What is Pay-Per-Click Advertising?
Pay-Per-Click advertising is a type of digital advertising model in which advertisers are charged a fee for each click on their ad. PPC services are commonly used in search engine advertising efforts, where advertisers bid on keywords relevant to their business and create ads that appear at the top of search engine results pages (SERPs) when users search for those specific keywords.
You may also hear this referred to as paid search campaigns.
How Does PPC Placement Work?
As we mentioned above, PPC campaigns work through an auction-based system where advertisers bid on specific keywords or phrases related to their products or services.
These PPC ads are typically found at either the top or bottom of Google’s search engine results pages (SERP). When a user conducts a search that matches the pre-selected keywords or phrases, the search engine determines ad placement based on ad rank, which is itself based on a number of factors.
Ad rank includes factors such as:
- maximum bid
- ad quality
- ad relevance
- keyword competitiveness
- expected CTR (Click-Through-Rate)
With Google Ads (formerly Google AdWords), the higher the ad rank (meaning the higher the maximum bid and quality/relevance of the ads), the more likely the PPC ad will be displayed in a top SERP position.
How Much Does PPC Cost in 2023?
One of the most common questions we get as a leading PPC agency is, “How much does PPC cost?”
When it comes to PPC pricing, there are a lot of factors that must be considered in order to determine how much you can expect to pay.
There is no “one size fits all” answer here. As such, the cost of PPC is unique to each individual advertiser and cannot be accurately estimated until a solid PPC strategy has been established.
However, that is not to say we can’t give you a general idea of how much you can expect to pay in terms of PPC cost.
Below, we list the average prices (across all industries) using different PPC pricing models.
Cost Per Click (CPC)
Cost Per Click, or CPC, is a metric that gauges the expense of each ad click in PPC campaigns.
CPC is calculated by dividing the total ad campaign cost by the number of clicks received. Depending on the competitiveness of the industry, the average cost-per-click can range anywhere from $0.10 to $50.
In 2023, the average CPC for Google AdWords falls at about $2.59 per click. This is currently the average across all industries, although extremely competitive industries – like consumer services and the legal industry, for example – typically have a much higher average CPC cost.
Cost Per Mille (CPM)
CPM stands for Cost Per Mille or Cost Per Thousand. This PPC pricing model measures the cost of every 1000 impressions for paid search campaigns.
To calculate CPM, you simply divide the total campaign cost by the number of impressions it received and then multiply the result by 1000.
As of right now, the average CPM across all industries is about $3.12 per every 1,000 impressions.
Cost Per Action or Cost Per Acquisition (CPA)
CPA, which stands for both Cost Per Action and Cost Per Acquisition, is another type of PPC pricing model that charges an advertiser only when a specific, pre-determined action takes place.
This usually relates to some type of conversion, whatever that may look like for your specific industry (phone call, link click, sale, newsletter signup, etc.).
Because this pricing model requires the user to take action further than just clicking on the ad, it is typically much more expensive. In fact, in 2023, the average CPA ranges between $45.27 and $65.80, depending on the selected advertising channel (more on this below).
PPC Pricing vs. PPC Management Costs
Keep in mind, average PPC costs are different from average PPC management costs. In addition to PPC ad spend, you will also need to save room in your budget for PPC management services.
Some PPC companies charge a flat fee for PPC services, while others charge a percentage of ad spend.
At Digital Logic, our PPC management pricing model is 20% of ad spend, typically. We justify this expense by consistently managing effective PPC campaigns that provide a much higher return on investment than most PPC agencies.
What Factors Determine the Cost of PPC Campaigns?
Once again, there are a number of factors that determine the cost of the ad spend for PPC campaigns. This includes the competitiveness of the industry you are in, the number and type of ad campaigns you wish to run, and your desired results, to name a few.
Industry
A huge factor in how much of your PPC budget you can expect to spend is the industry in which you operate. This will affect the total advertising cost, in most cases.
More competitive industries, such as the legal field, consumer services, and technology, will require a much higher ad spend than other less competitive industries because, in general, the average costs and profit margins are higher than less competitive industries.
When facing higher competition, it is necessary for businesses to allocate a larger monthly budget for monthly ad spend and, in some cases, PPC management.
When other businesses spend more money on ensuring they have an effective PPC campaign, your business will need to follow suit and increase monthly ad spend in order to compete at a local level.
The only way to circumvent this is by working with an experienced PPC management agency that understands the ins and outs of ad copywriting, bid management, multi-channel attribution, and how to succeed on the world’s most popular ad network, Google.
