Key takeaways
- You set the budget. Each campaign has an average daily budget, and you can change it at any time.
- On a given day a campaign can spend up to 2 times its average daily budget, but Google says you will not be charged more than 30.4 times that daily budget in a month. At $10 a day, that is a $304 monthly maximum.
- With cost-per-click bidding you pay when someone clicks. You often pay less than your maximum bid, because you only pay what it takes to hold your position.
- Better ads and landing pages can lower what you pay. Google says higher quality ads can often lead to lower costs per click.
- Plan for costs on top of ad spend: management, landing pages, tracking, and your team’s time following up leads.
The short answer
Google Ads costs what you decide to spend. You set an average daily budget for each campaign, and Google uses it as a spending limit. What you get for that budget depends on what each click costs, which is set in an auction every time someone searches.
That is why no honest guide can give one price for Google Ads. The cost per click changes with your industry, your location, your competitors and the quality of your ads. What you can control is the budget, the targeting and the quality of what people land on.
How daily budgets work
Google’s help page on average daily budgets explains that spend varies from day to day. Some days a campaign spends less than its budget, and other days it spends more. Two limits keep this in check:
- Daily: for most campaigns, spend on any one day can reach up to two times the average daily budget.
- Monthly: for most campaigns, you are not charged more than 30.4 times the average daily budget in a month. 30.4 is the average number of days in a month.
Google’s own example: an average daily budget of $10 gives a monthly maximum of $304, with no more than $20 spent on any single day. If ads run so often that costs pass the monthly limit, Google applies an overdelivery credit, so you are charged only up to the limit (Manage your spend in Google Ads).
To set a monthly budget, divide it by 30.4. A $3,040 monthly budget is a $100 average daily budget.
What you pay per click
Most search campaigns charge per click. Your maximum cost per click is the most you are willing to pay for one click. Google explains in Choose your bid and budget that you often pay less than that maximum, because you only pay what is needed to keep your ad’s position and any extra formats shown, such as sitelinks.
You can set bids yourself with manual bidding, or let Google set them with automated strategies such as Maximize Clicks, which aims to get the most clicks within your daily budget.
Why some businesses pay less per click
Where your ad shows, and whether it shows at all, comes from its Ad Rank. Google lists the factors in its Ad Rank page: your bid, the quality of your ad and landing page, minimum thresholds, how competitive the auction is, the context of the search (including location and device), and the expected impact of extras such as sitelinks.
Google says higher quality ads can often lead to lower costs per click. In practice, an ad that matches the search closely and sends people to a fast, relevant page can win a better position for less money than a weak ad with a higher bid.
Quality Score, the 1 to 10 rating you see on each keyword, is how Google summarizes this. It looks at three things: expected clickthrough rate, ad relevance and landing page experience. Google is clear that Quality Score is a diagnostic tool and is not an input in the auction itself. Use it to find weak ads and pages.
What drives the cost up
- Competition: more advertisers bidding on the same searches in your area.
- Broad targeting: showing ads for searches that will never turn into customers.
- Weak landing pages: slow, generic pages hurt quality and conversion. Our guide to Core Web Vitals covers speed.
- No negative keywords: paying for clicks from people looking for jobs, free options or something else entirely.
- No tracking: without conversion tracking, nobody knows which searches bring leads, so budget keeps going to the ones that do not.
The costs on top of ad spend
Ad spend goes to Google. Most businesses also pay for:
- Management: an agency or in-house time for keywords, bids, ad tests and reporting.
- Landing pages: pages built to match each campaign.
- Tracking: conversion tracking and call tracking so each lead is tied back to a search.
- Follow-up: your team’s time answering calls and forms quickly.
Our guide to marketing agency costs in Toronto explains how management fees are usually priced.
How to set a starting budget
- Work out what a new customer is worth to you over a year.
- Decide what you can afford to pay to win one.
- Pick a small set of high-intent searches, the ones people use when they are ready to buy.
- Set a budget that can buy enough clicks on those searches to learn what converts, then review the search terms and leads every week.
Our free marketing budget calculator helps you run the numbers.
Check your bill
Google separates served cost, the value of all clicks or impressions, from billed cost, what you owe after adjustments such as overdelivery and invalid activity. Both show in your account, so you can check what you were charged against your budget.
Where to get help
We run Google Ads for service businesses as part of our paid media work in Toronto, and as a Google Ads agency in Miami. We do not mark up ad spend, and our pricing is published.