How Much Does Google Ads Cost For Small Business & Is It Worth Spending?

by | Sep 20, 2019

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How much does Google Ads cost For Small Business

Are you thinking to invest in Google Ads?

But worried about Google Ads cost for small business!

The common question every small business owner has that how much will Google Ads cost their business.

How much should I spend on Google Ads?

What should I do to gain online recognition quickly?

Do not worry, you will get answers to all your queries in this post. First of all, let me tell you that Google is one of the biggest online advertising networks. Google helps you reach about 90% of internet users worldwide. In fact, to gain online recognition in a short time, advertising on Google Ads is the best option.
As per Google, “On an average $1 spend, businesses make $2”.

How Much does Googlew Ads Cost

How Much Does Google Ads Cost For Small Business?

Depending on the business, the Google Ads cost varies. There is no “one size fits all” for cost in Google Ads. The cost depends on your business type, size (small business, midsize business, and large size business), location, competition, how much do you want to spend on advertising and other variables.

As per research, Small businesses are also increasing investment in pay-per-click (PPC) advertising. A total of 65% will carry out a PPC campaign in 2017, up from 40% in 2016”.

One of the great mistakes for the failure of the Google Ads campaign is a lack of proper research. To cope up with the latest market and stay above your competitors, you need to make a proper research.

Depending on your business whether it may be “Carpet Cleaning Business, HVAC Cleaning Business, Roofing Business, or other types, you may spend from $0.19 per click to $5.00 or more.

Many small businesses may think that having a low advertising budget might consume fast and pause displaying ads. Therefore, you need to decide on a specific budget for your business.

Moving further you might need to set a budget for your Google Ads campaigns.

How To Set Google Ads Budget?

The first step of the research is to calculate your budget. Google gives you full access to decide: How much you need to spend on Google Ads?

What should be your per day or monthly budget?

When to show Ads?

Where to show Ads?

As a small business owner, you might be anxious to know what your Google Ads Budget needs to be. Some small businesses on average spend about $500 to $3000 per month on Google Ads.

You may be aware of your keywords. Keywords play a major role in Google Ads. Prepare a sheet for the keywords relevant to your business and carry out research for its cost per click (CPC).

1. Keyword Cost Per Click Research

There are many online tools and browser extensions to determine the CPC for a specific keyword. You can try SEMrush, MozBar, Keywords Everywhere, and many other online tools.

Google Ads also provides a tool known as ‘Keyword Planner’. It is right under the ‘Tools & Settings’ section on Google Ads home page.Keyword Planner toolClicking on Keyword Planner, you will have two options to discover new keywords and get search volume and forecasts.Discover new keywords


If you aren’t aware of your keywords, you can use ‘discover new keywords’. Upon clicking on that, you will have options to start with keywords or start with your website.

Keywords Analysis using Keyword Planner

Entering your website or keyword will generate a report. You can change your desired location (targeting) on top of the page to gain specific search volume.Keyword Planner location change

Below that you can get keyword ideas and the CPC for that specific keyword. I have made a search for “carpet cleaning”. You can see the keyword ideas, search volume, the CPC for each keyword, and other metrics.Keyword Ideas in Keyword Planner ToolNow you need to sort out the keywords which you think will work great for your campaigns. Also, you are now aware of the Cost Per Click for your keywords.

2. Create a Spreadsheet Including:

  • Keywords
  • Search Volume per month
  • CPC

With this spreadsheet, you can now calculate the cost. There are some keywords to which your competitors are using. Carry out competitor research using an online tool SpyFu and try to incorporate those keywords into your campaign.

Determine the clicks and calls you want for each day and calculate the budget that you need to spend monthly. You can also get search volume and forecasts by entering your keywords in the Google Ads keyword planner.

Keyword planner results

As you can see above the search result for the keyword “carpet cleaning” that I had placed in the keyword planner. You need to set the number of conversions per month and you will get results accordingly. With 100 conversions need to spend $430 per month. Here you can get the cost that you need to spend monthly on your keywords for your Google Ads campaign.

Now, you are quite aware of your budget. Let’s see some factors that affect your Google Ads cost for small business.

Factors That Affect Your Google Ads Cost

Google Ads machine learning basically depends on keyword bids. Moreover, there are many other factors that influence your Google Ads cost. It may be due to keywords, negative keywords, market competition, ad placement, and quality score.

1. Keywords

Keywords play a major role in Google Ads. It helps to show your ad for relevant queries. Basically, there are three factors to keep in mind while selecting keywords. They are short and long-tail keywords, negative keywords, keywords match type.

a. Short & Long Tail Keywords

Generally, there are two ways to use keywords. One is the short-tail keywords and the other is the long-tail keywords. Short-tail keywords have high search volume and have high competition. Due to this, short-tail keywords have high CPC. Whereas long-tail keywords have low search volume and their CPC is also low.

b. Negative Keywords

Negative keywords help you save dollars for those unwanted clicks. It informs Google when you do not want to show your ad for those specific keywords. Those unnecessary keywords can harm the performance of your Ads. As a small business owner, you can not waste money on those unwanted clicks. Therefore adding negative keywords is very beneficial.

c. Keyword Match Type 

Keyword match type is of four types:

  • Broad Match: It is a default keyword match type. Ads may appear on search with synonyms, misspellings, related searches, and variations.
  • Broad Match Modifier: It is the same as a broad match, but ads may appear on searches that include plus sign (+) in search terms.
  • Phrase Match: It allows ads to appear on searches that match the phrase, or some additional words before or after that phrase.
  • Exact Match: It displays ads for searches that match the exact term or the keyword has a similar meaning.

