How much does advertising cost for small business? It’s a common question that often leaves small business owners wondering what is the best and cheapest way to advertise. For starters, you should understand that you don’t need advertising to succeed in business; but it will certainly help. You can be successful without spending a dollar on advertising if your product or service is strong with a loyal following, but other businesses may need to grab the attention of customers through marketing and advertising. What I am trying to say is that advertising costs money and if used correctly, it can increase business and sales.
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How Much Does Advertising Cost For Small Business
Every online advertising platform has its own strengths and weaknesses, and there are dozens of ad formats, campaign types, and performance metrics for advertisers to consider. Underneath it all, however, is always the same burning question:
“How much is this going to cost me?”
Today we’ll be taking an in-depth look at advertising costs on three of the largest online advertising platforms – Google AdWords, Facebook Ads, and Instagram.
We’ll examine the relative costs of advertising on Google, Facebook, and Instagram, as well as the strengths and weaknesses of each online ad platform. Finally, we’ll investigate how each platform measures up in terms of performance, and there will be plenty of real-world data and research throughout.
Here’s a quick summary of our guide to online advertising costs:
- The average cost of an advertisement on Google Ads (AdWords) is $2.32 per click on the search network. The average cost per click of an ad on the Display Network is under $0.58.
- The average cost per action (CPA) in a Google advertising search campaign is $59.18.
- The most expensive keywords in Google advertising and Bing Ads cost $50 or more per click. These are generally highly competitive keywords in industries that have high customer lifetime values, like law and insurance.
- The average small business using Google advertising spends between $9,000 and $10,000 per month on their online advertising campaigns. That’s $100,000 to $120,000 per year.
- The average cost per click of an online Facebook ad is $1.72. The average cost per action on Facebook Ads is $18.68.
- The typical CPM on Facebook Ads is around $10.
- The typical CPM for an Instagram ad is closer to $5, but Instagram ad costs are rising as the platforms gains in popularity.
Now let’s dig in, in a little more detail!
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Online Advertising Costs: How Much Do Google Ads Cost?
The granddaddy of internet advertising, Google AdWords isn’t just the world’s largest online ad platform – it’s an integral part of the Internet itself.
A typical Google search engine results page (SERP) featuring PPC ads.
You’ve probably heard the joke that Google is an advertising business that happens to own a search engine, but this isn’t actually far from the truth. Google gets the lion’s share of its billions of dollars of annual revenue from its online advertising, which in turn has enabled the company to stay on the bleeding edge of search technology.
How Does Google AdWords’ Pricing Model Work?
Before we can answer this, we need to specify which part of Google’s sprawling empire we’re talking about – the search network, or the display network.
Google’s search network is where pay-per-click (PPC) ads appear, above and below the organic search results for a user’s search query. Because Google serves online ads that are highly relevant to the search query, businesses that use Google advertising are able to drive highly qualified traffic to their site and landing pages. Instead of showing your ads to huge audiences that may or may not be in market for your products (like you do when you buy billboard space), you can target your ads at people who are searching specifically for the kinds of products or services you offer.
The CTRs may not be great, but Google’s Display Network offers advertisers unparalleled reach.
Google’s display network is where display ads appear. The Display network spans the vast majority of the indexable web. Although advertisers can include rich media content in many display ad formats (such as animation and video), most display ads tend to be banner ads.
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Google Ads PPC Ad Costs
As its name implies, PPC ads are priced on a cost-per-click (CPC) basis, meaning the advertiser is charged a small amount every time somebody clicks on an ad.
Your cost per click is calculated on the fly every time your ad appears according to a process known as the ad auction. The ad auction is Google’s way of deciding which ads to display when someone performs a keyword search, what order to rank the ads in, and how much each online advertiser pays per click.
You can learn more about it in this guide to the ad auction.
Your ad position and your cost per click are determined in part by the competitive landscape and in part by your own maximum bid (the max amount you’re willing to pay for each click) and Quality Score (a measure from 1 to 10 of how good your ads are). A higher Quality Score will raise your ad rank while lowering your CPC.
There are many other factors that will affect your CPC and other Google Ads costs. For example, CPCs can vary widely from one geographic location to another (even for closely related keywords and search terms), and from one industry to another.
CPCs for financial keywords, for instance, are often significantly higher than those in other verticals (we’ll get to more on this shortly).
Google Ads Display Ad Costs
Display ads on the Google Display Network (and other networks in general) often have significantly lower click-through rates (CTRs) than PPC ads. In fact, according to Solve Media, you’re more than 475 times more likely to survive a plane crash than you are to click on a banner ad – a sobering statistic indeed.
