In the world of digital marketing, one of the most frequently asked questions by business owners and PR agency clients is: how much budget should be allocated to Google Ads to ensure that the activities are effective? The answer to this question is not clear, because the costs of advertising in Google Ads depend on many factors. We will analyze them in the article below and show various settlement models that may affect the cost of running an advertising campaign.
These factors influence advertising costs
Ad typewhich one you choose has a big impact on costs. The most popular form of advertising is search promotion, where the cost per click (CPC) is usually the highest. In turn, advertising on the advertising network may be cheaper, but less effective in terms of generating conversions.
Cost per click varies depending on the industry. In highly competitive sectors, such as financial, legal or insurance services, rates can reach up to PLN 10, 15 or 20 for one click. The competitive element is difficult to get around, but it can be minimized through appropriate advertising strategies.
Advertising schedule and the type of devices you target can also impact costs. If it's the same time your competition is also advertising heavily, expect to pay more.
What do the billing models look like in Google Ads?
The most popular settlement model is CPC, from English Cost Per Click, i.e. cost per click. Therefore, the advertiser pays for each click on his ad. In practice, this means that a fee is charged for each person who clicks on the ad and is redirected to the advertiser's website. CPC is one of the most frequently used models in Google Ads campaigns.
Another model is CPM (English Cost Per Mille), in which the advertiser pays for every thousand views of his ad. This is a frequently used model in internet marketing, allowing you to assess the effectiveness of a campaign in terms of the number of views rather than interactions. It works well when the goal is to increase brand recognition.
CPV (English Cost Per View), or cost-per-view, is a video advertising billing model in which the advertiser pays for each time the ad is viewed. This model is commonly used in video marketing campaigns, especially on platforms like YouTube.
In the case of the model CPA (English Cost Per Action), the advertiser pays for specific user actions, such as making a purchase, subscribing to a newsletter, or filling out a form. This model is particularly effective in campaigns where achieving specific marketing goals is key.
CPL (English. Cost Per Lead) is a settlement model in online marketing in which the advertiser pays for each contact acquired, called a lead. Lead is a person or company that has expressed interest in the advertiser's offer, e.g. by filling out a contact form, subscribing to a newsletter, or downloading an e-book.
CPS (English Cost Per Sale) this a model used mainly in e-commerce, where the advertiser pays only for the sale of products or services. The cost of sales can be specified as a percentage of the sales value or a fixed amount for each transaction.
CPI (English Cost Per Install) is a billing model in online advertising in which the advertiser pays for each time a user installs an application. This is a measure of the effectiveness of a user acquisition campaign (User Acquisition – AU).
How to plan an effective campaign?
Returning to the question posed in the title of the article, i.e. what budget for Google Ads, we already know that it depends on many variables. These include the ad type, industry, schedule, and devices on which the ads will appear. Choosing the right settlement model is crucial to achieving the expected results at optimal costs.
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