PPC Pricing – What Does PPC Cost in 2020?

We all know how vital search engine optimization is to modern marketing.

Rising up the organic ranks is vital to your success. But it also takes time. Sometimes more than six months before you start to see a return on your investment.

Luckily, there is a more immediate option that can work on its own or alongside SEO.

It’s called Pay-Per-Click advertising, and it’s commonly run through a service called Google Ads, formerly known as Google Adwords.

You might have heard of it.

With PPC, you can get instant results on the world’s most popular search engine. Traffic starts being sent directly to your site the moment you activate your campaign.

If this sounds too good to be true, fear not. PPC is very real and very doable.

But what does it cost?

The most honest answer you can get to this question is, “it depends.”

That’s not a cop-out.

PPC pricing is decided by the advertiser and is based on your chosen budget and target keywords.

What Is PPC?

Pay-Per-Click advertising is precisely what it sounds like. It is a form of advertising in which you pay per click that you receive. There are many different types of pay-per-click ads, but the most common is done through Google Ads.

The way it works is simple. Your listing comes up through chosen keywords before the organic results on a search engine results page or appears on Google’s vast display network. If a viewer clicks on your ad, you pay.

Just choose the keywords you want, set a maximum bid for how much you are willing to pay per click, then the highest bid with the best ad appears at the top of the results.

Some industries can expect to pay more for their clicks. However, for less competitive industries, you might only spend a few cents.

This is all dependent on the kind of competition you’re facing.

You can also customize both when and where your ads appear. If you know that your audience is typically online and searching at a specific time of day, you can have your ads appear primarily during that period. You can also zero in on specific geographic locations.

How Does PPC Placement Work?

The maximum bid for your keywords is not the only determining factor in deciding your placement.

Google also assigns every listing with a Quality Score (QS).

The QS is determined by the ad’s relevance to your chosen keyword, the click-through rate of the ad, and the quality of the landing page the ad points to.

Placement is determined by your maximum bid times your quality score.

For example:

A $5 maximum bid with a QS of 10 gives you an Ad rank of 50.

The top ad rank is featured on the top in a search network result.

It’s essential to create quality ads because a high QS could lead to a lower ad spend. As you can see in the above image, the highest max bid actually has the lowest score.

To determine how much you’re paying per click, Google takes the ad rank of the result below you, divides it by your quality score, and adds one cent.

The best way to get a better QS (and save money on ad spend) is by working with a dedicated agency that knows how to make an ad that will impress Google.

How is Your PPC Budget Spent?

Budgeting is complicated. That’s why it’s always a good idea to trust the guidance of a PPC agency that can manage your campaigns and ensure that you’re getting the best bang for your PPC buck.

When you’re using Google Ads, campaigns allow you to control the daily budget. That means you can prioritize specific campaigns and assign them more ad spend. It will enable you to feed some of your stronger performing campaigns while taking away advertisements that point to products or services that may not be your focus at the moment.

It’s always a good idea to break the monthly budget into daily budgets for every campaign that you’re running.

For example, a campaign of $0.75 per click that wants to generate 1,000 clicks per day would have a daily limit of $750.

Remember, you’ll never pay more than the maximum bid for a click, but you might end up paying far less based on your competitors.

(Image Source)

How Much Should You Pay for PPC in 2020?

When you work with a management services company, you’re going to pay more than if you were managing your own PPC. However, you’re also going to have a better chance of being prominently featured while getting the most for your ad spend.

When you start with a PPC management firm, you first have to decide if you’re looking to do a basic PPC campaign, a moderate one, or something more aggressive.

Obviously, the more PPC management pricing goes up, the more aggressive your campaign becomes.

The price of a managed PPC campaign can also increase when you add additional services like the design and creation of landing pages to go with your ads.

Typically, a firm will charge you a one-time setup fee to cover all of the leg work they have to do, plus a monthly premium on top of your ad spend to manage your campaign.

What Does a Basic PPC Campaign Cost?

Basic PPC packages should cover an ad spend up to $5,000 and include up to 40 keywords in the campaign.

When you’re running a basic PPC plan, you’re targeting the Google network only. You should run google text and banner ads as well as remarketing. Remarketing is when your ads are shown to people who have been to your site in the past.

It’s also a good idea to run display ads in the Google network, as it can be featured on industry-relevant websites.

You could potentially run YouTube video ads as well under a basic plan. However, you would have to make the video in-house — That’s not typically a service offered with basic campaign management.

What does something like this cost?

Most agencies will charge a one time set up cost of around $1,000 to get started on a basic plan.

After that, the monthly management costs will be around 25% of the ad  spend. The more the ad spend and platforms used, e.g. Amazon, Google, Microsoft, eBay, Walmart etc. The more work it is to manage ad spends.

What do you get for that money?

Basic PPC management services includes:

Competitor Analysis

The agency will take a long hard look at the level of competition you’re dealing with.

Not only will it examine the actual competitors themselves, but also what they’re doing as far as PPC marketing is concerned.

