Google Ads is the fastest channel to reach customers who are searching right now for what you offer. But it is also a channel where money can evaporate in a few days if you do not know what you are doing. So the question “how much does Google Ads cost” deserves an honest answer. In this article we explain what the costs consist of, how to calculate in advance whether it pays off for you, and what to expect if you outsource the management.
Google Ads cost has two parts
Many business owners mix up the two cost items. So first the distinction.
1. The ad budget. This is what you pay Google. You pay per click on your ad (cost per click, or CPC). This amount goes directly to Google, even if an agency manages your campaigns. You set the maximum per day and per month.
2. The management fee. This is what you pay an agency, freelancer or employee to set up, monitor and improve the campaigns. You do not pay this to Google.
An example: if an agency says “it will cost you € 1,500 a month”, always ask how much of that is ad budget and how much is management. They are two different investments with a different return.
What determines the cost per click?
The price of a click is not fixed. Google runs an auction: every time someone searches, the bids of all advertisers and the quality of their ads decide who comes out on top and what that click costs. Three things have the most influence:
- Competition for the keyword. The more businesses want to advertise on “personal injury lawyer”, the more expensive the click. On a niche keyword with few advertisers you sometimes pay only a few tens of cents.
- Value of a customer. In industries where one customer is worth a lot (insurance, legal services, business software) advertisers bid more per click, because they can earn it back.
- Quality of your ad and landing page. Google rewards relevant ads with a lower price per click. An ad that matches the search query precisely and leads to a page that provides the answer costs less than a generic ad pointing to your homepage.
In practice this means click prices range from a few tens of cents to many euros. What your click will cost, you can see in advance in Google’s Keyword Planner and for certain after running for one to two weeks.
Google Ads cost per month: from what budget does it pay off?
This is the question we get asked most often. Our honest answer: do not advertise with less than € 500 ad budget per month if you outsource the management. There are two reasons for that.
First, you need data. With a few tens of euros per month you get too few clicks to see which keywords work and which do not. You cannot adjust, and adjusting is exactly where the return comes from.
Second, the management has to be in proportion to the budget. If you pay Google € 200 and management fees come on top of that, the ratio is skewed. The agency cannot deliver a good return, however well it does its job.
Have less budget? Then you are better off running a small campaign yourself first, or putting your money into SEO. Read more about that in how much does SEO cost.
Calculate in advance what a lead or sale will cost
Before we start a campaign, we do a calculation. You can do it yourself too. You need three numbers: the expected cost per click, the expected conversion rate of your website (what percentage of visitors make an enquiry or order) and the value of a customer.
A worked example with fictional numbers:
| Step | Value |
|---|---|
| Cost per click | € 1.50 |
| Website conversion rate | 3% |
| Cost per enquiry (1.50 / 0.03) | € 50 |
| Share of enquiries that become customers | 30% |
| Cost per customer (50 / 0.30) | € 167 |
| Average revenue per customer | € 600 |
In this example advertising pays off: a customer costs € 167 and brings in € 600. Change the conversion rate to 1% and a customer suddenly costs € 500, which makes it tight. This is how you see in advance whether Google Ads can be profitable for you. If the sum shows it cannot work, we advise against ads. Then it is better to improve your website first with conversion rate optimisation, so the same traffic delivers more.
From our own experience: at our own company Djunes (photo booth and event hire), the cost per booking through Google Ads fell from € 42 to € 26, a drop of 38%. Not by spending more, but by cutting keywords that produced no bookings and shifting the budget to what did work.
How much does it cost to outsource Google Ads?
The cost of outsourcing PPC is built up the same way at most agencies. You pay a one-off setup fee for building the account: keyword research, campaign structure, ad copy and above all conversion tracking. After that you pay a monthly management fee. How high that is depends on the scope: one search campaign in your region takes less time than ten campaigns in several countries with shopping, display and video.
Some agencies charge a percentage of the ad budget. That seems logical, but it gives the agency an incentive to make you spend more. We think a fixed management fee that matches the amount of work is fairer.
What you should expect from good management in any case:
- Accurate conversion tracking. The biggest mistake we see with new clients. Without working tracking you do not know which click produced an enquiry and you are steering blind. See also GA4 and consent mode.
- Weekly or more frequent adjustments. Adding and excluding keywords, adjusting bids, testing ads.
- Monthly reporting with cost per enquiry or per sale, not just clicks and impressions.
- Honest advice on Performance Max and other automated campaign types. They work as a supplement to a good search campaign, but not as the only main campaign. Google then gets too much freedom with your budget.
Do it yourself or outsource?
You can manage Google Ads yourself. The platform is free and Google is happy to help you set up a campaign. Just be careful with the recommendations Google itself makes: they are often aimed at spending more, not at a better return. Do you have time to dig into it weekly and a budget under € 500? Then start yourself, small and with proper conversion tracking. Is the budget growing and you do not want to spend time on it every week? Then outsourcing is usually cheaper than the mistakes you make yourself.
Still undecided between advertising and search engine optimisation? Read SEO vs PPC for the trade-off.
At Stijgt we calculate before the start whether Google Ads can be profitable for your business. If the answer is no, we say so. See our Google Ads approach or get in touch for an honest estimate.