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Google AdWords is based on an auction system that rewards businesses who have high-quality ad campaigns with lower costs and better ad placement. The average small business using AdWords spends between $9,000 and $10,000 per month on their Google paid search campaigns.
Before we dive into the figures and start talking cost, it’s vital that you know how the AdWords platform actually works. The ad auction begins when a user enters a search query, after which Google determines whether the query contains keywords that advertisers are currently bidding on.
Note: We won’t go into the specifics of the Quality Score formula in this post, but if you want to learn more about how Google determines the Quality Score of your ads, we’ve written extensively on the topic. A common scenario that many newcomers to paid search find themselves in is when their advertising budget gets spent much more quickly than they anticipated.
In some ways, you can think of PPC advertising roughly along the same lines as traditional print advertising; you’d expect to spend more on a glossy full-page ad in a national magazine than you would for a classified ad in a local newspaper. Listed below are the most expensive keyword categories in Google AdWords, and the average cost-per-click of each.
Of course, these are just some of the hundreds of thousands of keywords that businesses all over the world are bidding on, and costs can vary widely depending on a wide range of factors. Usually, once someone has asked about the average cost-per-click of a PPC ad, their next question will be how much do “typical” businesses spend.

However, Erin told me that the average WordStream client (mostly small and medium-sized businesses) spends $9,813 per month on PPC advertising. Your ad budget will always be the largest, most direct cost associated with your PPC campaigns. As I’ve stated throughout, there are numerous factors that can have a significant impact on the cost of running a PPC campaign, but remember: almost any type of business can make AdWords work for them! After all, those new to PPC are probably most interested in how much they’ll be expected to shell out to advertise on Google, and whether they can even afford it! Once your Quality Score and Ad Rank have been calculated, Google uses this data to determine how much you’ll pay each time someone clicks on one of your ads.
Although your ads will still have to go through the ad auction process, you can tell Google when you want your ads to be displayed. Let’s take a look at some of the most expensive keywords in AdWords and Bing to give you an idea of how much a click can cost if you've got deep pockets. Even if you’re in an industry with high average costs-per-click, such as insurance or legal services, it doesn’t necessarily mean you’ll be forced to pay these amounts for each click on your ad.
Individual companies in these industries often spend $40 to $50 million a year on Google AdWords.
This means that if you want to use software to manage and automate the legwork in your AdWords account, you’ll need to factor in subscription costs.

But I do think many business owners make the mistake of looking at AdWords from a cost-accounting perspective – I’ll admit I once did. For example, a campaign advertising your best-selling product may be more important to your business than another campaign promoting content to prospective customers at the top of the funnel. You may even want to devote more money to traffic coming from specific types of mobile device, depending on what you’re advertising or your ad copy. The remaining $14 billion that makes up Google's ad revenue comes from a number of smaller businesses with smaller budgets. There are other potential costs you may have to consider, depending on your business, marketing goals, and individual situation.
However, if you’re pushed for time or aren’t sure what you’re doing (or both), investing in PPC management software is a great way to save time, reduce costly mistakes, and get on with actually running your business.
It doesn’t go into the nitty gritty of how much AdWords costs or how much you should spend, specifically, but it does a great job of explaining how to realize and calculate your actual ROI from a business perspective.

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