PPC Pricing – What Does PPC Cost in 2023?
Editor’s Note: This post was originally published in March of 2020 and has been updated for accuracy and comprehensiveness.
We all know how vital search engine optimization (SEO) is to modern marketing.
Ascending the organic ranks is imperative to your success. But it also takes time. Often, it can take more than six months before you start to see a return on your investment.
Luckily, there’s a more immediate option that can work on its own or alongside SEO — pay-per-click advertising.
With PPC, you can get instant results on the world’s most popular search engine. As soon as you activate your campaign, you’ll see traffic heading to your site.
If this sounds too good to be true, fear not. PPC is very real and very doable.
But what does it cost?
The most honest answer you can get to this question is, “It depends.”
That’s not a cop-out.
As the advertiser, you’re in control of PPC pricing. It’s based on your chosen budget and target keywords.
What’s PPC?
PPC advertising is precisely what it sounds like. It is a form of advertising in which you pay per click that you receive. There are many different types of PPC ads, but most campaigns run through Google Ads.
The way it works is simple.
Your listing is displayed to Google users who type in the keywords you’ve chosen for your ad campaign. These ads are listed before the organic results on a search engine results page (SERP) or appear on Google’s vast display network.
If a viewer clicks on your ad, you pay.
Just choose the keywords you want and set a maximum bid for how much you are willing to pay per click. Then, the highest bid with the best ad appears at the top of the results.
You can expect to pay more for popular keywords. However, for less competitive keywords, you might only spend a few cents.
It’s all dependent on the kind of competition you’re facing.
You can also customize both when and where your ads appear.
If you know that your audience is typically online and searching at a specific time of day, you can have your ads appear primarily during that period. You can also zero in on specific geographic locations.
Use Google Analytics to learn about your target audience’s behavior and switch on conversion tracking on Google Ads to learn more about how your audience responds to your ads.
This helps you refine your PPC campaign to reach your target audience more effectively.
How does PPC placement work?
The maximum bid for your keywords isn’t the only determining factor in deciding your placement.
Google also assigns every listing with a Quality Score (QS).
The QS is determined by the ad’s relevance to your chosen keyword, the click-through rate of the ad, and the quality of the landing page the ad points to.
Placement is determined by your maximum bid times your quality score.
For example:
A $5 maximum bid with a QS of 10 gives you an Ad rank of 50.
The top ad rank is featured on the top in a search network result.
It’s essential to create quality ads because a high QS could lead to a lower ad spend. As you can see in the above image, the highest max bid actually has the lowest score.
To determine how much you’re paying per click, Google takes the ad rank of the result below you, divides it by your quality score, and adds one cent.
The best way to get a better QS (and save money on ad spend) is by working with a dedicated agency that knows how to make an ad that will impress Google.
The QS is determined by the ad’s relevance to your chosen keyword, the click-through rate of the ad, and the quality of the landing page the ad points to.
Your maximum bid, multiplied by your quality score, determines your “ad rank’ or placement.
For example:
A $5 maximum bid with a QS of 10 gives you an ad rank of 50.
The top ad rank features on the top in a search network result.
It’s essential to create quality ads because a high QS could lead to a lower ad spend. As you can see in the above image, the highest max bid has the lowest score.
To determine how much you’re paying per click, Google takes the ad rank of the result below you, divides it by your quality score, and adds one cent.
The best way to get a better QS (and lower your Google Ads budget) is by working with a dedicated PPC management service that knows how to make an ad that will impress Google.
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How’s your PPC budget spent?
Budgeting is complicated.
That’s why it’s always a good idea to trust the guidance of a PPC consultant or agency that can manage your campaigns and make sure that you’re getting the best bang for your PPC buck.
When you’re using Google Ads, campaigns allow you to control the daily budget. That means you can prioritize specific campaigns and assign them more ad spend. It’ll enable you to feed some of your stronger performing campaigns while taking away advertisements that point to products or services that may not be your focus at the moment.
It’s always a good idea to break the monthly budget into daily budgets for every campaign that you’re running.
