PPC Pricing – What Does PPC Cost in 2024?
Editor’s Note: This post was originally published in March of 2020 and has been updated for accuracy and comprehensiveness.
We all know how vital search engine optimization (SEO) is to modern marketing.
Ascending the organic ranks is imperative to your success. But it also takes time. Often, it can take six months to a year – or even more – to see a return on your investment.
Luckily, a more immediate option can work on its own or alongside SEO — pay-per-click advertising. PPC fits into broader digital marketing strategies, providing a quick way to drive traffic and conversions.
With PPC, you can get instant results, i.e., drive profitable conversions that impact the bottom line fast.
But how much does it cost? What is a ‘reasonable’ budget for an effective PPC campaign?
In this article, we will cover PPC pricing, the factors influencing PPC costs, and how to find the right PPC agency for your business.
But before we delve into the vitals, let’s cover some basics.
What’s PPC?
PPC advertising is what it sounds like.
It is a form of advertising in which you pay per ‘click’ that you receive. There are many types of PPC ads, but most campaigns run through Google Ads. As a result, this article will be focused on Google PPC ads.
How does it work?
PPC ads on search engines like Google, Bing, and DuckDuckGo are usually listed before organic results on the search results. See example below:
Sometimes, ads can be listed in between organic search results or even below:
All you need to do is choose the keywords you want and set a maximum bid for how much you will pay per click. Then, the highest bid with the best ad appears at the top of the results.
Competitive keywords, which are mostly short-tail keywords, cost more. On the flip side, long tail, less competitive keywords cost less. However, several other factors still influence how much you pay per click.
Let’s talk about that in detail.
Curious about PPC costs? Let our experts help you maximize your investment with a tailored strategy. Request a proposal today and see how we can optimize your PPC spend for better results.
How does PPC placement work?
In the preceding section, I shared how keyword difficulty influences ad placement. But that’s not the only deciding factor.
Google also assigns every listing with a Quality Score (QS) – a metric used to measure your ad’s relevance to your chosen keyword, the click-through rate of the ad, and the quality of the landing page the ad points to. It is measured from 1 – 10, and the higher your quality score, the lower CPC you may receive in Google ads auctions.
Ad rank is another predetermining factor of your ads’ CPC. It is calculated by multiplying your quality score (QS) by your maximum bid – the highest amount you’ll pay per click for your ad.
PPC management cost can vary significantly based on campaign complexity and industry benchmarks, with different pricing structures for freelancers and agencies.
For example:
A $5 maximum bid with a QS of 10 gives you an Ad rank of 50.
Ads with the highest ad rank get the highest placement on the search results. See the illustration below:
How much do you pay if you win the auction and your ad gets listed on the search results?
Google uses a straightforward calculation to determine your cost per click. The ad rank value below yours is divided by your quality score (QS), then multiplied by one cent.
If you have a high-quality score, you can pay less per click and still get featured above all other ads on the search results. Let me explain using the illustration cited above.
The first advertiser (YOU) featured in position one has the highest QS OF 24. The CPC for this position is $3. The second result (PPC agency) with a QS of 20 pays $4 per click.
As you can see, the higher the quality score, the less you pay per click on your ad, and vice versa.
The best way to get a better QS (and save money on ad spend) is by working with a dedicated agency because they have the experience and expertise to increase CTR and attract the right lead.
How’s your PPC budget spent?
Budgeting is complicated. Companies spend varying amounts on PPC management, with some allocating between a few hundred dollars up to $20,000 per month, depending on their goals and industry standards.
This explains why you need the guidance of a PPC consultant or agency that can manage your campaigns and ensure you’re getting the best bang for your PPC buck.
When using Google Ads, campaigns allow you to control the daily budget. That means you can prioritize specific campaigns and assign them more ad spend. It’ll enable you to feed some of your stronger-performing campaigns while removing advertisements that point to products or services that may not be your current focus.
It’s always a good idea to break the monthly budget into daily budgets for every campaign you run.
For example,
A campaign of $0.75 per click that wants to generate 1,000 clicks per day would have a daily limit of $750.
Remember, you’ll never pay more than the maximum bid for a click, but you might pay far less based on your competitors.
How much should you pay for PPC in 2024?
It depends.
If you decide to work with an agency, expect to pay more (management fees, for instance) than running ads yourself. However, you have a better chance of featuring first and getting the most for your ad spend.
If you eventually decide to work with a PPC expert, you first have to determine the scope of your campaigns. Are you aiming for a basic, moderate, or aggressive PPC campaign? Obviously, the complexity of the tasks influences the overall costs of your campaigns.
Also, additional services, such as landing page creation, conversion tracking setup, ad design, etc., can increase agency fees. Ensure you get a full scope of the services offered before investing.
The pricing model is another factor you need to consider before choosing an agency. Is it worth paying for SEO services compared to PPC? SEO can offer long-term benefits such as increased traffic, leads, and conversions, making it a valuable investment. However, it’s crucial to partner with a reputable SEO provider to ensure a good return on investment.
