopping and other Google properties) ($)
- Video ads (displayed on YouTube) ($)
- App ads (displayed on various platforms, including the Play Store) ($$$)
- Discovery ads (displayed on the Discover Feed and other platforms) ($)
The ads we’re focused on in this article are Google Search ads, and the costs we’ve discussed reflect that. A Google Ads campaign may sometimes feature a mix of all of these ad types, however—it all depends on your business, your budget, and your goals.
To learn more about the types of Google Ads, we highly recommend Zapier’s article All 9 Types of Google Ads, Explained; it goes into some of the ad types that fall outside of the above primary categories.
s disparity in bid amounts through a clever automated system; instead of paying your maximum bid, you pay slightly more than your next highest bidding competitor (usually 0.01$ more). This is known as a second-price auction, and it reduces your total ad spend—but if you’re not cautious, you can still end up overspending.
How Does Google Ads Determine Your CPC?
When someone makes a Google Search, Google checks to see if the search term matches any relevant keywords that advertisers are bidding on. If it does, Google enters any relevant ads into an auction. Google then automatically takes three steps to determine the winner of the auction—these steps are key to understanding the ad auction process:
Quality Score
The first step is determining the Quality Score of each ad; each ad is given a score between 1 and 10, using the factors we described in the “Quality Score” section above. You want to get as close to a 10 as possible; there’s often steep competition for Quality Scores, and many ads may get an 8 or above.
Ad Rank
Google then uses a formula to determine your Ad Rank. The formula for Ad Rank is the ad’s Quality Score multiplied by your maximum bid. The ads with the highest Ad Rank scores are the ones that get displayed—with the highest-scoring ad being displayed first.
The Ad Rank formula highlights the importance of your Quality Score; an ad with a lower maximum bid but a much higher-quality score can outrank a high-bid, low-quality ad.
Cost-Per-Click
Now that Google has determined the Ad Rank of each competitor, it uses a formula to determine the CPC of your ad. The formula is Your Competitor’s Ad Rank/Your Quality Score, + 0.01$.
Imagine you have a $1 max bid on an ad with a Quality Score of 8, giving you an Ad Rank of 8. Your competitor has the same maximum bid ($1) with a Quality Score of 6, giving them an Ad Rank of 6.
Your Ad Rank is higher, so you win the position—but instead of paying your maximum bid of $1, you pay 6 (Your competitor’s Ad Rank) / 8 (Your Quality Score) +0.01$, for a total of 0.76$; that’s 25% less than your max bid!
Google Ads Pricing Basics
- On average, businesses in the United States pay $1.99 and $4.01 per click on Google Ads.
- On average, businesses in Canada pay $1.66 per click on Google Ads.
- Businesses typically pay $100-$10,000 per month on Google Ads.
What Other Google Ads Costs Should I Expect?
Now that you know how much Google Ads costs, there are some additional spending items you can consider if you want to increase the reach and ROI of your Google Ads campaign.
Google Ads management costs
You can hire an agency like First Rank to manage your Google Ads for you. Ads management fees depend on your industry, the size of your business, and other factors.
Google Ads management software
There are several free and paid PPC tools if you want to handle your Google Ads in-house: Companies like WordStream offer a variety of Google Ads tools, while companies like Unbounce can help you improve your landing pages. Google Ads works on a multitude of different factors, so you’ll want a whole suite of different tools to optimize your performance—some are paid, some are free, and you should expect to spend anywhere from $20-$400 a month on tools, depending on your needs.
Understanding Your Google Ads Budget
Setting your daily Google Ads budget allows you to tightly control your ad spend. When you’re running a monthly budget, you can take that budget and divide it by 30.4 to get your average daily budget.
Here’s how your ad budget is broken down on Google Ads:
- Budget: The average amount you’re willing to spend each day
- Bid: The maximum amount you’ll pay-per-click; as discussed, this also influences your chances of winning ad space
- Spend: The amount Google charges you each day for ads. Note that your actual spend can be up to 2x your daily budget
Google will never charge you more than your daily spending limit (2x your daily budget) or more than your monthly spending limit (your average daily spend x 30.4). When Google goes over those limits, it’s known as “over-delivery”—and Google won’t charge you.
The reason Google can exceed your average daily budget is that some days, your ads will get a lot of traffic, while other days can be much slower. By allowing you to pay for ad space when it’s relevant, all while never exceeding your monthly budget, Google can display your ads to more potential customers.
By carefully monitoring your monthly Google Ads spend and adjusting your maximum bid, you can make the most out of your ad campaign. At First Rank, we can help you gain insights into how you can adjust your budget and bid to get more potential customers to click on your ads.
Want To Improve Your Google Ads Campaigns? Contact First Rank
Running Google Ads is complex; just answering the question “How much does Google Ads cost?” takes thousands of words of explanations, tables, graphs, and more.
Fortunately, you don’t need to crunch the numbers on your next Google Ads campaign, or even to fully understand how Google Ads auction system works—you can trust us to tackle all of that for you, and more.
Here at First Rank, we currently manage over 50 different Google Ads campaigns, and we’ve managed dozens more over our time as an agency. We use the insights we’ve gained from all of those campaigns to create a comprehensive strategy—one that reflects your industry, your unique goals and needs, and your budget.
Google Ads can net you an incredible ROI; you just need to manage your campaign the right way. Trust First Rank to do it all for you, from building perfect landing pages to choosing the right keywords to target. Contact us for a free consultation today.
FAQ
The cost of Google Ads campaigns varies from business to business; you can expect to pay anywhere from $100-$10,000 a month on Google Ads. These costs reflect Google Ads pricing but they don’t include other services like Google Ads management or tools to optimize your Google Ads
The average CPC for Google Ads in the United States is between $1.99 and $4.01. In Canada, Google Ads costs substantially less, with an average CPC of around $1.23. Costs vary significantly by industry, with legal and insurance ads typically costing more than average, and travel and recreation ads typically costing less than average.
The range a small business might pay for Google Ads per month varies dramatically, with businesses spending anywhere from $100 to over $5000 a month. The amount you’ll want to spend will depend on your expected ROI, your marketing budget, and other factors.
Jacob Kettner is the owner and CEO of First Rank Inc., a digital marketing agency based in Winnipeg, Manitoba. He currently sits on Manitoba Chamber of Commerce Small Business Advisor Council which assists people grow their small businesses in Manitoba.
