How much does Google Ads really cost in Australia [2022]?

Australian businesses spend millions each year on their Google Ads costs. On average, Google Ads cost individual businesses between $3,000 and $20,000 per month. These are significantly wide-ranging amounts because there are so many factors involved. When we consider how much Google Ads costs in Australia, we also need to consider agency management fees or the cost of running your own campaigns.

Digital marketing is complex. Rather than easing the load for business owners, marketing managers, and marketing coordinators, digital tools have added to the diversity of the landscape, creating more opportunities but also making life more complicated.

You may find yourself handling many different roles while simultaneously wrestling with budgetary concerns.

You may also struggle to understand the finer points of Google Ads or you may be reluctant to use a PPC agency after having bad experiences in the past. And yet you need a viable Google Ads strategy, so what’s the answer?

It’s no secret that Google Ads costs money, especially once management costs are factored in. However, working with the right agency increases your chances of gaining a solid return on your investment.

This article looks at what Google Ads management really costs in Australia. If you’ve been asked to setup and manage a Google Ads campaign, consider the opportunity cost of doing it yourself versus hiring an experienced Google Ads agency.

The opportunity cost of managing Google Ads yourself instead of employing a Google Partner agency

Opportunity cost of running your own Google Ads campaign

There are different ways to define the cost of running your Google Ads account. The most obvious is, of course, the direct cost per click — Google Ads works on a CPC basis, and so you’ll pay for each of these clicks.

But there are other costs too. We’ve already mentioned the management cost, and this is something you will have to factor into your advertising budget if you use an agency to handle your ad placement.

If you opt to run the campaign yourself, you may end up saving money on management fees, but there are also opportunity costs. This refers to the opportunities that are lost because you choose to run the ad campaign yourself without employing a partner agency. You have finite time and resources. Directing efforts into managing a Google Ads campaign means you can’t focus on your core strengths and your overall marketing strategy. You’re also missing the opportunity to leverage an experienced agency’s intellectual property.

We’ve seen businesses give up on Google Ads, complaining it is too expensive and didn’t provide any return. In these cases, it is poor campaign management that is to blame.

Critical mistakes we see with poor-performing Google Ads campaigns

We see a lot of mistakes in Google Ads accounts

Unfortunately, inexperienced campaign managers tend to make the same mistakes again and again, contributing to overall Google AdWords cost.

When we take over an account, some of the most common mistakes we’ve spotted are:

Selecting the wrong keywords for your ad

While Google Ads is different to SEO, it still depends on a strong keyword strategy. Failing to conduct keyword research using the Google Keyword Planner tool is a common error.

Not selecting negative keywords

Google Ads works on a CPC basis, which means you want to avoid garnering any irrelevant clicks that are not going to give you the conversion you seek. Failing to set negative keywords is a serious oversight that can bleed your budget dry.

Failing to use Google Ads reports and tools

Google Ads provides a range of reporting options and tools, including Ad Rank and quality score reports. Make sure you are using these properly.

Tracking the wrong types of conversions

What do you want your users to do when they encounter your ad? You’ll need to track this properly — for example, do you want to track asset downloads, mailer sign-ups, or direct purchases?

Making funding errors

Underestimated Google Ads spend and underfunding the account is a major error and, unfortunately, a common one too.

What factors affect the cost of a Google Ads campaign?

Factors affecting the cost of a Google Ads campaign

Advertising on Google search engine results pages is not free, and the pricing of this form of advertising is based on the cost per click of the advert as well as an external monthly management fee.

But what other factors influence the cost of each click?

The landing page

The prospective customers’ experience of your landing page may have an impact on the cost of your campaign. Just as importantly, a poor user experience will directly affect the amount of conversions you achieve, meaning that you will have to spend more to get the same number of leads.

The auction system

If you win the chance to run your ad on the display network with a high maximum bid, you may not necessarily pay close to that bid. However, if a competitor comes close to your maximum, you may end up paying more — up to the maximum limit.

The industry

Some industries are more competitive when it comes to search ads, and this may impact the price of the CPC bid.

The device

Consider mobile traffic when you define your campaign, and think about device targeting. Clicks from some devices may be more expensive than others.

The location

The location of your market segment will have an influence on CPC.

The timing of the bid

You may find that CPC is less favourable at certain times of the year, such as in the run-up to Christmas or another holiday.

Google Ads agency management fees explained

Google Ads agency management fees explained

Google Ads agency management fees can be broken down into two separate categories:

Fixed fee

Under the fixed fee model, there is no sliding scale. You simply pay the same pre-defined fee each month to enjoy ad management services.

Advantages

Agencies receive guaranteed income regardless of the client spend, while clients can better plan their budget in the future.

Clients can choose to increase their ad spend at strategic points without increasing management fee spend.

Disadvantages

Clients still need to pay the same management fee even if they are not increasing their ad spend.

There is no guarantee of return on investment, and the fee will still need to be paid regardless of the outcome.

Percentage of media spend

Agencies may bill you according to a percentage of the total media spend. Basically, the more you spend on funding your ad, the more money the agency will receive according to their pricing model.

