How Much Do Google Ads Cost in 2023? A Concise Guide for Australian Businesses

Google Ads is a popular online advertising platform that helps businesses reach their target audience, increase brand awareness, and drive conversions. The cost of advertising on Google Ads varies depending on various factors such as the industry’s competitiveness, the ads’ quality score, the campaign objectives, and the targeting options chosen by the advertiser. 

Understanding these key factors can help businesses make the most of their Google Ads budgets and achieve better results.

The average cost of Google Ads ranges from $1,000 to $20,000 per month, with the average cost-per-click (CPC) being around $2 to $4 for the Google Search Network and $1 to $2 for the Google Display Network in 2023.

It is worth noting that these figures may fluctuate greatly depending on the individual circumstances of each campaign, making it crucial for advertisers to continuously monitor and optimise their ad strategies to ensure the best results.

Table of Contents

In recent years, Google Ads has become an increasingly popular advertising platform in Australia, with businesses across various industries leveraging it to expand their reach and attract potential customers. 

Understanding the cost of running Google Ads in Australia is essential for businesses investing in this digital marketing strategy.

The average cost-per-click (CPC) for Google Ads in Australia is around AUD $3 for search campaigns. However, the CPC may vary significantly depending on the industry.

Average cost per click in Australia by industry

In terms of monthly Google Ads expenses, businesses in Australia may find their average expenditure ranging from AUD $1,000 to $20,000 per month. The wide range of potential advertising costs can be attributed to various factors, including bidding strategies, competition, budget, and agency management fees.

As for the current and market trends surrounding Google Ads in Australia, many businesses are opting to invest more in digital advertising due to advancements in technology and increasing internet penetration. 

With the growing importance of online presence, advertisers are looking to maximise their marketing efforts by tapping into various ad formats offered by Google Ads, such as Display, Video, and Shopping ads.

Understanding Google Ads

Google Ads: An Overview

Google Ads is a powerful online advertising platform that allows businesses to create and manage digital advertising campaigns. With a Google Ads account, advertisers can target specific audiences, control their advertising budget, and measure the success of their campaigns. This platform offers various campaign types designed to help businesses achieve their advertising goals.

Campaign Types

Google Search Network

The Google Search Network focuses on search-based advertisements, where paid ads can appear on Google search results pages and other search-related websites in the network. This campaign type is ideal for businesses wanting to increase their search results visibility and drive more website traffic. Advertisers can target specific keywords relevant to their products or services, ensuring their ads are visible to users actively searching for them.

Google Display Network

In contrast to the Search Network, the Google Display Network focuses on display ads that appear on various websites, videos, apps, and other online properties outside of the search results pages. 

Display Network campaigns are suitable for businesses looking to generate brand awareness, promote products and services, or engage with potential customers. This campaign type offers various targeting options, including demographics, interests, and remarketing, allowing advertisers to reach a broader audience effectively.

Using both the Google Search Network and Display Network campaigns, businesses can create a comprehensive online advertising strategy that targets potential customers at different stages of their purchasing journey. 

By understanding these campaign types, advertisers can effectively allocate their budget and design ads that resonate with their target audience, ultimately achieving their digital advertising goals.

Cost Analysis

It is important to understand, pricing structure, your bid, cost per click (CPC), and your return on investment (ROI) estimation, to make informed decisions when allocating your Google Ads budget.

Pricing Structure

Google Ads operates on a pay-per-click (PPC) model, where advertisers only pay when their ad is clicked. This means the more clicks your ad receives, the higher your ad spend will be. 

Your Google Ads budget can be allocated daily or monthly, with flexible spending limits depending on your campaign objectives and budget constraints. Remember that management fees may apply, especially if you’re using a Google Ads agency to manage your Google Ads campaigns.

Bid and CPC

The bid plays a crucial role in determining the cost of Google Ads. Advertisers set the maximum amount they’re willing to pay for a click, known as the maximum cost-per-click (CPC) bid. This determines how much you are ready to spend on a specific ad placement or keyword. The actual CPC you pay is often less than your maximum bid CPC.

