How Much Does PPC Cost & Is It Worth It?

How Much Does PPC Cost?

If you’re asking how much does PPC cost, you’re probably looking to grow your traffic quickly. PPC definitely offers potential for quick growth but it has to be managed in the right way. I appreciate that paying for traffic can seem like a big step, but in truth it needn’t be.

I’m going to tell you how to estimate potential PPC costs and outline the benefits. Along the way I’ll discuss why PPC costs shouldn’t dissuade you from allocating budget to test out some paid advertising campaigns.

PPC Cost Preamble

I’ve provided PPC consultancy for many years and fielded questions from several FDs concerned that PPC is simply a great way to bleed cash.

As an aside, I worked with one company where the new FD told me I should switch off all PPC activity because it was costing too much. Had I done so the business would have run into the ground because PPC amounted to around 60% of their business. It was also by far the most profitable channel out of them all… even when adding my fees into the mix!

When sitting down with another FD to explain how PPC works, he told me “this is like you’re taking us to Vegas on our money!” I understand the concern, but looking at cost alone does no justice to the real value of PPC at all.

Large multinational brands burn through multiple millions of dollars in PPC advertising every year and have teams managing their paid advertising budgets.

There are three very simple reasons for this. They know it:

  1. Drives profits.
  2. Promotes their products
  3. Increases their brand reach.

PPC does this in a highly effective way… assuming you manage your campaigns correctly of course.

Estimating How Much PPC Costs

There are two ways of looking at this to figure out cost and to understand what you can get for your money:

  • What budget will you need?
  • How much does it cost on average to get a click on your ads?

You take your budget and divide it by the average cost per click (CPC) to understand how much traffic you’ll likely get. This can help you to understand whether your budget is sufficient for what you hope to achieve.

Initial budget is fairly easy to set. You’ll likely already have a figure in mind of what costs you could or would absorb, but estimating an average cost per click specifically for your campaigns is more elusive.

Without taking proof from the pudding it’s impossible to say precisely how much a new campaign CPC will cost. There are tools we can use to help us predict the cost of attaining a click for a specific position in page results, but you never know the real cost until your campaign begins to acquire clicks.

This is because there are many factors that determine cost per click for a given keyword for a specific account:

  • Keyword type.
  • Competition.
  • Niche.
  • Quality of your landing pages.
  • Relevance of your target keywords to your landing pages.
  • Relevance of your target keywords to your ad copy.
  • Account history.
  • Location.
  • Time of day.

The more advertisers bidding on a keyword, the more likely it is that average CPC will increase. As with all things, competition pushes the price upwards.

New campaigns too tend to cost more until each PPC system understands how your keyword bids, ads and campaigns perform and how ad viewers intact with your ads.

Over time, when your campaigns accrue performance metrics, you’ll find your PPC costs stablilize… until they’re disrupted by more aggressive or more relevant bidders.

Tools to Estimate How Much PPC Costs

Free PPC Cost Estimation Tools

The first place to start estimating how much your PPC might cost is to use The free keyword research tools in Google Ads and Microsoft Advertising provide a prediction of how much a click costs on a keyword by keyword basis.

You’ll need to set up a Google Account to access Google Ads and apply for a Microsoft Advertising Account too.

Both Google Ads and Microsoft Advertising are good places to get a feel for average CPC, but as mentioned perviously, they won’t tell you precisely how much you’ll spend when your ads are clicked.

Subscription-Based PPC Cost Estimation Tools

SEMrush offers a PPC cost estimation tool that provides predictions broken down by:

  • Country.
  • Region
  • Currency.
  • Industry.

I’ve found it particularly useful for keyword analysis and preparing client pitches, especially when used in tandem with the Google Ads and Microsoft Advertising keyword tools.

WordStream offers a variety of subscription models for it’s PPC tools priced to fit the demands of small through to larger agencies.

SpyFu is another tool providing functions that add competitor analysis into the PPC cost estimate mix. SpyFu estimates the keywords competitors bid upon along with the money they spend.

PPC Cost Estimates Across Niches

Your industry also plays a part in determining how much your PPC costs will be. Some niches are more competitive than others, and competition for the highest placement drives the price up… sometimes incredibly so.

Take this example from SEMrush. It shows a summary report of the average CPC across a range of US industries:

SEMrush Average US CPC Cost by  Industry
Source: SEMrush February 2020*

* SEMrush uses it’s own database containing historical data about keywords to create estimations for average PPC costs.

My Experience of PPC Costs

I’ve managed PPC accounts in the following industries:

  • Personal finance.
  • Fashion.
  • Sports.
  • Real estate.

The cost of the average CPC was completely different for each industry.

Personal finance was the most expensive by a country mile. I expected to pay up to $10 per click for some personal finance keywords, whereas I’d pay between $1 to $2 per click in the fashion sector. Both niches were competitive, but personal finance was extremely so due to the overall value of the products I promoted.

Summary

  • PPC presents one of the fastest ways to generate traffic to a site.
  • How much PPC costs depends on a range of factors.
  • Different industries demand a very different average cost per click.
  • If average cost per click is high for your industry, you’ll require a large daily budget to compete.
  • PPC requires a lot of testing before you hit the sweet spot for your particular objective.
  • It’s difficult to run a successful PPC campaign without a sufficient budget to test.
  • Upfront PPC costs can seem very high. However success is very easy to measure. If some aspect of your campaign isn’t delivering on your objectives, you can simply shut that element down immediately.

Just to finish up with something anecdotal, PPC costs can escalate if your campaigns are not managed correctly. Here’s how Google Ads mistakes can skyrocket your costs and blow your budget!

Thanks for visiting!

Paul

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