Nowadays, the Internet is more accessible than ever. More and more people are getting online on a daily basis. In fact, around 92% of all adults in the UK were recent Internet users in 2020. Of course, the pandemic did play a major part in this number; however, that does not change the fact that most people in the UK go online at least once a day.
So, perhaps it should come as no surprise that digital marketing grew alongside the growing numbers of users staying at home. Indeed, 72% of marketing spending in the UK in 2020 went towards digital marketing. Now, there are many platforms that businesses can rely on to market their brands online. There is Facebook, LinkedIn, Quora, Instagram, and more. But our focus today is going to be on Google Ads, formerly known as Google AdWords. Google Ads is one of the more prominent platforms out of the bunch.
This article will primarily focus on the cost of Google Ads in the UK by explaining what Google Ads is in the first place, the many factors that go into determining the cost of advertising on Google’s network, and more. Keep on reading for more.
What is Google Ads?
Google also offers a type of advertisement known as Display Ads, which are shown on the Google Display Network. The GDN refers to a huge collection of third-party websites which have partnered with Google to display ads on different pages of their websites. You can display anything from text to images, videos, or GIFs. And similar to other means of digital marketing, you have to target a specific audience based on a number of different criteria.
How do Google Ads work?
Most people think that in the case of Google Ads, the more money you are willing to throw away at ads, the more online presence you will end up having through them. And while having a sizeable ad budget isn’t necessarily a bad thing, Google Ads is actually fairer than most people think.
When someone goes on google.com and types in a bunch of words to look something up, Google looks into their search query to check whether it contains any keywords that digital advertisers are currently bidding on or not. If that is the case, then the ad auction begins.
Once that’s done, Google will then determine each ad’s Ad Rank. This refers to where exactly your ad will be placed in the paid results section of a search query. In case you are wondering, Ad Rank is determined by the maximum amount multiplied by your Quality Score. And down the rabbit hole, we go!
What is Quality Score?
Quality Score refers to Google’s rating of both the quality and relevance of your ads as well as keywords. The score is measured on a scale from 1 to 10. A higher Quality Score basically translates to you having an ad and a landing page that are more relevant to the user who just googled something in comparison with other advertisers.
According to a blog post made by Google themselves, your Quality Score is the result of combining three components:
- (Expected) Clickthrough Rate (CTR): The likelihood that your ad will be clicked.
- Relevance of your Ad: How close is your ad text to the items being searched by a user.
- Landing Page Experience: How relevant is the information found on your landing page to the people who click on your ad.
Each of these components is designated a status of “below average”, “average”, or “above average” by Google. Conveniently so, this evaluation is mainly based on a comparison with other advertisers currently competing for the same keyword(s). No one outside of Google really knows how much each factor “weighs in” the calculation of the Quality Score.
Fortunately for you, Google lets you check your Quality Score in order to determine if certain elements of your advertising experience aren’t working well. For example, you can get a low-quality score due to having a below-average landing page experience, which (surprise! surprise!) means that you should work on making your landing page more functional and more relevant to the keyword(s).
Now, back to the topic of the Google Ads auction. Once Google has successfully determined your Quality score, it will then determine your Ad Rank and, finally, the cost.
So, how much do Google Ads cost UK wide?
As we have just mentioned above, the first thing that Google will try to determine is your Ad Rank.
Ad Rank = Quality Score (1-10) x Maximum CPC Bid
Then they will proceed to figure out how much you will need to pay:
Cost = Ad Rank of the person below you (in the auction) / Quality Score + £0.01
So, let us say, for example, that your Quality Score is 7, which is above average, and the next bidder’s Ad Rank is 14. The formula will be as follows:
(14/7) + £0.01 = £2.01
Now, it is purely coincidental that our example is so close to the actual average CPC of Google Ads in the UK, which is £1.95, according to WordStream. This number is exclusive to the Google Search Network. In case you are wondering about the average CPCs on the display network and Google Shopping campaigns, they are £0.48 and £0.54, respectively.
Additional Google Ads cost UK factors
There are many other factors that can influence the cost of Google ads, including:
The industry within which you operate heavily influences the price of Google Ads. For instance, the business services industry (accounting, real estate, legal, etc.) happens to be one of the most competitive industries on the web. That conveniently translates to a higher cost per click (CPC).
In other words, it’s only natural for a CPC to cost more than £50 in an industry where a potential client might bring in anywhere from 1 to 10 thousand pounds.
On the other hand, we have businesses that operate within the niche of arts, for example, which have much lower CPCs. These businesses, unlike our example of the professional services industry, need way more clients to hit that £1k mark.
The Internet is an ever-changing place, fuelled by avid consumerism and people’s longing for belonging. So, it should come as no surprise that the prices of Google Ads are heavily influenced by things that are “trendy”. For example, businesses that belong to the accommodation and food services sector, such as restaurants, pubs, cafes, heavily suffered from Covid-19. They experienced a major decline in the number of people coming in. That, in turn, led to a significant decrease in competition on the ad placements on Google. This consequently led to the average CPC dropping more than ever.
Tips for Reducing Google Ads Cost UK
Taking our average cost of £1.95 into account, let us assume that you get around 5000 clicks on your ad per month. This means that your monthly ad spend will amount to over £10,000. And while some businesses will gladly spend that amount or even more on an advertising campaign, some simply cannot afford to.
If you belong to the latter group, or you are just a business owner who is well-off but would gladly spend less, then this short list of tips and tricks to decrease your Google Ads spend will definitely be of help.
You are probably sitting in your room thinking, “Duh”. Lowering your bids is indeed the most basic and straightforward way to lower the average CPC of your campaign.
This is a good strategy if you are already performing well, but your budget is running low. Yes, your ad position might drop a bit. On the bright side, you most likely will still get clicks and potential leads in your newly downgraded position as well.
Use long-tail keywords
If you operate within an industry that is highly competitive, chances are the average CPC for some keywords would be expensive. For example, the keyword “casino” has an average cost of around £58, and no, that’s not a typo.
If this is your case, one way of avoiding high-cost keywords is using long-tail keywords instead. They are usually a lot less competitive than their regular counterparts due to the smaller number of searches per month attached to them. The bright side to this is the fact that they usually have a higher conversion rate than “head” keywords.
So, for example, instead of going for “gaming”, you can opt for “is gaming good for your mental health?”. The people over at Ahrefs have a great blog post on this; you should definitely check it out.
Use negative keywords
Google Ads has a great feature known as negative keywords. This allows you to flag keywords that you don’t want to show for. This will make sure that your ads don’t show up in unrelated search queries, preventing irrelevant clicks in the process. This has proven to improve both your click-through rate (CTR) and quality score in the long run.
Google allows you to limit your campaigns to only show to people in a certain area. This will greatly reduce irrelevant clicks and drive in more local clicks. That, in turn, will reduce your ad spend as a whole.
You don’t have to do it alone
Google Ads can be hard to get right, but you don’t have to deal with it alone. Our team of paid advertising experts is always ready to chime in and help. Don’t hesitate to book a free discovery call if you need help.