Factors affecting the actual CPC include:

  • Competitor bids on the same keywords
  • Quality Score (a measure of the quality and relevance of your ads)
  • Ad Rank (the position of your ads on search engine results pages)

ROI Estimation

Estimating the potential return on investment (ROI) for your Google Ads campaigns is essential for setting realistic expectations and making informed budgeting decisions. To calculate the ROI, consider the following factors:

  • Average CPC
  • Average conversion rate on your website (the percentage of clicks that lead to a conversion, such as a purchase or lead)
  • Average value per lead or average revenue per purchase

To illustrate this, let’s assume your average CPC is $2.50, your conversion rate is 5%, and your average revenue per conversion is $50. To calculate the cost-per-conversion (or cost-per-lead), divide the average CPC by the conversion rate:

Cost per conversion = $2.50 / 5% = $50

In this example, your ROI would be equal to your average revenue per conversion minus your cost per conversion, divided by your cost per conversion, then multiplied by 100:

ROI = (($50 – $50) / $50) * 100 = 0%

This underscores the importance of optimizing your Google Ads campaigns, as not every advertiser can achieve a positive ROI on google ad spend without careful planning and management. It is essential to continually monitor, adjust, and optimize your campaigns to maximize performance and minimize costs

Factors Affecting the Cost of Your Google Ads Campaign

When it comes to understanding the cost of Google Ads, several factors can impact the overall price: Keyword Significance, Quality Score, and Targeting Options.

Keyword Significance

Keywords play a crucial role in determining the cost of Google Ads. Some keywords are highly competitive, meaning more advertisers are competing to rank for that specific keyword. In highly competitive industries, certain keywords can have significantly higher costs due to increased competition.

To lower costs and improve campaign performance, it is crucial to conduct thorough keyword research. By identifying specific long-tail keywords relevant to your business, you can target less competitive, yet more specific keywords and increase the likelihood of attracting your target audience.

Quality Score

Quality Score also greatly impacts the cost of Google Ads. This metric assesses the quality of your ads, landing pages, and keywords. Google calculates the score on a scale of 1 to 10, with 1 being the lowest and 10 the highest. A higher Quality Score means your ad is more relevant and provides a better user experience, leading to lower costs and improved ad positioning.

To improve your Quality Score, focus on three main aspects: ad relevance, click-through rate (CTR), and landing page experience. Ensure your ads are relevant to the keywords you are targeting, optimise your CTR by creating compelling ad copy, and provide a seamless user experience on your landing pages.

Targeting Options

The different targeting options available in Google Ads can also influence the overall cost. By refining your targeting, you can narrow down your audience and ensure your ads are shown to the most relevant users.

Device targeting allows you to focus your ads on specific devices, such as mobile or desktop. Campaign targeting helps you reach your target audience based on parameters like location, language, and demographics. Location targeting is especially essential to improve brand visibility in specific areas or cater to a local audience.

By effectively utilising targeting options, you can optimise your ads to reach the most relevant users and, in turn, increase the return on your investment in Google Ads.

Budgeting and Bidding

Budgeting Process

The budgeting process for Google Ads is crucial to the success of your advertising campaign. To begin, you will need to determine your daily budget which is the amount you are willing to spend each day on your ads. This amount can be set based on your overall digital marketing budget and the specific goals you want to achieve.

Setting a daily budget allows you to control your spending and ensures you do not exceed your desired spending limits. It’s important to remember that the actual amount spent may vary slightly, but Google should never charge you more than your monthly budget limit.

Understanding Bidding

When it comes to advertising on Google, understanding the bidding and ad auction process, is essential. Bidding is the method used to determine which ads are displayed and in which position. The Google Ads auction system runs in real-time, and the ad position is determined based on your bid and other factors, such as your ad’s quality score.

There are a number of different bidding strategies available:

  • Target Cost Per Action or Target CPA
  • Target Return on Ad Spend or Target ROAS
  • Maximise Conversions
  • Maximise Conversion Value
  • Enhanced Cost Per Click or ECPC
  • Maximise Clicks
  • Manual CPC
  • Target Impression Share
  • Target CPM or tCPM
  • Viewable CPM or vCPM
  • Cost-Per-View or CPV

What ever bidding strategy you choose, it’s important to closely monitor and adjust your bids based on the performance of your ads and the Cost per Click (CPC) of your target keywords. This helps in optimising your campaign to achieve the desired results while managing your spending efficiently.

How to Lower the Cost

Google Ads can be a powerful tool for businesses looking to increase their online presence, but the cost can sometimes be a concern. In order to maximise your return on investment, it’s important to lower your Google Ads cost where possible. By focusing on key areas such as optimising landing pages, bid strategies, and negative keywords, you can effectively lower your cost per click (CPC) and improve your overall ad performance. 

Google Ads can be a powerful tool for businesses looking to increase their online presence, but the cost can sometimes be a concern. In order to maximise your return on investment, it’s important to lower your Google Ads cost where possible. By focusing on key areas such as optimising landing pages, bid strategies, and negative keywords, you can effectively lower your cost per click (CPC) and improve your overall ad performance.