The point of this is to understand what it is you have to overcome. You don’t want to duplicate what your competitors are doing from a PPC standpoint; you want to exceed it.

Campaign Development and Strategy

PPC needs a strategy. Your PPC firm will come up with a strategic take on getting your content out there.

A lot of this has to do with targeting. What times will your ads run? Where will they run? Who are you targeting specifically?

Keyword Research

What are the highest value keywords that are also relevant to your industry and your content? That’s what your PPC firm will have to figure out.

Once you know what keywords your audience is searching for, you can create a PPC campaign specifically aimed at them and their search habits.

You want to throw more of your ad budget toward the more high-value terms with a lot of competition.

Tools like Google’s Keyword Planner will help here.

Industry Analysis

The agency needs to understand your industry forward and back if it wants to create an effective PPC campaign.

It needs to research not just your competition, but also rising trends in the industry. It’s an essential step in learning what your audience is searching for.

Ad Copywriting

Your ads need compelling copy.

Even if you’re the number one result on the search network, you’re still competing with several other ads.

Your ad copy has to pull the user in and make them want to click on you over your competitors. PPC agencies know what it takes to create ads that convert.

Performance Testing

You have to know how you’re doing, both good and bad, during a PPC campaign.

The agency will continuously check on the progress of your ads to determine if they are succeeding or failing. That’s the first step in course correction.

Ongoing Keyword Development

The agency will stay on top of keyword trends to help you keep your campaign up to date.

Sometimes the terms you’re targeting lose some traction, and others rise to take their place. You have to know when that happens if you’re going to remain on top.

Google Analytics Integration

Using Google Analytics is a great way to track the success of your ad campaign.

It’s a popular tool used by a growing number of websites. The agency will integrate Analytics into your site and use it to measure your success.

Goal Tracking

In the beginning, you should talk with the agency about your specific goals. What are you hoping to accomplish in terms of new clients or profits through this campaign?

The agency will keep track of those goals, letting you know what has to be done to meet or exceed them.

Strategic Management of Bids

Bid management is strategic and takes a lot of time and effort.

The agency deals with this, working within the confines of your established budget to ensure that you’re getting the most penetration possible.

Analysis and Reporting of Results

You need to know how your campaign is doing. After all, it’s your money.

The agency should be providing you with reports every month and going through the results with you.

What Does a Moderate PPC Campaign Cost?

A moderate PPC campaign should have a monthly ad spend between $10,000. It usually features up to 100 keywords in the campaign.

When you’re creating a more expanded campaign, it’s usually a good idea to run ads in both the Google and Bing Ads networks. While Google is a much more extensive network, it doesn’t hurt to cast a bigger net.

A moderate campaign includes everything involved in a basic PPC campaign.

It also comes with additional monitoring of clicks and conversions, while also checking for fraud activity.

The agency sets up and manages rule-based bidding, where the bid examines each keyword independently rather than looking at how they might work together.

For a moderate PPC campaign, an agency will typically charge an initial setup fee in the first month of $1,750.

It would then be around 20% of the monthly ad spend with a minimum of $5,000.

What Does an Aggressive PPC Campaign Cost?

An aggressive PPC campaign is generally considered to be a monthly spend of plus $100,000. It includes up to 5000 keywords and is conducted on both the Google AdWords, Bing Ads and other networks like Walmart and eBay.

An aggressive PPC campaign involves everything included in the above levels but adds international management. That’s ideal for companies that do business outside the US.

This level should also include some form of landing page creation and conversion rate analysis as well.

Art should also be featured in an aggressive agency managed campaign. You should include at least one set of banner ad designs for display and remarketing campaigns.

Something like this is generally going to run a $2,500 one time setup fee. After that, you’re looking at a base monthly price of 12% of your monthly ad spend, with a minimum of $100,000.

How Much Does PPC Retargeting Cost?

Retargeting involves showing your ads to people who have visited your site and left without making a purchase.

Have you ever noticed that once you visit a website, you start to see ads for it popping up all over the place?

That’s not a coincidence. It’s retargeting at work.

On average, 96% of the people who visit your site will leave without buying anything. Retargeting gives you a second chance to get in front of them and try to win them back.

Retargeting can be a great way to lure back prospects who initially showed some interest in your company but failed to convert for one reason or another.

All levels of PPC management services should include retargeting efforts for you.

But how much of your budget should be allocated to retargeting?

Companies typically spend 10% of their ad budget on retargeting through Google Ads.

The cost of remarketing varies based on industry, much as we discussed earlier. If you have a ton of competition, you’re going to be paying a lot for every click. However, companies with light to moderate competition will usually see somewhere between $0.66 and $1.23 per click.

In Conclusion

PPC is a great way to get your website out there using both the Google display and search networks.

By setting a reasonable bid budget and creating quality PPC ads, you’re more likely to succeed and gain more clicks.

That’s why it’s so important to entrust your PPC digital marketing to a skilled agency, staffed with Pay-Per-Click marketing professionals.

Now that you know what average PPC pricing looks like, you’ll be able to get quotes from various agencies to see what works best with your budget.

Need some help? Get in touch today.

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