I am probably asked “How much are search ads?” more often than I am asked “How was your day?” or “What would you like for dinner?” And I’m only 13% joking. Look, I get it. I brought this on myself by becoming a marketer, but the whole square dance has gotten so predictable I can recount it with: again-I-wish-I-was-exaggerating-level-accuracy.
And it goes something like this.
Them: Hey Christi, how much are search ads?
Me: Oh, great question; that really depends. What is the value of the offer you’re hoping to promote?
Them . . .
I lost them somewhere around “it depends.” Again, I get it; it sounds evasive, but honestly, any other answer would be dishonest. So if you’re asking this question and you aren’t satisfied with the “it depends” line . . . great!
Today we’re breaking down exactly what “it depends” means.
The Two Sides of “How Much are Search Ads”:
So when we’re talking about the cost of running a Google Search ad, we’re really talking about two different things. First, the cost of the ad itself, and second, the cost to run and maintain the ad. And wouldn’t you know, the answer to both of those questions is also . . . say it with me . . . IT DEPENDS.
Side #1: The Ad Spend
The ad spend is the money you spend on the ad itself. This money is paid directly to Google from the card you set up on your Google Ads Payment profile and charged according to your preferences. (Such as on which day and/or at which monetary threshold, like $400.)
This will depend on a few things:
- How much your product/service costs
- How much competition is in your market
- Your marketing budget
The cost of your product/service
This will inform your ad budget. For example, if your product is a $10,000 bicycle, you can afford to spend maybe $5K+ on search ads because generating even 10 sales from the ad will make you $100K. But on the flip side, if you’re selling $5 keychains, you will want your ad spend to be much less because 10 sales is only $50.
There are countless formulas and ratios for this magic number, but the important thing to watch here is that your ad spend is justified by ROI.
The only exception is if you’re running an awareness campaign, because awareness campaigns don’t focus on ROI in a traditional sense; they focus on getting the brand name out there and should be seen as essentially a “marketing donation.” For an awareness campaign, you skip to the other two factors.
How much competition is in your market
This will inform the expectations of your ad. For example, if you are in New York City and there are thousands of alternatives to your service and thousands of other brands trying to advertise similar offers, you’ll likely need to spend more per click than someone in, say, Upstate New York or a market with less competition.
Marketing is a great example of this because: do you know who runs ads? Marketers! So advertising for marketing is always a steep hill because of home-field advantage, so to speak.
Your Marketing Budget
You probably don’t need to talk through this one that much. We don’t all have millions of dollars for marketing, so sometimes the clearest, most obvious boundary for what to spend on Google Search ads is what we can afford.
Once your ad is live and/or even before, you will see and hear recommendations (maybe even from me) to raise your budget, and this will only be good advice if you can afford to do so and/or if the other two preceding factors have been considered.
At the end of the day, 20 sales aren’t good for business if it costs you the equivalent of 21+ sales to get them.
As a general rule of thumb
My standard recommendation, as someone who manages an average of about $25,000-$40,000 of Google ad spend per month for more than 2 dozen clients, is to start with at least $10/day.
I have never seen a budget of less than that make any sense (again, omitting awareness campaigns). If you can afford to do more than that, you can start at as high as $20/day, but I would really stay there for the first 2-3 weeks while you train the ad (because remember PMax ads are Poo-Poo ads) and then increase it beyond that so you can be sure your money is being used in a smart way.
Side #2 Ad Management
Honestly, this one varies the MOST of everything we will talk about today.
This is the cost of managing your search ads because YES, you do have to manage them because Pmax ads are . . . ? Exactly!
This cost goes to whoever manages your ads and can vary wildly depending on who provides the service.
Some common arrangements are:
- Hourly (I’ve seen as low as $20/hour through as high as $250/hr)
- Monthly/Quarterly Retainer (I’ve seen these range from $1,000-$5,000/month/ad)
- % of Ad Spend*
- Commission-based*
* These can be tricky because sometimes they are the base cost for running the ad and other times they are an add-on tacked onto the base cost, so you would pay base + % of ad spend, for example.
The Clever Catalyst Ad Management Cost
Our pricing is hourly with NO add-ons. We charge $75/hour for all ad work. It takes us about 2 hours to create and calibrate a Google Search ad and requires 1 hour of maintenance per ad per week.
So if you’re doing the math, that’s about $150 to start the ad and $75/week to maintain and get reporting on the ad. Which is $300/month for ad management + your ad spend to Google.
The Bottom Line
So, how much are search ads? At the end of the day, “it depends” isn’t a dodge; it’s just the messy, beautiful truth.
You’ve got your ad spend (what you pay Google to play in the arena, based on: your offer, your market, and what your wallet can actually handle) and your management cost (what you pay a human to keep your campaigns from setting money on fire).
Keep an eye on both, demand a real ROI, and stop letting mystery pricing freak you out.
Got questions or want us to do the heavy lifting? You already know we’d be honored!
