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
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.
READ NEXT: How to set the right Google Ads budget. We show you how to set your Google Ads marketing budget with a real-life example.
Critical mistakes we see with poor-performing Google Ads campaigns
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 optimising your website for the search engines, it still depends on a strong keyword strategy. Failing to conduct keyword research using the Google Keyword Planner tool is a common error.
Looking for help with SEO? We’re a search engine optimisation company in Perth helping businesses drive more revenue from organic search.
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.
Trusting Google reps to manage your campaign
Google reps are not Google Ads support staff, they are sales reps, classified as “Google Customer Solutions” which is a scaled part of the Google Ads sales team. Their KPI is simply to get you to spend more regardless of your performance. Here is a case study as to why you shouldn’t listen to Google reps advice.
What factors affect 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 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.
READ NEXT: Google Ads Agency Pricing Models Explained. Understanding how different agencies price their services has a big impact on your ROI.
Can’t I reduce Google Ads cost with paid search management software instead of paying an agency?
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 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 Budget.
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
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.
READ NEXT: How to setup your Google Ads campaign. We show you how to set your Google Ads campaign based on our real-life customer account.
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!