Relevant Ad Copy

Having relevant ad copy is crucial for lowering the cost of Google ads because it directly impacts the Quality Score, a key metric that influences ad rankings and costs. 

When your ad copy is closely aligned with the target keywords and landing page content, it signals to Google that your ad is highly relevant to users’ search queries. This leads to a higher Quality Score, which, in turn, can result in lower costs per click (CPC) and better ad placements.

Additionally, relevant ad copy enhances user experience by ensuring that the information provided in the ad aligns with what the user is seeking. This can lead to higher click-through rates (CTR), which further improves your ad’s performance and can ultimately reduce your overall Google advertising expenses.

Optimising Landing Page

An effective landing page is critical in Google Ads campaigns, as it influences your quality score and conversion rates. One way to lower your cost is by improving your landing page’s relevance, load times, and user experience.

Ensuring visitors find the information they seek quickly and easily provides a better user experience, leading to more conversions, a higher Quality Score, and cheaper advertising costs. It’s a win every way you look at it.

Bid Strategies

One effective way to lower your own Google advertising costs is by adjusting your bid strategies. There are two primary options to consider:

  • Manual bidding: This approach allows you to have full control over your bids, enabling you to test various bid amounts to find the sweet spot between cost and results. Be cautious, though, as setting your bids too low can lead to lower ad visibility, while setting them too high can exhaust your budget quickly.
  • Automated bidding: Google Ads offers various automated bidding strategies such as, Maximise Conversion Value, Target Cost Per Acquisition (CPA) and Target Return on Ad Spend (ROAS). These strategies utilise Google’s machine learning algorithms to optimise your bids with the goal of achieving better results with a lower cost. Be prepared to monitor and adjust your bid strategy over time to ensure you’re meeting your advertising goals.

Deciding on a bid strategy largely depends on your ad campaign’s objectives, budget, and level of expertise with Google Ads.

Negative Keywords

Implementing a well-structured list of negative keywords can significantly help lower your Google Ads cost. Negative keywords prevent your ads from showing for irrelevant search queries. By refining your target audience and excluding search terms that don’t align with your products or services, you can reduce the number of unqualified clicks and improve your overall campaign performance.

Regularly review your search term reports and identify any irrelevant keywords that might be triggering your ads. Continuously expand and optimise your negative keyword list to ensure you only target relevant search queries and save on any wasted spend.

By focusing on these key areas, you can meaningfully reduce your Google Ads cost while still driving results. Remember that a successful ad campaign is an ongoing process; regular analyses and continual adjustments are crucial for achieving the best results.

Utilising Google Tools

When managing Google Ads campaigns, leveraging Google’s own tools can greatly enhance the effectiveness of your online marketing efforts. One essential tool is the Google Keyword Planner, which helps you discover relevant keywords, estimate search volume, and forecast the performance of your campaign. By targeting the right keywords, your ads are more likely to reach the intended audience and drive desired results.

Another important aspect of Google Ads management is optimising your Ad Extensions. These extensions enhance your ads by showcasing additional information such as contact details, business locations, reviews, and more.

The correct implementation of ad extensions can improve your overall ad quality score, which in return can lead to a lower cost-per-click (CPC) and higher ad ranking.

Managing Google Ads

Whether you manage your own Google Ads spend internally or engage a PPC Agency or Marketing Agency, being aware of the whats happening in your account is critical. Agencies typically charge Management Fees for their expertise and services, which can range from a monthly retainer to a percentage of ad spend or a combination of both.

When selecting a Google Ads management solution, it is important to weigh the cost of management fees against the potential benefits of partnering with an experienced PPC or marketing agency. Such a partnership can provide insights and support tailored to your business needs, ultimately driving better campaign performance and results.

Case Study: Using Google Ads in Retail

Google Ads has proven to be a powerful tool for retail businesses, helping generate potential leads throughout the various stages of the customer lifecycle. By implementing well-designed Google Ads campaigns, retailers can effectively target specific groups of potential customers and increase the possibility of converting them into sales.

One successful example in the retail industry involved Good Feet Store; with 10 locations across Australia they specialise in custom-fitted arch support inserts and orthotics. 

They employed Google Ads to increase leads and growth, focusing on appropriate segmentation of potential clients, such as ready to purchase, researching product, and researching pain conditions. By utilising ads at each stage of the funnel, Good Feet Store achieved a 112% growth in leads and a decrease of 35% in cost per lead.

About the Author

Director and Founder at Firewire Digital. Brogan has over a decade of experience in eCommerce, SEO and Google Ads. Leading his team and clients to success on every project, Brogan is obsessed with achieving solid ROI and creating long-lasting client relationships.

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