Advantages

You gain more control over how much you want to spend on your Google Ads budget.

If you are not spending much on your ad campaign, you will pay only a relatively low management fee.

Disadvantages

Your management fees increase as your Google Ads campaign spending increases.

Spending can very quickly get out of hand and see you parting with significant amounts of money even if you are not receiving a return.

Placing limits on your Google Ads spend without appropriate guidance can be detrimental to the results of your campaigns. Most campaigns have a minimum ad spend attached to them in order to be successful.

Can’t I reduce Google Ads cost with paid search management software instead of paying an agency?

Can paid search management software save money?

It’s certainly possible for business owners to use paid search management software to handle ad management on PPC campaigns. This will allow users to target keywords and optimise their daily budget without overspending on agency fees.

However, there are downsides to this. While software like MarinOne, Opt, and AdEspresso do provide management tools and help national and local businesses avoid monthly management fees, the best piece of software tends to be expensive.

This can make it difficult to balance your monthly budget. What’s more, there are often steep learning curves associated with this kind of software.

The short answer is — yes, this can be a cheaper option, and it can provide positive return on ad spend (ROAS), but it is advisable to tread very carefully.

How do I determine the right Google Ads budget?

How to determine the right Google Ads budget

How much does Google Ads cost? Australia is home to a large number of small businesses, many of which are trying to get to the bottom of this question. Of course, Google Ads pricing varies enormously, so it can be hard to set an effective budget. Take a look at a few of the key considerations you will need to make before you begin ad scheduling or planning your monthly Google Ads strategy.

Defining a clear marketing objective

Before you begin to set your maximum bid and define your budget for the PPC campaign, you first need to consider what you are aiming for. Set a marketing objective and define the metrics you will use to measure this.

There are also other factors to consider, such as your landing page — is this landing page optimised to attract customers once they have clicked through from the Google ad?

Understanding current conversion rates

Click-through rate is not necessarily an indicator of conversion rate. As you set your monthly spending limit for PPC advertising, you will need to consider current trends — in particular, how many of your customers are currently converting?

Understanding customer average lifetime value

Remember that small businesses can benefit immensely by getting more out of their customers and fostering strong, long-term relationships. Research your customers, understand how much they are spending on average, and consider how you can enhance this average spend post-conversion.

Researching average cost per click

Research your target keywords, understand which are the most expensive keyword categories, and get a rough idea of how much you will need to pay per click. These will help you as you set an average daily budget.

Consider long-tail keywords too to capture more specific searches that may be closer to conversion.

5 questions you must ask any Google Ads management agency before hiring them

Questions to ask any Google Ads agency before hiring them

What is your Google Ads pricing structure?

Find out whether the Google Ads cost is calculated according to a fixed fee or according to a percentage of the total ad spend.

What scheduling options do you provide?

Google Display Network makes it possible to schedule ads to support specific demographic targeting. This makes campaigns more likely to be successful.

What previous results have you achieved for clients?

Most management agencies won’t be able to give you any guarantee on a higher ad position or return on investment, but they should be able to provide you with some data on what they have achieved for previous clients.

Where can ads be displayed?

Google Search Network allows PPC ads to be displayed across different properties within the Google family.

Your agency should be able to give you some indication of where ads will be displayed.

What are your keyword policies?

Discover how the agency will research keywords and utilise the Google keyword planner tool.

Ask about relevant keywords that impact on ad cost and monthly spend, as well as negative keywords.

Careful management keeps Google Ads campaign costs down

You’ll need to stay on top of your monthly Google Ads spend if you decide to manage the campaign yourself. It is advisable that you gain experience from a mentor or another expert before you go down this road.

While there are no guarantees of success when using an agency, choosing the right agency partner will help you to manage your campaign more effectively. Why not book a free 30 minute consult? We can also audit your existing account and give you some quick wins for improving performance – email us for more info!

Mike @ Eurisko

Mike @ Eurisko

Mike Bullen is a digital marketing strategist and serial inventor/entrepreneur who combines a solid digital background with the technical know-how to deliver real results.With a passion for the Perth Start-Up scene, Mike launched Eurisko as a digital marketing consultancy and usually has a project or two of his own on the side, where he hones his results-driven approach.Mike’s ability to generate more leads, more sales and ultimately more revenue for his clients is a testament to his proficiency with SEM, SEO, web analytics, marketing automation, UX / CX, email marketing, and social media marketing, including social advertising, and earned media amplification.Mike’s focus when delivering projects is to optimize & amplify digital experiences to generate more leads, more sales and more revenue.

Eurisko

Eurisko is a digital marketing agency in Australia that helps local businesses drive more traffic, engage more customers and generate more revenue. Regardless of size, business model or industry you are in, as your online marketing agency, we have the experience to tailor the right digital marketing strategy to amplify and optimise your online campaigns. Our in-depth knowledge garnered from our many years’ experience within the digital marketing industry translates to excellent, meaningful and measurable results for our clients.

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