How much does a Perth Adwords Campaign really cost?
“How much will it cost”
For business owners it’s the ultimate question. Unfortunately in the world of Google Adwords it’s not always easy to find an answer. Week to week, day to day (even minute to minute) cost vary – A LOT.
What’s worse? Google (seemingly) has no set pricing structure, or outbound marketers – meaning no information and no direct way to contact them.
“…a poorly managed PPC campaign can cost more than it brings in.” – Chris Giarratana, Search Engine Journal
All these unknowns often leave businesses confused, irritated and even down-right frightened.
Google AdWords Calculator: How Much Revenue Can You Make?
But if you fall into this category, don’t worry – you’re not alone. It’s a pain-point we hear all too often at Summit Web. And that’s why our expert Pay Per Click Perth (PPC) team have put their heads together to provide you with a quick cheat sheet to help calculate how much your Adwords campaign will really cost.
But firstly, let’s start with a little Adwords pricing overview…
Google Adwords, the ultimate Pay-Per Click.
So here’s a statement you’re going to love: Adwords is completely free.
Yep. With all of its insight, reach and power to boost your businesses, Google Adwords is a completely free service to use.
Wait wait wait, before you crack open that celebratory bottle of Mumm, it’s important to understand how this is actually possible.
“They average that people make $2 for every $1 they spend on their ads” – Ray Chale, CEO, Lyfe Marketing
You see, Adwords works on what is known as a Pay Per Click (or PPC) model. Meaning that you ONLY pay when people actually click on your ad.
If people don’t click, you don’t pay.
Which makes it free, unless you want your campaign to be successful. And that’s precisely why we tell our clients to approach Adwords in terms of an investment and not a cost. Thinking about you’re campaign as investing in leads and boosting profits helps give a better understanding of how you’re dollar is being spent.
It also makes it easier to see why the more you’re prepared to invest in Adwords, the more leads and revenue you can generate.
The All Powerful Keyword
The second vital point to understanding a Pay Per Click Perth Adwords Campaign investment is the price of a ‘click’. And this is where it can get a tad more complicated.
Mainly because the cost of clicks varies greatly depending on the specific ‘keyword’ you’re ad is targeting.
For example, in the picture below you can see many different keywords – all at different prices.
**Note: for more information about what a ‘keyword’ is check out my guide to finding keywords for killer content here.
“OK, so what do the prices mean?”
Well the price is an estimation of how much you’d pay for 1 single click (otherwise known as the Cost Per Click or CPC).
So in the above example Google estimates for one click you’d pay $5.27 for ‘landscape design‘ and $4.26 for ‘landscaping companies’, while ‘lawn fertilizer‘ would cost $0.89.
**Keep in mind, these are estimates.
Annoyingly, the CPC of keywords varies depending on a number of different factors (search volume, significance, conversion rates etc etc etc) and is a major reason why Adwords spend differs for every campaign.
To sum up our (very) quick Adwords pricing overview:
Adwords is FREE – you only pay when someone clicks on your ad (PPC).
The Cost Per Click (CPC) depends on the ‘keyword’ you’re targeting.
The CPC of keywords changes in price constantly.
Brilliant! You now have the Adwords understanding you need to start calculating your required spend.
How to Calculate your Adwords Spend:
Now the good part – seeing how much you need to invest in your Pay Per Click Perth campaign to see a skyrocket in revenue. To do this all you’ll need is 3 key pieces of information:
1. Estimated Cost Per Click
2. Estimated Search Volume
3. Estimated Conversion Rate
To illustrate how to get these figures, I’m going to use a simple example: Rodney.
Rodney is a Perth landscaper who wants to boost his leads and revenue using Adwords.
1. Estimated CPC & Search Volume (SV)
One of the best (free) ways to get the CPC and SV is actually provided by Google: the Adwords Keyword Planner tool. Once you’ve signed up for Adwords, navigate to the ‘tools’ section and click on ‘keyword planner’ (or just follow this link). Which will take you to a page that looks like this:
Then ‘Search for new keywords’ and enter your keyword in the box as well as your location.
For Rodney the keyword is ‘Landscaping Services’ and his targeting is to Perth.
Which gives him..
His keyword, the search volume and the estimated ‘bid’ (which is our CPC). Easy hey?
Plus a quick scroll down and you’ll see keywords! Lots of them, along with their own search volume and CPC (in fact you may recognise some of them from above).
Next, simply select keywords to target and work out an average CPC.
Scan the list and focus on keywords with a medium – high search volume that you think are most applicable to your business.
In this case Rodney’s going to target: landscaping services ($8.69) and lawn mowing service ($4.70).
Meaning an average CPC of $6.66.
Now all we need is the…
2. CONVERSION RATE
This is a tricky one as every business is different. To work out your conversion rate you’ll have to answer the question: “how many people that visit my website convert into paying customers”.
In Rodney’s case, he’s taken the time to have lead generating experts optimise his website for conversions, has gone over his numbers and has come to the conclusion that 1 in 10 visitors will convert to a phone call.
Giving him a conversion rate of 1:10
**If you’re having trouble working out how to get a conversion rate, or would like to find out how to optimise your site for lead generation and conversions we’re always here to help.
And that’s all the numbers Rodney needs. So, before we continue let’s quickly run over Rodney’s numbers:
CPC = $6.66
Conversion Rate = 1:10
3. REACHING A FINAL NUMBER
The final step is to work out a minimum number of conversion you need per month. This is again up to you and your business goals.
In Rodney’s case he wants at least 10 calls (conversions) a month from Adwords. So if he converts at 1:10, it means he needs at least 100 clicks.
Knowing he requires 100 clicks, he can now use the formula:
REQUIRED CLICKS x CPC = MINIMUM MONTHLY ESTIMATE
To get a final number of:
100 x $6.66 = $666 (minimum per month)
**Again this is just an estimated spend, and because of that we recommend adding 5 – 10%, which would mean Rodney would need to budget around $700 a month.
It looks like a lot, but if you imagine that Rodney makes $200 a conversion – that is a return of 285%.
Which is an impressive number for anyone.
And that’s it! Our quick little guide to help you find the minimum cost of an Adwords campaign. Of course if this all sounds like too much work (or complete gibberish) and you’d like to ask a real person about it, the guys at Summit Web are always keen to chat.
As always, if this was helpful (or even not) to you Pay Per Click Campaign lets us know in a comment below.
Google AdWords Calculator: How Much Revenue Can You Make?
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