If you’ve found your way past the title of this article, odds are you are really more concerned about making your business more money than exactly how much AdWords will cost you. As with most business expenditures, one of the goals of using Google AdWords is to be able to show a return on your investment. With that, I am going to discuss the different variables to consider when determining your initial investment into AdWords, as well as what to include when calculating the ROI of your AdWords account.

For the sake of simplicity, we’ll take a look at costs as they relate to the:

  1. Setting up your Google AdWords Campaign(s)
  2. Maintaining and Optimizing your Campaign(s)

AdWords Account and Campaign Set Up

If you decide to create a campaign on your own or with your in-house team, the costs you have to keep in mind when setting up a Google AdWords campaign are mostly built around time. At the simplest level these costs typically include:

  • Opening a Google Account, and then opening an AdWords account
  • Researching your target keywords
  • Building a structure for the account and campaigns
  • Writing copy for your ads
  • Setting up tracking / measurement

For a more effective campaign from the start, we would also recommend looking into:

  • Building landing pages specific to each ad or ad group
  • Developing image ads

If you have the time and resources to do this in-house then you probably haven’t spent a dollar to get to this point. But for those without the time or expertise needed to fully address the factors outlined above, you can always consider hiring a marketing agency that has experience in helping businesses be more successful with Google AdWords.

The cost for hiring a digital marketing agency to handle your paid search needs will likely vary by agency, and may often be affected by a variety of factors, including:

  • Competitiveness of your market (in the online world)
  • Your ad budget
  • Size of your keyword list
  • Number of different ad groups or campaigns you are building
  • Design work needed for calls-to-action, ads, landing pages, etc.

In theory, once you’ve created your paid search campaigns in Google AdWords you could go live with a campaign, let it run, and never touch the account or campaigns again. It may or may not be successful (spoilers: it probably won’t be right out of the gate), so the best way to improve the effectiveness of your campaign is through regular maintenance.

 

After Ads Go Live: Clicks, AdWords Maintenance and Optimization

To this point, your only costs would have been to build the campaign and perhaps your landing pages. Once you make the campaign live, you’ll begin paying for your advertising so that you can try to get found by people who are searching for the keywords that you’re targeting.

In most AdWords accounts, you only pay when someone clicks on an ad, and you can decide how much you’re willing to pay for a click (e.g. you can say that you will pay no more than ‘x’ dollars for any click). If it costs more than what you’re bidding to get clicks for a particular keyword, then your ads will not show up.

A daily ad budget will also need to be set to indicate how much money you are willing to spend with Google. This entails setting the maximum you are willing to spend on all clicks for a given day (Google actually averages budget for a 30-day period; some days you may be higher than the daily ad budget, but over a 30-day period you would not spend an average per day that is greater than your set daily budget).

Being able to set maximum cost per click (CPC) bids and daily budgets gives you greater control over your campaigns. This is a powerful tool to use during the initial launch period of a campaign since you can get some valuable insight at lower budget levels, making changes to the campaigns and then increasing the budget to hopefully increase ROI for the campaign.

Aside from paying for clicks, there are some other costs to consider as they relate to your Google AdWords costs once a campaign goes live. Once again, if you decide to analyze and optimize your campaign on your own, then the costs come in the form of your time. At the most basic level, your time would be spent on:

  • Analyzing stats and the performance of your campaigns
  • General editing of campaigns
  • Developing new ads and ad copy
  • Modifying your target keywords
  • Expanding campaigns to promote new products and services
  • Testing landing pages
  • Looking into new channels

When companies do attempt to handle their own AdWords campaigns without any expertise in pay-per-click management, maintaining and optimizing the account can potentially turn into a daunting and costly task- in terms of both time and money (from lost conversion opportunities as well as overspending). You may not be aware of how changes to one area of a campaign will impact another. For example, there are instances where increasing the maximum CPC for an ad group will increase clicks on the ads; there are instances where it will actually decrease clicks.

This is why it makes sense for businesses to partner with an agency whose team is familiar with Google AdWords, best practices in optimizing campaigns, and stays up-to-date with the latest changes in paid search.

The cost for teaming up with a PPC agency to analyze and manage your account will vary based on a handful of different factors, including:

  • Competitiveness of your market (in the online world)
  • Your ad budget
  • Size of your keyword list
  • Number of different ad groups or campaigns you have
  • Design work needed for calls-to-action, ads, landing pages, etc.

If you decide to hire an agency to assist with your Google AdWords campaigns, the overall costs may or may not be more, but the expertise they bring to the table will hopefully make your AdWords campaign more successful and help you experience a higher ROI.

 

Measure the Return on Your Investment, Not the Cost of AdWords

At the end of the day you can be certain that there’s an investment required to start and test even the simplest of AdWords campaigns, but the key is to find a level that allows you to achieve your ROI goals, and then build off of that.

There may be instances where it doesn’t make sense to advertise (e.g. if clicks on ads cost more than your product/service, and you can’t expect repeat business), and performing a small test with paid search should help you determine whether or not this is the case for your business. The big thing to keep in mind is that you want to be able to calculate and monitor the ROI of each campaign, ad group and keyword.

If you’re considering whether Google AdWords may be a good option for helping you get found online, or if you need help building a test campaign, then contact us today. As a Google Partner agency with 4 AdWords Qualified Individuals on our team, we’ll help you get a better understanding of how paid search can fit into your digital marketing strategy.

About Brian McGrath

Over the past 20 years, Brian has experienced many aspects of marketing, including brand management, copywriting, campaign coordination, paid search marketing, social media marketing and internet marketing. Brian now uses this knowledge to help our clients maximize their presence on the internet. His expertise in all things marketing gives our clients – and the Mannix Marketing SEO team – a distinct advantage in all areas of search. His extraordinary analytic skills provide SEO, social media and paid search clients with real, measurable results. To maintain his cutting edge expertise, Brian stays current on the latest trends in social media and digital marketing by reading industry publications, attending conferences, and consulting with peers.