However, the CTR of your online display ads will increase significantly when paired with smart targeting options such as remarketing and life-event targeting. As with search ads, displays ads drive more ROI when you can achieve a higher click-through rate.
When advertising on Google’s display network, you have three pricing options:
- Cost-per-click (CPC) Pricing – Pay only when someone clicks on your ad; best-suited to online ad campaigns where your goal is to drive traffic to your website.
- Cost-per-thousand impressions (CPM) Pricing – Pay for ad views (bidding for one thousand views); best-suited to brand awareness campaigns where you want your ad to be seen as often as possible by your target audience.
- Cost-per-acquisition (CPA) Pricing – Set a target CPA and pay when your ad leads to a conversion; use this option if your end goal is sales or other online transactions.
Now that we’ve broken down the main differences between these two ad types and their typical pricing models, let’s dive into all that juicy data.
The Average Cost of an Google Ads by Industry
Online ad costs vary widely not only platform, but depending on the industry of the advertiser. With this in mind, let’s take a look at the average cost of a Google Ads ad across 20 industries:
The average CPC in Google Ads across all industries is $2.32 on the search network and $0.58 on the Google Display Network.
| Industry | Average CPC (Search) | Average CPC (GDN) |
|---|---|---|
| Advocacy | $1.72 | $0.32 |
| Auto | $1.43 | $0.39 |
| B2B | $1.64 | $0.37 |
| Consumer Services | $3.77 | $0.69 |
| Dating & Personals | $0.19 | $0.18 |
| E-Commerce | $0.88 | $0.29 |
| Education | $1.74 | $0.40 |
| Employment Services | $4.20 | $1.66 |
| Finance & Insurance | $3.72 | $0.72 |
| Health & Medical | $3.17 | $0.37 |
| Home Goods | $3.19 | $0.70 |
| Industrial Services | $2.00 | $0.60 |
| Legal | $5.88 | $ 0.60 |
| Real Estate | $1.81 | $0.88 |
| Technology | $1.78 | $0.20 |
| Travel & Hospitality | $1.55 | $0.24 |
As you can see, some of the most expensive keywords on the Google search network are in the Legal industry, with an average CPC of $5.88. This isn’t terribly surprising, given how expensive legal services can be and the often large sums of money at stake in high-profile lawsuits. In other common industries, average cost per click for an ad varies from as low as 19 cents to $3 to $4 per click. Generally, the most expensive the product or service for sale, the more expensive the ads.
That’s why the most expensive keywords in AdWords are in niches like business services and asset management.
To put this data in context, the average monthly PPC spend of a WordStream customer is $9,813. But note that larger businesses often spend much more, adding up to millions in online advertising costs per year.
How Can I Control My Google Ads Advertising Costs?
There are several ways that businesses can manage and control how much they spend on AdWords advertising.
You can lower your cost per click across your campaigns by raising your Quality Scores. Quality Score is largely a result of achieving a higher than expected click-through rate, so increase your click-through rates by writing highly relevant ads that hit searchers on an emotional level so they can’t help but click.
For tips on writing super-high-CTR ads, check out our study of what factors go into the best-performing ads in Google Ads.
There are a few other techniques you can use to reduce your online ad costs.
The first is a technique known as dayparting or ad scheduling. This allows you to specify windows of time throughout the day when your ads can be shown. For example, a brick-and-mortar retail business may want to maximize foot traffic to its physical locations, and using dayparting enables advertisers to restrict ads to hours or days when the store is open.
Adjusting dayparting settings in Google Ads.
Aside from offering greater control over when ads are displayed, dayparting can be used to reduce costs, even during “suboptimal” windows. If you look at the figure below, you’ll see that the average cost-per-action (CPA) can fluctuate widely depending on the time of day. This offers canny advertisers an opportunity to reduce costs if ad budgets are being stretched thin.
CPA by time of day, across both weekday and weekend searches. Notice how weekend CPAs tend to be significantly higher than weekday CPAs.
Another way to control your Google Ads budget is through geotargeting.
To continue our real-world retail business example from above, the same business hoping to attract foot traffic to a physical store probably isn’t going to see much return on ads being shown to users that live outside that business’ service area.
Geotargeting options in effect in Google Ads. This example shows a physical radius of 20 miles around Boston.
This is what makes geotargeting so powerful; it allows advertisers to target the locations that are likely to have the greatest impact. Combined with dayparting, this affords advertisers much greater control over where and when their ads can be displayed.
