How Much Does it Cost in 2017 to Advertise on Google in the UK?

21 August 2017

insurance advert example

“How much does it cost to advertise on Google?” is becoming more of a commonly asked question for many UK business owners. If this is you, you are probably already convinced on the value of Google Adwords and the benefits it has.

There are many Google Advertising Channels that Google offer, such as Google Search, YouTube, Display Advertising, Google Shopping and Gmail Advertising.

In this post we’re going to focus on the Google Search network, as it’s often the place many businesses first start. We’ll also cover how much it will cost your business and how to calculate a sensible monthly investment.

A Quick Summary Overview of Google Adwords and the Search Network

The Google Adwords Search Network enables businesses to advertise on the Google Search Engine Results pages. What this means is that businesses pay on a ‘per click’ basis for visits to their website, like the advert example below:

Benefits of this include the following:

  • Ability to target users who are actively searching for your products or services;
  • Provides an alternative investment to SEO and other marketing channels;
  • Ability to quickly shift a campaign focus and adapt it with regular performance analysis;
  • Ability to measure the success of your investment with Conversion Tracking (we’ll cover this later).

Below is a great video by Google which explains how Adwords works if you are still unsure.

“So how much does Google Adwords estimate it will cost me for an average #1 advert position?”

Different keywords can have various ranging costs associated to each click. So to calculate an industry average, we used the Google Adwords tool called Keyword Planner, which provides historical estimates of keyword costings over a period of time. We used this tool to look at the top 10 most popular UK industries online today and produced an average cost per click for an advert to appear at position 1 on the Google Search Results page.

Google Adwords advertising costs

From our research we found that, on average, the Insurance industry came out to have the highest cost per click across all the keywords we analysed.

However, “Start your own online store” was the keyword phrase with the highest estimated cost per click, with a shocking £63.72 per click (for an average #1 advert position).

Live Costings Analysis VS Google’s Historical Estimates

In our research we also analysed the difference between what Google’s Keyword Planner estimated historically, and the live first page bid costs.

And… the results were quite surprising. We found that between the Adwords Keyword Planner and live account costs there was around a 200% difference in the cost per click.

“But hang on… why does the average cost per click vary on a keyword basis?

The average cost per click can vary for a few reasons:

  • An increase in the amount of competitors bidding for your keyword phrases;
  • The seasonal trends and popularity of keyword phrases;
  • The relevancy of your advert and landing page in relation to the keyword phrase you want to appear for. This can have a impact on how much you will pay per click, how frequently your adverts are shown and what position your advert is likely to be shown in.

Hal Varian, The Chief Economist at Google, explains in more detail how an advert’s position is calculated.

“So how do I calculate a sensible monthly investment for Adwords?”

1. Start by thinking about the keyword phrases related to your business.

It’s important that your chosen keyword phrases have a balance between relevancy  and popularity. Too general and it’s likely you’ll be paying for clicks from visitors that might be unlikely to convert for your business. Too niche and it’s likely you can expect a low amount of clicks, which is great for your budget but not so good for your sales targets.

2. Set a realistic budget aside.

For any PPC campaign starting out, it’s essential at the outset that your budget is reasonable. Why? Campaign progression. More of an Adwords budget means more insight into how your campaign is performing. The conversion rate of campaigns will differ from campaign to campaign.

Example:

If your industry average cost per click is £4, and your monthly budget is £400, this means that you’ll roughly have to set a daily budget of around £13, which will attract a possible 3 clicks per day.

If this still sounds feasible, think about the fact that you’ll probably want to test out various keywords. The more keywords you add into your account, the more diluted your data can become.

Therefore, at the end of the month, deciding the best performing keywords might prove inconclusive because there is simply just not enough data to provide accurate recommendations. There may also be other factors which can affect performance, such as the device someone uses, the time of day, the day of the week, the visitor location and many more.

3. Carry out in-depth keyword research.

Once you’ve compiled a list together it’s then time to research average costings. Sometimes costs (as we’ve already seen) can vary depending on the location you want to advertise and also the competitiveness of the keywords. (It might be worth getting a Google Adwords Certified Partner involved at this stage to see how they can support you).

“OK so I have a sensible budget… what’s next?”

4. Speak to an agency that has a proven PPC experience.

This point can’t be stressed enough. If you are considering setting up an Adwords campaign yourself and you do not have any experience with Adwords, be prepared to waste a lot of your budget quickly. Adwords makes it easy to advertise and get setup, but often strategy and key knowledge of Adwords is really what’s going to drive your cost per conversion down and your conversion rate up.

Top tip

Speak to a Google Adwords Certified Partner and also ask for case studies of the results they have achieved. Also, qualify exactly what they will do each month for your business. Be wary of agencies that cannot answer this, or are not focused on your goals.

“Anything else I need to know?”

Yes! Make sure the PPC Management agency you choose has conversion tracking setup right from the start. And make sure they go the whole hog!

Google Adwords offers free conversion tracking codes which can easily be implemented on your website. These can be used to track:

  • PDF downloads;
  • Enquiry form submissions;
  • Sales calls;
  • Sales and sales revenue from the website;
  • Button click-throughs.

Although tracking conversions seems like one of the most obvious features of Adwords, many businesses fail to set it up. Knowing the number of conversions is extremely useful, as it will provide valuable insights into the keywords, adverts, and campaigns which are really working for you (and those that aren’t). It will also allow you to calculate your average cost per conversion – something extremely valuable if you have a product with a set price or a service with a one-off cost. 

We hope this post helped you to understand more about how Adwords works and how much it really costs to advertise on Google. Be sure to watch out for more posts which will help to strengthen your marketing strategy.

Ready to get started with Adwords for your business right now? Speak to us today.