For example:
A campaign of $0.75 per click that wants to generate 1,000 clicks per day would have a daily limit of $750.
Remember, you’ll never pay more than the maximum bid for a click, but you might end up paying far less based on your competitors.
How much should you pay for PPC in 2023?
When you work with an agency, your PPC management fee will be higher than if you were managing your own PPC. However, you’re also going to have a better chance of featuring first and getting the most for your ad spend.
When you start with a PPC manager, you first have to decide if you’re looking to do a basic PPC campaign, a moderate one, or something more aggressive.
Obviously, the more PPC management pricing goes up, the more aggressive your campaign becomes.
The management fee of your PPC package can also increase when you add additional services, like the design and creation of landing pages.
Typically, a PPC agency pricing model will include a one-time, flat fee to cover the setup work. You’ll also pay a monthly premium on top of your ad spend to manage your campaign.
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What does a basic PPC campaign cost?
Basic PPC packages should cover an ad spend of up to $2,500 and include up to 400 keywords in the campaign.
When you’re running a basic PPC plan, you’re targeting the Google network only. You should run Google text and banner ads as well as remarketing. Remarketing is when your ads are shown to people who have been to your site in the past.
It’s also a good idea to run display ads on the Google network, as these will be featured on industry-relevant websites.
You could also run YouTube video ads under a basic plan. However, you would have to make the video in-house — that’s not typically a service offered with basic campaign management.
What does something like this cost?
Most agencies will charge a one-time setup cost of around $1,000 to get started on a basic plan.
After that, the monthly management costs will be around $400–$430.
What do you get for that money?
Basic PPC management services include:
Competitor analysis
The agency will take a long, hard look at the level of competition you’re dealing with.
Not only will it examine the actual competitors themselves, but also what they’re doing as far as PPC marketing is concerned.
The point of this is to understand what you have to overcome. You don’t want to duplicate what your competitors are doing from a PPC standpoint — you want to exceed it.
Campaign development and strategy
PPC needs a strategy. Your PPC firm will come up with a strategic plan to increase your brand reach among your target audience.
This mostly has to do with audience targeting because it is the top strategy used to optimize PPC ads. Your PPC service will work out the best times to run ads, where they should feature, and which audience segments should see them.
Keyword research
Your PPC firm will figure out the highest value keywords that are relevant to your brand, as well as any negative keywords that can harm your campaign.
Once you know what keywords your audience is searching for, you can create a PPC campaign specifically aimed at them and their search habits.
Your agency will tone your ad budget up and down depending on the value of the keywords.
Tools like Google Keyword Planner help here.
Industry analysis
The agency needs to understand your industry inside and out if it wants to create an effective PPC campaign.
It needs to research not just your competition but also rising trends in the industry. It’s an essential step in learning what your audience is searching for.
Ad copywriting
Your ads need compelling copy.
Even if you’re the number one result on the search network, you’re still competing with several other ads.
Your ad copy has to pull the user in and make them want to click on you over your competitors. PPC agencies know what it takes to create ads that convert.
Performance testing
You have to know how you’re doing — both good and bad — during a PPC campaign.
The agency will continuously check on the progress of your ads to determine if they’re succeeding or failing. That’s the first step in course correction.
Ongoing campaign development
The agency will stay on top of keyword trends to help you keep your campaign up-to-date.
This involves checking on keywords, bids, and budget, as well as optimizing ad wording and tweaking relevance.
Sometimes, the keywords you’re targeting lose some traction, and others rise to take their place. You have to know when that happens if you’re going to stay on top.
Google analytics integration
Using Google Analytics is a great way to track the success of your ad campaign.
Google Ads can only tell you so much about the behavior of your target audience. Google Analytics will help give you a detailed picture of how your website visitors interact with your content, helping you shape your ads to meet those needs.
Plus, Google Analytics makes it easier to filter data.
While Google Ads will provide you with reports, Google Analytics makes it easier to understand the relevance of those reports and how to use them to improve your campaigns.
The agency will integrate Analytics into your site and use it to measure your success.
