Why Is Google AdWords So Expensive? 6 Reasons & How To Fix

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As an online business owner or marketer, you may have experienced the high costs of running a Google AdWords campaign

It’s not uncommon to hear complaints about how expensive Google AdWords can be, leaving many businesses wondering if it’s worth the investment.

In this article, we’ll explore some of the reasons why Google AdWords can be expensive and offer some solutions to help you maximize your budget.

The pay-per-click (PPC) model

One of the main reasons why Google AdWords can be expensive is the pay-per-click (PPC) model.

Why Is Google AdWords So Expensive

This means that advertisers only pay when someone clicks on their ad, which may sound like a good deal, but the cost per click (CPC) can quickly add up.

The CPC is determined by the competition for the keywords you want to target, with highly competitive keywords costing more per click. 

For example, if you’re targeting keywords like “insurance” or “lawyer,” you can expect to pay a high CPC.

Another factor that affects the CPC is the quality score of your ad. Google evaluates the relevance and usefulness of your ad to ensure that it provides a good user experience. 

Ads with a high-quality score are rewarded with a lower CPC, while ads with a low-quality score will have to pay more per click.

How to fix:

To minimize the impact of the PPC model on your budget, you need to optimize your ad campaigns. Start by finding a PPC service provider with experience in optimizing campaigns

They can help you identify the best keywords to target, write effective ad copy, and adjust your bids to maximize your budget. Another way to improve your quality score is to create highly relevant ads that match the user’s search intent.

Make sure your ad copy and landing pages are optimized for your target audience and include a clear call-to-action. You can also experiment with different ad formats, such as video or display ads, to see what works best for your business.

The ad auction system

Another factor that affects the cost of Google AdWords is the ad auction system. Google uses a complex algorithm to determine which ads are displayed for each search query and in what order.

Advertisers bid on keywords they want to target, and Google uses these bids, along with the quality score, to determine the ad rank.

The ad rank determines the position of your ad on the search results page, with higher-ranking ads appearing at the top.

The higher your ad rank, the more likely your ad is to be clicked on, which can lead to a higher conversion rate. However, to achieve a high ad rank, you may need to bid more than your competitors, which can increase the cost of your ads.

How to fix:

To optimize your ad campaign for the ad auction system, you need to focus on improving your quality score and ad relevance

This will not only help you achieve a higher ad rank but also lower your CPC. You can also experiment with different bidding strategies, such as manual bidding or automated bidding, to find the best approach for your business.

Another way to reduce the impact of the ad auction system on your budget is to focus on other advertising channels.

For example, you can use social media advertising, email marketing, or content marketing to reach your target audience

These channels may not have the same reach as Google AdWords, but they can be more cost-effective and provide better long-term results.

Ad scheduling

Ad scheduling is another important factor that can affect the cost of Google AdWords.

Ad scheduling

By default, Google AdWords will show your ads 24/7, which means you’re paying for clicks even when your target audience is not actively searching for your products or services. This can quickly deplete your budget and result in lower ROI.

How to fix:

To reduce the impact of ad scheduling on your budget, consider setting up ad scheduling to show your ads only during peak hours when your target audience is most likely to be searching for your products or services. 

For example, if you’re running a local restaurant, you may want to show your ads during lunch and dinner hours, rather than overnight when your target audience is unlikely to be searching for your services. 

This can help you maximize your budget and increase your ROI.

Ad copy and landing pages

The effectiveness of your Google Ads ad copy and landing pages can also impact the cost of Google AdWords.

If your ad copy and landing pages are not highly relevant to the user’s search intent, you’re likely to experience lower click-through rates, lower quality scores, and higher CPCs. 

This is because Google rewards advertisers who provide a highly relevant and seamless user experience. In other words, this means that in order to achieve a lower CPC, you need to make sure your ad copy and landing pages are optimized for your target audience.

How to fix:

To optimize your ad copy and landing pages, focus on creating highly relevant and compelling ad copy that accurately reflects the user’s search intent.

This means using specific keywords in your headlines and ad copy, highlighting your unique selling points, and providing clear calls to action

Additionally, make sure your landing pages provide a seamless user experience by aligning with the user’s search intent, providing a clear value proposition, and having a clear and easy-to-use layout.

Competition in your industry

Another factor that affects the cost of Google AdWords is the level of competition in your industry. If you’re in a highly competitive industry, such as finance or real estate, you can expect to pay a premium for your keywords.

Competition in your industry

This is because many businesses are bidding on the same keywords, driving up the cost per click. The more competitors you have, the higher your bid needs to be to secure a high ad rank. 

On the other hand, if you are in a less competitive industry, such as pet grooming or home decorating, you may be able to get away with bidding lower.

How to fix:

If you’re in a highly competitive industry, there isn’t much you can do to reduce the cost of your ads.

However, you can still find some ways. To reduce the impact of competition on your ad campaign, you need to focus on finding niche keywords that are less competitive

For example, instead of targeting broad keywords like “real estate,” focus on more specific keywords like “luxury apartments in Manhattan.” This will not only reduce your competition but also increase the relevance of your ad to the user’s search intent.

You can also use geo-targeting to narrow down your audience and focus on specific regions where your target audience is located. This will help you reduce the number of competitors you’re bidding against and increase the chances of your ad being clicked on. 

For example, if you’re a local restaurant, you can target users in your city or town instead of targeting all users in the state.

Lastly, it’s important to remember that competition is unavoidable in some industries so it’s important to focus on optimizing your ad campaigns for maximum efficiency.

Seasonal demand

Seasonal demand can also affect the cost of Google AdWords. If you’re in an industry that experiences high demand during certain times of the year, such as holiday shopping or tax season, you can expect to pay a higher CPC.

Seasonal demand

This is because many businesses are competing for the same keywords, driving up the cost per click.

How to fix:

To optimize your ad campaign for seasonal demand, you need to plan ahead and adjust your budget accordingly. Start by analyzing your historical data to identify peak periods and adjust your bid strategy accordingly

You can also experiment with different ad formats, such as video or display ads, to stand out from the competition.

In addition, you can also focus on other advertising channels during slow periods. For example, you can use social media advertising or email marketing to reach your target audience during off-peak periods.

Google AdWords can be a powerful tool for businesses looking to reach a wider audience and generate more leads.

However, the cost of Google AdWords can be a significant challenge, especially for small businesses with limited budgets.

To make the most of your Google AdWords campaigns and reduce costs, it’s important to understand the factors that impact the cost of your ads and optimize your campaign accordingly

By following the solutions outlined in this article, such as researching relevant keywords with low competition, creating highly relevant ads and landing pages, improving your quality score, and adjusting your ad scheduling, you can maximize your budget and achieve better results.

Additionally, staying up-to-date with changes in the advertising landscape, such as new ad formats or updates to Google’s algorithm, can help you stay ahead of the competition and optimize your campaigns for success.

Conclusion

Remember, optimizing your Google AdWords campaign is an ongoing process. It requires continuous monitoring, testing, and adjustment to ensure that you’re getting the most out of your advertising dollars.

By taking a data-driven approach and experimenting with different strategies and tactics, you can minimize the impact of high ad costs on your budget and achieve better results with your Google AdWords campaigns.

About the author 

Peter Keszegh

Most people write this part in the third person but I won't. You're at the right place if you want to start or grow your online business. When I'm not busy scaling up my own or other people' businesses, you'll find me trying out new things and discovering new places. Connect with me on Facebook, just let me know how I can help.

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