PPC Cost Breakdown: How Much Does Paid Advertising Cost?

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The cost of paid search, or pay-per-click (PPC), advertising depends on several factors and your goals. Businesses as big as Apple and small as your local bakery likely invest a fair share of their annual marketing budget on paid advertising.

Cost, platform, budget and your return on ad spend vary by size, industry market and even the time of day.

How Much Does It Cost to Advertise Online?

It varies – a lot. It might be the most annoying answer possible, but it’s the most honest. The cost of a PPC campaign is typically based on the average CPC (cost per click) on Google Ads, Bing or social platforms like Facebook. Remember that CPC can vary wildly based on the keywords you’re targeting, competition from industry rivals and seasonal shifts. You’ll need dedicated eyes on all your platforms to keep Google Ads costs optimized.

Google Ad Costs – Averages and Variables

The average CPC on Google AdWords ranges between $2 and $4 for search. The most expensive industry for CPC is legal services, with an average cost per click of over $8. Home improvement advertising is also consistently higher than other industries, averaging over $6.

Industries with longer sales cycles and higher service costs require a larger budget. You’ll get more out of every click with an experienced paid media team

Do Google Ads Work?

Google ads has been one of the most cost-effective digital marketing strategies for decades. Even accounting for a paid media management fee, Google Ads costs far less than businesses benefit in revenue and brand awareness.

Market share – Google search owns around 85% of the search market, which means the majority of internet users start their journey with Google.

User intent – Targeting the right keywords ensures quality clicks among qualified users. Unlike a roadside billboard or an ad in your local paper, Google Ads are only served to users actively seeking information about a specific product or service. Those users click on ads, too; Google Ads results receive 65% of clicks on the search results page, compared to 35% of organic results.

Spend management – As your priorities and goals change, so will your budget. Google Ads allows plenty of flexibility to adjust ad spending based on specific keywords, location and scheduling to optimize your paid media budget and ROI.

Related: Paid Media and PPC FAQs

The Cost of Paid Ads on Social Media

Google dominates search and display advertising, but the paid social media environment is much less consolidated. Massive players like Meta (that’s Facebook and Instagram), Twitter and Pinterest are facing increased competition from TikTok and other smaller platforms on the rise.

Social Media Costs – What’s Good?

Social media advertising is based on two metrics – CPC, which makes it easy to compare performance to Google, and CPM. CPM stands for cost per mille, which is the cost of 1,000 impressions. CPM is typically more of an awareness play because it measures how many users saw your ad, regardless whether they took any action or not.

Facebook Ad Costs

The average CPC on Facebook is $0.44, with an average CPM of $14.40. That makes it one of the most affordable and cost-effective social media platforms for advertisers and why it’s the go-to social media channel for most brands.

Instagram Ad Costs

 Instagram has fewer users than its big brother, Facebook, but Meta has a gold mine in Instagram’s steady paid revenue. While there is plenty of demographic overlap, Instagram tends to have a slightly younger audience and a host of features that influence how users behave on the platform. Instagram doesn’t offer a specific average, but it does report that the average CPC is between $0.20 and $2, with a CPM of $6.70.

TikTok Ad Costs

TikTok’s ad revenue has exploded since 2020, jumping 139.9% YoY in 2022 and a forecasted increase of 36% in 2023. That’s more than double the revenue growth of the second place, LinkedIn, which is expected to tack on an extra 16.3% in 2023. While TikTok holds just 2.3% of social media’s total ad spend, that could double by 2027 and exceed $36 billion.

That will largely depend on its competitive pricing. TikTok reports an average CPC of $1 and an average of $10 CPM, although it’s slightly less flexible than other platforms. The ‘Tok is the only major social media platform to require a minimum budget of at least $50 per day and $50 per campaign. Ad groups on the platform must be at least $20. For large companies, that’s no sweat. For small businesses, that spending level may be cost-prohibitive.

The Perfect Paid Media Mix

Running an effective paid media campaign on search or social requires a strong plan and real-time adjustments. Work with a dedicated team of paid experts who can optimize, prioritize and maximize your investment in paid media. We can help; get in touch or call (231) 922-9977 today to get rolling!

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