If you’ve ever used Google AdWords, you’ll know that things can get quickly get expensive if you don’t have tight control of your budget. AdWords is driven by a bidding system, in which rival companies compete for the best ad positions by increasing the amount they are willing to pay each time someone clicks on their ad. This leads to a market-driven pricing model, where the cost of an advert is, in theory, proportional to the amount of profit you can make from anyone who clicks on it. If AdWords generates sales leads worth thousands of pounds over time, then you’ll pay more per click than if you’re promoting goods/services with a narrow profit margin.
Typically, most of the clients we deal with have average cost-per-clicks ranging between £0.20 and £10, though there are exceptions. Business services generally have the highest cost per click, and small retail items tend to have the lowest.
Take a look at the top 10 Google Adwords in the UK as of March 2017:
- Business electricity tariff £105.75
- Health insurance £111.04
- best email marketing service for small business £117.84
- Top cloud service providers £118.37
- Injury compensation claims £118.95
- Speadbetting offers £131.66
- Monitoring servers £133.24
- Demo trade £136.34
- Live roulette £143.03
- Binary options broker review £149.86
These keywords show just how much profit can be generated from their target audience. If you take into account that only a certain proportion of people click the ads will end up becoming paying customers, you could soon start racking up costs of £1,000+ just to bring in one customer – the advertiser will want to get this investment back at some stage, so you can get a good idea of just how profitable the industries above must be.
Fortunately, most AdWords accounts don’t need to spend anything like this amount of money, and Google AdWords can be a surprisingly cost-effect way to bring in sales. For more information on AdWords, please contact us or check out our Google AdWords page for more information.