Goal tracking
In the beginning, you should talk with the agency about your specific goals. What are you hoping to accomplish in terms of new clients or profits through this campaign?
The agency will keep track of those goals, letting you know what has to be done to meet or exceed them.
Strategic management of bids
Bid management is strategic and takes a lot of time and effort.
The bid management strategy that you choose will determine the type of engagement you get from your target audience. In fact, bid strategy testing is one of the top 10 techniques for refining PPC ads.
The agency deals with this, working within the confines of your established budget to make sure that you’re getting the most penetration possible.
Analysis and reporting of results
You need to know how your campaign is doing. After all, it’s your money.
The agency shouldn’t only provide you with reports every month. They should also take the time to break down this data and explain its relevance.
What does a moderate PPC campaign cost?
A moderate PPC campaign should have a monthly ad spend between $2,500–$12,000. It usually features up to 2,000 keywords in the campaign.
When you’re creating a more expanded campaign, it’s usually a good idea to run ads in both the Google and Bing Ads networks. While Google is a much more extensive network, it doesn’t hurt to cast a bigger net.
A moderate campaign includes everything involved in a basic PPC campaign.
It also comes with additional monitoring of clicks and conversions while checking for fraudulent activity at the same time.
The agency sets up and manages rule-based bidding, where the bid examines each keyword independently, rather than looking at how they might work together.
For a moderate PPC campaign, an agency will typically charge a setup fee in the first month of $1,750.
It would then be around 15% of the monthly ad spend, with a minimum of $500.
What does an aggressive PPC campaign cost?
An aggressive PPC campaign is generally considered to be a monthly spend of $12,00– $50,000. It includes up to 10,000 keywords and is conducted on both the Google AdWords and Bing Ads networks.
An aggressive PPC campaign involves everything included in the above levels but adds international management. That’s ideal for companies that do business outside the U.S.
This level should also include some form of landing page creation and conversion rate analysis as well.
An agency-managed campaign at this level should also include graphic design of visual content. You should include at least one set of banner ad designs for display and remarketing campaigns.
Something like this is generally going to run a $2,500 one-time setup fee. After that, you’re looking at a base monthly price of 12% of your monthly ad spend, with a minimum of $1,800.
How much does PPC retargeting cost?
Retargeting involves showing your ads to people who have visited your site and left without making a purchase.
Have you ever noticed that once you visit a website, you start to see ads for that brand popping up all over the place?
That’s not a coincidence. It’s retargeting at work.
When you dig down into the visitor metrics, most websites tend to have a high bounce rate, with 47% of visitors clicking off your site after a few seconds.
What’s more, even though shoppers tend to pile up their online carts, 60% of purchases are never completed.
Retargeting gives you a second chance to get in front of the customers that drop off to try and win them back.
Retargeting can be a great way to lure back prospects who initially showed some interest in your company but didn’t convert for one reason or another.
Plus, you’re targeting customers who have already shown an interest in your brand, which can help to reduce advertising costs by improving return on investment. Rather than trying to convince a brand-new prospect, these potential customers are already on their way to buying.
This is why 40% of marketers are looking to increase their retargeting budget to optimize the overall efficiency of their paid ad campaigns.
All levels of PPC management services should include retargeting efforts for you.
But how much of your budget should be allocated to retargeting?
The cost of remarketing varies based on industry, much as we discussed earlier. If you have a ton of competition, you’re going to be paying a lot for every click. However, companies with light to moderate competition will usually see somewhere between $0.66–$1.23 per click.
Conclusion
PPC is a great way to get your website out there using both the Google display and search networks.
By setting a reasonable bid budget and creating quality PPC ads, you’re more likely to succeed and gain more clicks.
That’s why it’s so important to entrust your PPC digital marketing to a skilled agency staffed with pay-per-click marketing professionals.
Now that you know what average PPC pricing looks like, talk to Higher Visibility about managing your PPC campaigns today to increase the success of your paid advertising.
Since 2009, we have helped hundreds of local businesses grow their online leads and sales strategically. Let us do it for you!
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