A PPC agency pricing model typically includes a one-time, flat fee for the setup work. You’ll also pay a monthly premium on top of your ad spend to manage your campaign.
What does a basic PPC campaign cost?
Basic PPC packages should cover an ad spend of up to $2,500 and include up to 400 keywords in the campaign. It is crucial to choose a reputable service provider to manage your PPC campaigns, as they aim to deliver a return on investment and ensure client satisfaction.
When running a basic PPC plan, you’re targeting the Google channel only. You should run Google text and banner ads and remarketing — a strategy that involves showing your ads to past visitors.
It’s also a good idea to run display ads on the Google network, as these will be featured on industry-relevant websites.
You could also run YouTube video ads under a basic plan. However, you would have to make the video in-house — that’s not typically a service offered with basic campaign management.
What does something like this cost?
Most agencies will charge a one-time setup cost of around $1,000 to get started on a basic plan. After that, the monthly management costs will be about $400–$430.
What do you get for that money?
Basic PPC management services include:
- Competitor analysis
The agency will take a long, hard look at the level of competition you’re dealing with.
Not only will it examine the actual competitors themselves but also what they’re doing as far as PPC marketing is concerned.
The point is to understand what’s working and how to mirror it into your own strategy. No, this doesn’t mean creating a duplicate PPC campaign. Your focus should be outperforming your competition to generate better, more effective results.
- Campaign development and strategy
PPC needs a strategy. Your PPC firm will come up with a strategic plan to increase your brand reach among your target audience. This should be the first thing to be discussed.
This mostly has to do with audience targeting because it is the top strategy used to optimize PPC ads. Your PPC service will work out the best times to run ads, where they should feature, and which audience segments should see them.
Why is this important? Let’s use one of our clients as a case study.
Allure Bridals is an award-winning bridal manufacturer with over 100 retailers across the world. Their challenge? To get more customers and boost reach via paid search.
Our first step was examining their previous campaigns to derive insights such as their current standing in the market, target demographics, and areas of improvement.
This helped inform our campaign strategy, and as a result, we generated over 25.36% in click-through rate after the campaign ended.
- Keyword research
Your PPC firm will figure out the highest-value keywords relevant to your brand and any negative keywords that can harm your campaign.
Once you know what keywords your audience is searching for, you can create a PPC campaign specifically aimed at them and their search habits. Your agency will also tone your ad budget up or down depending on the value of the keywords.
There are different SEO tools for finding keywords, for example, Google Keyword Planner, Moz, Ahrefs, SEMRush, etc. SEMRush has a PPC keyword research tool for finding, evaluating, and organizing keywords.
- Industry analysis
The agency needs to understand your industry inside and out to create an effective PPC campaign.
It needs to research not just your competition but also rising trends in the industry, particularly in understanding changes in consumer behavior. This enables them to adapt your PPC campaigns accordingly for better, effective results.
- Ad copywriting
Your ads need a compelling copy.
Even if you’re the number one result on the search network, you’re still competing with several other ads.
Your ad copy has to pull the user in and make them want to click on you over your competitors. PPC agencies know what it takes to create ads that convert.
Tip: When choosing a PPC agency for business, prioritize those specializing in your industry. For instance, if you own a law firm, focus on agencies experienced in running law-related campaigns. Specialized agencies offer distinct advantages over-generalized ones because they better understand your target audience. They also have the expertise to craft compelling ads tailored to your industry.
Even at HigherVisibility, we don’t cater to everybody. Our client base is explicitly defined:
This enables us to deliver optimal results for our clients and also snag several industry-leading awards:
- Performance testing
You have to know how you’re doing — both good and bad — during a PPC campaign.
The agency will continuously check on the progress of your ads to determine if they’re succeeding or failing. That’s the first step in course correction.
- Ongoing campaign development
The agency will stay on top of keyword trends to help you keep your campaign up-to-date.
This involves checking keywords, bids, and budgets, optimizing ad wording, and tweaking relevance.
Sometimes, the keywords you’re targeting lose some traction, and others rise to take their place. You have to know when that happens if you’re going to stay on top.
- Google Analytics integration:
Using Google Analytics is a great way to track the success of your ad campaign.
Google Ads can only tell you so much about the behavior of your target audience. Google Analytics will help give you a detailed picture of how your website visitors interact with your content, helping you shape your ads to meet those needs. Plus, it helps segment data, for instance, check audience demographics, devices, etc.
While Google Ads will provide you with reports, Google Analytics makes it easier to understand the relevance of those reports and how to use them to improve your campaigns.
The agency will integrate Analytics into your site and use it to measure your campaign success.
- Goal tracking
From the outset, talk with the agency about your specific goals. What are you hoping to accomplish in terms of new clients or profits through this campaign?
The agency will keep track of those goals, letting you know what has to be done to meet or exceed them.
- Strategic management of bids
Bid management is strategic and takes a lot of time and effort.
The bid management strategy that you choose will determine the type of engagement you get from your target audience. In fact, bid strategy testing is among the top 10 techniques for refining PPC ads.