2. Ad Placement

Ad placement is another factor that affects Google Ads cost and that’s important for small businesses. It provides options to show ads on network type, device type, and target locations.

a. Network

There are two types of networks: Google Search Network and Google Display Network. In Google Search network, your ads may appear only on the Google search result page. Whereas in Google Display Network, your ads may appear on Google search network and millions of Google partner websites including Gmail, Youtube, Blog, and many more sites. Choose the network where your customers search the most.

b. Device Type

Google Ads helps you show Ads on three device types: Mobile, Desktop and Tablet. Nowadays most of the search is carried out on mobile devices. Also, most and converting clicks come for mobile ads device types

c. Locations

Locations allow you to select the geographic location where you want to show your ads. You can increase conversions and clicks by choosing the exact location or the radius around that location where you provide services or products.Location Targeting

3. Ad Schedule

Ad scheduling is a method to set a specific time for ads to appear to probable customers. This is particularly beneficial for local small businesses that want to drive customers to their locations. And for those small businesses that provide services at customer’s locations. You can run your ads as per your business hours.

For example, if you run a carpet cleaning business, you can run your ads from 09:00 am to 06:00 pm as per your business hours, when you can take calls from your customers. Why do you want to waste money on shown ads while you are not available? Therefore ad schedule is also important when it comes to Google Ads cost for small businesses.

4. Market Competition

Market competition may also affect Google Ads cost. If you bid high for your ads, it does not mean that your ad will appear on top of the search result page. As there are many competitors bidding on the same keyword, the cost may also increase.

5. Quality Score

The quality score has a huge effect on Google Ads cost and ad placement. The quality score is determined by your keyword, click-through rate, landing page experience, and account performance. Based on this data, each keyword gets a quality score from 1 to 10.

a. Keyword:

The relevancy between your keyword your Ad copy and your landing page. It should match the purpose to which the user has searched.

b. Landing Page Experience:

Easy to understand the content and clear Call-To-Action that helps the user to take further action can be a great landing page experience. The searcher’s query and the landing page content should match.

c. Click-Through Rate:

The number of clicks divided by the number of Ad impressions is known as click-through rate. Higher CTR leads to high conversions.

d. Account Performance:

The overall performance of your Google Ads account can be beneficial for better search results.

Now you know the basics to set the budget and the factors that influence the Google Ads cost for small business. Let’s take a look at how the process works.

How does Google Ads work?

Google Ads basically works start with an ad auction. When a user enters a search query, Google checks for the query if it has the keyword to which advertisers are bidding. If the advertisers are bidding for the keywords in the search query, the ad auction begins.

The main purpose of the ad auction is to determine the Ad Rank. And the Ad Rank decides the ad placement. The Ad Rank formula is based on the CPC bid and the Quality Score.

Ad Rank = Maximum CPC Bid X Quality Score

Having a great quality score can lead to better Ad Rank. Even if your CPC bid is low but the quality score is high you can have high Ad Rank. Once the Ad Rank and the Quality Score are calculated, Google uses this data to determine what will be the price when someone clicks on one of your ads.

Google Ad auction price calculation table

From the above table, you can see that the first advertiser pays less due to a higher Quality Score. Better the Quality Score lowest the CPC.

Why Should You Advertise On Google Ads?

Google Ads cost varies from business to business and depends on the platform, competitors, strategies and also offers various advantages. If you are new to Google Ads and willing to invest, then here are some reasons:

  1. Google’s vast network: Google Ads can help you reach about 90% of internet users.
  2. Manage Campaigns anytime: Google Ads gives you full access to customize your campaigns anytime as per your need.
  3. Budget control: With Google Ads, you can run ads with no minimum budget requirement. You can run a campaign on a $5 per day budget.
  4. Flexible marketing platform: Google Ads is suitable for all types and sizes of businesses. Even small businesses can invest in Google Ads.
  5. Faster Results: New businesses and websites can take time to see results with SEO. Whereas Google Ads can provide faster results.
  6. Build brand awareness: Google Ads can help businesses to build brand recognition in a short time.
  7. Easily Measurable: Google Ads provides all the metrics that you need to measure your success. It provides you all data that helps you to stay ahead.

The Bottom Line

Is Google Ads right for your business?

Now you know how much does Google Ads cost for small business, how to set budget, factors that affect the cost and working of Google Ads. There is no one size fits all here. You have to decide how much you want to invest in Google Ads.

If you are still not sure how much to spend on Google Ads, then start with a small budget. After two to four weeks you might come to know how much you actually need to spend.

Meanwhile, you can carry out research on ‘Keyword Planner’. Here you can get an overview of your budget. Above all, there is no sure way to calculate the exact money you need for your budget.

To gain a quick online recognition, Google Ads is the best option for any business. Using Google Ads small businesses can increase their sales and can get leads, which they cannot get from any other advertising platforms. In fact, you can advertise with any budget. After trying for a few weeks, you can decide to change your budget to meet the return on investment (ROI).

In the end, you have to decide whether to invest in Google Ads or Not and how much to invest.

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