Data Optimization Tools
Hypothetically, you could run a PPC campaign by only utilizing free PPC tools or management tools, such as Google Keyword Planner or Google Analytics, for example.
However, those free management tools can only get your ad campaigns so far.
In order to conduct more in-depth research and analyses, you’ll need to invest in more advanced PPC management software that offers enhanced functionality and capabilities.
While these programs are costly upfront, the data they provide can seriously stretch your ad spend if the PPC manager understands the ins and outs of paid search campaigns.
If you’re trying to maximize your monthly spending limit, we strongly recommend working with a PPC management company that has extensive PPC management experience in your specific industry.
Advertising Channel Selection
Another weighty factor for PPC costs is the PPC advertising channel that is used.
The most popular (and, therefore, most competitive and expensive) option is, of course, Google Ads. Other options include Microsoft Advertising (formerly known as Bing Ads), YouTube Ads, Facebook Ads, Instagram Ads, and Twitter Ads, to name a few.
Learn more about our Google AdWords ads management service.
Number of Ad Campaigns
As you might imagine, the number of ad campaigns you run plays a prominent role in how much you pay for PPC.
Running multiple campaigns simultaneously requires more of an ad budget as well as more time and resources from your PPC management agency, resulting in higher service costs.
Types of Ad Campaigns
The type of ad campaign you choose also affects PPC pricing.
For example, you may choose to advertise via the Google Display Network or the Google Search Network. You may also choose between social media ad campaigns, remarketing ad campaigns, lead generation ad campaigns, shopping ad campaigns, and so on.
While typically, the PPC management pricing remains the same regardless of ad types, the decision you make will influence the price of your overall PPC campaign.
Experience of Advertising Manager
The experience of the person managing your PPC campaign will also play a large role in your PPC management cost, whether that’s a PPC marketing agency, an in-house specialist, or a freelancer.
Depending on who you choose to work with, you may be charged either a flat fee or a percentage of your ad spend.
We provide more information on finding the best PPC advertising companies in the highlighted blog.
Desired Results
Last but certainly not least is the desired results you have for your PPC campaign.
If you want a sure-fire way to outperform your competition, or you want to see results fast, you’ll need to invest more ad spend into your paid search campaign.
PPC Advertising Cost for Google Ads
As you likely already know, PPC advertising costs depend on a variety of factors.
However, on average, you can expect to pay between $1 to $2 per click on the Google Search Network, which displays ads in the search results, and between $0.10 to $1 for ads on the Google Display Network, which features ads on websites, apps, and other Google-owned properties.
How Does Ad Spend Work on Google Ads?
With Google Ads, you have control over the keywords that trigger your ads.
Once the keywords are selected, Google’s ad platform will require a maximum bid. This indicates the maximum amount you’re willing to pay for each click on your ad. (Keep in mind, with PPC ads, you’re only paying when someone actually clicks on your ad.)
If your bid is high enough to compete with the top bidders for that keyword, your ad may appear at the top of Google’s SERP with a distinctive “Paid Ad” tag.
What Determines a PPC Campaign Cost on Google Ads?
There are several factors that determine the cost of a PPC campaign on Google Ads, including but not limited to:
- industry
- maximum bid
- keyword competition
- ad relevance/quality
- ad format
How is My Google Ads Budget Used?
Google Ads allows you to have complete control over your ad spend. Advertisers can choose from a daily, weekly, or monthly budget.
By setting a daily Google Ads budget, you determine the maximum amount you are willing to invest per day. A weekly ad budget will determine the max amount for the week, and so on and so forth.
Google Ads then works to evenly distribute your PPC budget throughout the selected time frame, maximizing ad visibility while still acting within the parameters of your specific Google Ads budget.
Can I Lower PPC Costs on Google Ads?
Yes, there are a number of strategies you can implement to lower your ad spend on Google Ads.
Here are a few of them:
Improve Your Quality Score
Optimizing your Google Ads campaigns, keywords, and landing pages can help improve your Google Quality Score. This leads to better ad rank at a lower cost, thus lowering the cost of ad spend.
Refine Keyword Targeting
By conducting thorough keyword research, you can identify relevant keywords with lower competition. This can drastically lower your ad spend.
Use Negative Keywords
By using negative keywords in your ad campaigns, you can prevent your ads from appearing in searches that are irrelevant to you. This saves ad spend by avoiding unnecessary clicks.