The agency deals with this, working within your established budget to ensure you’re getting the most penetration possible.
- Analysis and reporting of results
You need to know how your campaign is doing. After all, it’s an investment. You should get results and see how.
The agency shouldn’t only provide you with reports every month. They should also take the time to break down this data and explain its relevance. Any good agency will include detailed analysis and reporting in its service deliverables. If your choice agency doesn’t, you should tick them off your list.
Why?
Well, if you can’t measure it, you can’t improve it.
At HigherVisibility, reporting and analytics is a core part of our PPC management services. We offer all our clients access to a 24/7 insite dashboard — a real-time platform to see how their budget is utilized. This transparent process helps them retain control of their PPC campaigns.
What does a moderate PPC campaign cost?
A moderate PPC campaign should have a monthly ad spend between $2,500–$12,000. It usually features up to 2,000 keywords in the campaign. The average SEO costs, on the other hand, can vary significantly: monthly SEO services typically range from $750 to $2,000, hourly rates from $80 to $200, and project-based pricing from $1,000 to $7,500.
A moderate campaign includes everything involved in a basic PPC campaign. It also comes with additional monitoring of clicks and conversions while checking for fraudulent activity simultaneously.
Here, the agency sets up and manages rule-based bidding, where the bid examines each keyword independently, rather than looking at how they might work together.
For a moderate PPC campaign, an agency will typically charge a setup fee in the first month of $1,750.
It would then be around 15% of the monthly ad spend, with a minimum of $500.
Tip: A moderate PPC campaign should have a monthly ad spend between $2,500–$12,000. It usually features up to 2,000 keywords in the campaign.
A moderate campaign includes everything involved in a basic PPC campaign. It also includes additional monitoring of clicks and conversions while simultaneously checking for fraudulent activity.
Here, the agency sets up and manages rule-based bidding, where the bid examines each keyword independently rather than looking at how they might work together.
For a moderate PPC campaign, an agency will charge a setup fee of $1750 in the first month. Then, it would be around 15% of the monthly ad spend, with a minimum of $500.
Tip: When you’re creating a more expanded campaign, it’s a good idea to run ads in both the Google and Bing Ads networks. While Google is a much more extensive network, it doesn’t hurt to cast a bigger net.
What does an aggressive PPC campaign cost?
An aggressive PPC campaign is generally considered a monthly spend of $12,00– $50,000. SEO cost per project can vary significantly based on factors such as project scope, requirements, and the experience of the service provider. Many businesses typically pay between $1000 to $5000 for a project, while more complex projects can exceed $10,000.
It can include up to 10,000 keywords and is conducted on both the Google AdWords and Bing Ads networks.
An aggressive PPC campaign involves everything included in the above levels but adds international management. That’s ideal for companies that do business outside the U.S.
This level should also include some form of landing page creation and conversion rate analysis as well.
An agency-managed campaign at this level should also include graphic design of visual content. You should include at least one set of banner ad designs for display and remarketing campaigns.
Something like this will cost $2,500 one-time setup fee. After that, you’re looking at a base monthly price of 12% of your monthly ad spend, with a minimum of $1,800.
How much does PPC retargeting cost?
Have you ever noticed that once you visit a website, you start to see ads for that brand popping up all over the place?
That’s not a coincidence. It’s retargeting at work.
Retargeting involves showing your ads to people who have visited your site and left without making a purchase.
When you dig down into the visitor metrics, most websites tend to have a high bounce rate, with 47% of visitors clicking off your site after a few seconds.
What’s more, even though shoppers tend to pile up their online carts, 60% of purchases are never completed.
Retargeting gives you a second chance to get in front of the customers who drop off to try and win them back. It’s equally a great way to lure back prospects who initially showed some interest in your company but didn’t convert for one reason or another.
Plus, since you’re targeting customers who have already shown an interest in your brand, this can help to reduce advertising costs by improving return on investment. Rather than trying to convince a brand-new prospect, these potential customers are already on their way to buying.
This is why 40% of marketers are looking to increase their retargeting budget to optimize the overall efficiency of their paid ad campaigns.
But how much of your budget should be allocated to retargeting?
The remarketing cost varies based on industry, much as we discussed earlier. If you have a ton of competition, you’ll pay a lot for every click. However, companies with light to moderate competition usually see between $0.66 – $1.23 per click.
Tip: All levels of PPC management services should include ad retargeting.
Curious about PPC costs? Let our experts help you maximize your investment with a tailored strategy. Request a proposal today and see how we can optimize your PPC spend for better results.
Conclusion
PPC is a great way to get your website out there using both the Google display and search networks.
By setting a reasonable bid budget and creating quality PPC ads, you’re more likely to succeed and gain more clicks.
That’s why it’s so important to entrust your PPC digital marketing to a skilled agency staffed with pay-per-click marketing professionals.Now that you know what average PPC pricing looks like, talk to HigherVisibility about managing your PPC campaigns today to increase the success of your paid advertising.
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