Yet another method you can use to keep your advertising budget under control in AdWords is device targeting. Again, using our physical store as an example, device targeting allows advertisers to – you guessed it – target specific devices with their ads and bid higher for searches performed on mobile devices.
In the figure above, Enhanced Campaign bid adjustments are used to modify bids based on Locations. Advertisers can use bid adjustments in the Devices tab.
This means that advertisers can bid on higher-cost keywords, such as highly lucrative “near me” searches, as these keywords often have much stronger commercial intent and signify much greater likelihood of that searcher following through on their search by visiting a nearby store – in our example, the store advertising on AdWords.
how much does it cost to advertise on a website
How much does it cost to advertise your website on Google?
Google Ads PricingPricing FactorAverage CostAd Spend$9000 to $10,000 per monthCPC (Google Search Network)$1 to $2 per clickCPC (Google Display Network)$1 or less per click
How much does advertising on a website cost?
Google Ads and Bing Ads: These search engines typically cost about $2 to $3 per click using their Ads, whereas advertising on websites typically costs about 50 cents. Ads that cost more than $50 per click are the most expensive.
How much does it cost to advertise my business online?
Online marketing has a number of mediums through which you can engage prospects, just like traditional offline marketing. From our research, we estimate that the average cost of online advertising is roughly $3-$10 per thousand impressions as well as $1-3 per
How much will it cost to advertise?
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It costs between $1 and $3 per ad on Google Ads. It is between $0.00 and $2.00. The cost per click is $1.00. It is estimated that the average small business using Google Ads for its online advertising strategy will spend between …
How much does it cost to advertise locally?
Ad Broadcasting Costs On average, advertisers can expect to spend $5 per 1,000 viewers for a 30-second commercial on local television stations. In 2020, the average cost of a 30-second spot broadcast nationally was $115,000, according to Adage.
How much does advertising for a website cost?
According to Google advertising, the average small business for whom Google advertising is used spends between $9,900 and $10,000 a month on online advertising. $100k to $120k per year is what that is. A Facebook advertisement costs about $1 per click on average. There is an average cost per action of $18 for Facebook Ads.
How much should I pay someone to advertise my business?
One study found that small-business owners spend, on average, 1 percent of revenue on marketing. A company that rakes in a million dollars a year in sales spends $10,000 on marketing, while a company that sells $5000 a year spends $5,000 on marketing.
How much does it cost to market my business?
Smaller businesses may allocate only 2% of their budget to marketing, while the average is between 9-13%. The percentage will increase if a company launches a new product or service, which requires greater publicity and advertising.
How much does it cost to advertise a website on Google?
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Google Ads PricingPricing FactorAverage CostCPC (Google Search Network)$1 to $2 per clickCPC (Google Display Network)$1 or less per clickProfessional Google Ads Management$350 to $5000 or 12-30% of ad spend per month
How much do Google Ads cost 2021?
On the Google Search network, Adwords costs per click are expected to range from $1 to $2 in 2021. Some newer niches may still have lower CPCs, while more established businesses may have higher CPCs.
Do you pay to advertise on Google?
A free account can be created by signing up. If someone clicks your ad, they will visit your website or call you, but you won’t be charged until that happens. Our goal is to set you up for success by providing detailed reports and insights so you can track the performance and cost of your ads.
How much does it cost to advertise your website on Google?
| Google Ads Pricing | |
| Pricing Factor | Average Cost |
| Ad Spend | $9000 to $10,000 per month |
| CPC (Google Search Network) | $1 to $2 per click |
| CPC (Google Display Network) | $1 or less per click |
How much does it cost to create an ad?
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Production of a TV commercial can cost anywhere from $1,000 per minute to more than $100,000 on average. Between $1,500 and $20,000 is the average price of a commercial. Keep this in mind as you plan your next 30-second television commercial, and then contact Beverly Boy Productions for more information on television advertising.
How much does it cost to advertise a website on Google?
| Google Ads Pricing | |
| Pricing Factor | Average Cost |
| CPC (Google Search Network) | $1 to $2 per click |
| CPC (Google Display Network) | $1 or less per click |
| Professional Google Ads Management | $350 to $5000 or 12-30% of ad spend per month |
How does Google charge for ads?
Ads on Google don’t have a fixed cost. Companies compete for each keyword using the auction model, so there are millions of auctions every minute on Google. The price also varies based on how much competition you have and how much the competition is ricing is fluid based on how much competition you have and how much those competitors are willing to pay.
Conclusion
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