Ad Scheduling
By reviewing the performance of your PPC ads at different times of the day and week, you can use this information to only schedule ads during the most profitable times. This can lower your monthly ad spend
Of course, these are only some of the methods you can use to lower your PPC costs. At Digital Logic, we know all the tips and tricks for keeping PPC costs to a minimum while still reaching your target audience and generating high-quality clicks.
PPC Advertising Cost for Remarketing Ads
Remarketing ads, similar to standard PPC ads, can vary in price based on your specific industry.
However, the cost for remarketing ads tends to fall slightly lower than for standard PPC costs, averaging at about $0.66 to $1.23 per click.
Google Local Service Ads Cost
Google’s Local Service Ads, or LSAs, are a different type of paid advertising platform in which the advertiser pays for each lead rather than for each click.
Depending on the industry and current market, ad spend for Local Service Ads can cost anywhere from $6 to $30 per lead.
Because this type of ad campaign provides more consistent results, the increased price is well worth the return LSAs provide.
Digital Logic’s PPC Management Services
Managing PPC advertising campaigns can be difficult and time-consuming, especially for those who don’t specialize in the area.
That’s why, at Digital Logic, we are happy to provide a range of PPC management services to help your business achieve its marketing goals.
There are plenty of PPC agencies out there, but let us show you what sets Digital Logic’s PPC management services apart from the rest.
PPC Campaign Management Strategy
At Digital Logic, our PPC management experts are ready to help you create a personalized PPC campaign management strategy to meet your company’s unique needs, with services such as ad copywriting, competitor and industry analysis, landing page optimization, conversion tracking, and more.
Google Analytics Integration
Integrating Google Analytics into your PPC campaign is an important part of an effective PPC campaign strategy.
Seeing the data first-hand can provide valuable insights into data such as user behavior, engagement, and conversions, allowing you to gain a deeper understanding of the effectiveness of your PPC ads as well as optimize the campaign to drive even better results.
Check out our Google Analytics tutorial for more information.
Competitor and Industry Analysis
Performing a PPC competitor analysis and industry analysis is a crucial aspect of effective PPC campaigns.
By analyzing your competitors’ PPC campaign tactics, including what works for them and what doesn’t, we can identify potential opportunities and refine your PPC campaigns to stay ahead in your market.
Ad Copy
At Digital Logic, we recognize the significance of integrating targeted keywords into PPC ad copy to reach the target audience.
We also know that it is crucial that your ad copy remains relevant and captivating to engage said audience, thereby increasing the number of ad clicks.
By combining the right keywords with compelling ad copy, our team creates powerful PPC ads that generate website traffic and boost conversions.
Landing Page Optimization
Each landing page should create a strong positive first impression for the high-quality leads that click on your ad. Optimizing these landing pages ensures that your ad rank remains high by effectively converting your target audience.
We optimize your landing pages by ensuring relevance to the clicked ad, incorporating targeted keywords, providing clear calls to action, and ensuring user-friendly navigation.
Split Testing
Split testing, also called A/B testing, is an important technique that we utilize for all of our PPC management services. It involves comparing multiple ad versions to determine the most effective version.
At Digital Logic, we experiment with various ad elements such as ad copy, headings, images, and calls to action, gathering valuable insights into your target audience’s preferences and adjusting your PPC strategy accordingly.
Transparent Reporting
When you put your hard-earned money into something, it only makes sense that you’d want to see exactly what (or where) that money is getting you.
That’s why we are very open with our clients when it comes to the analytics we gather from their PPC campaigns. We keep our clients up-to-date on all key metrics, including impressions, clicks, and conversions, ensuring they have full visibility into the performance and impact of ad campaigns.
Why is PPC Important for Business?
There are a number of reasons why PPC marketing is important for businesses in today’s day and age.
PPC advertising:
- provides an effective and easily-measurable way to drive relevant traffic to your website.
- is a cost-effective advertising method that allows for precise budget control.
- provides valuable insights and data on user behavior.
- is an effective way to quickly increase brand visibility.
- helps drive conversions and achieve marketing goals.
Why Choose Digital Logic for PPC Management Services?
As a leading PPC agency offering comprehensive digital marketing services, Digital Logic is the ideal choice for businesses looking for affordable and effective PPC management services.
What sets our PPC campaign management services apart from the competition is our ability to deliver tailored, cost-effective marketing solutions that align with the unique needs and goals of your business, whatever that may be.
Whether it’s keyword research, ad creation, bid management, or performance tracking, our team of PPC experts at Digital Logic is dedicated to delivering real results and helping businesses achieve their digital marketing goals.
For custom PPC pricing or to learn more about the PPC marketing services we provide at Digital Logic, speak to one of our specialists today!
