Google advertising is an effective way to reach consumers in Australia. However, it’s expensive to get started. Many marketers and business owners alike may bulk at the initial start-up costs of using Google Ads, but it can be an excellent way to reach new customers and grow your business when used correctly.
This guide will explore the cost of Google advertising in Australia in-depth, assessing the potential return on advertising cost and if it is worth investing in.
As a bonus, you’ll find a Google Ads ROI calculator at the bottom of the page.
Let’s explore!
How does Google advertising work?
Google advertising (a.k.a Google Adwords) is a way to promote your business on Google. It is a form of pay-per-click (PPC) advertising, where you pay Google to show your adverts to people who are searching for what you offer.
When someone searches for a keyword or phrase related to your business, your advert may appear as a sponsored link or shopping card at the top of the search engine page. When someone then clicks on your ad, Google charges you a fee (known as cost-per-click or CPC).
The great thing with Google Ads is that you are 100% in control of what you spend. You dictate a daily budget cap (let’s say you’re willing to spend $60/day) and Google won’t spend more than your monthly limit (in the case of $60/day Google won’t charge you more than $1,824 a month).
You also have the option to pause your campaign at the click of a button.
Why should you use Google advertising?
There are several reasons to use Google advertising for your business.
Google is the most popular search engine in Australia, with 96% of the market share. This means that when Australians are searching for what you offer online, your advert has a good chance of appearing in front of them.
Google advertising is also very targeted. You can target your ads to people based on their location, what they’ve searched for in the past, and even what type of device they’re using. This ensures that your adverts are seen by people who are most likely to be interested in what you’re selling.
How much does Google Ads cost in Australia?
A Google advertising campaign can cost you anywhere from a few hundred dollars to tens of thousands of dollars per month, depending on your niche (and how competitive it is), your targeting location, the average cost-per-click of your keywords and the quality of your website and ads.
The average cost-per-click (CPC) as of 2021 for Google Ads is $2.22USD (~ $3.20 AUD). However, this can vary depending on your industry and the keywords you’re targeting.
For example, if you’re in the insurance industry, you can expect to pay around $8.61 per click. If you’re in the real estate industry, you can expect to pay approximately $2.27 per click.
To get an idea of how much Google advertising will cost for your business, I suggest using the Google AdWords Keyword Planner tool. This tool will help you to estimate the CPC for your keywords and give you an idea of how much you can expect to pay for your Google Ads campaign.
What is the return on Google Advertising in Australia:
Like with any form of marketing, the return on Google advertising will depend on several factors, including the industry you’re in, the keywords you’re targeting, and your profit margins.
Studies found that the average Return-on-Ad-Spend (ROAS) on Google advertising is 100%. This means that for every $1 spent on Google Ads, businesses saw an average return of $2.
Why does Google advertising have such a high ROAS?
There are many reasons why Google advertising can offer such a high ROAS.
Firstly, as we mentioned earlier, Google is the most popular search engine in Australia, with 96% of the market share.
Over 63,000 searches are processed on Google every second, and Google holds over 70% of the search engine market globally. Considering that 46% of clicks go to the top 3 paid search results, it’s easy to see how Google advertising can bring results.
Because Google dominates the market share, it has a lot of data on users’ search habits. This allows Google to show your advert to people who are more likely to be interested in what you’re selling, which increases the chances of them clicking on your ad and converting into a customer.
Google offers some of the most sophisticated targeting options of any advertising platform, allowing you to target your ads to people based on their location and what they’ve searched for in the past.
Google’s advanced advertising targeting is very effective. In fact, 35% of customers buy a product 5 days after seeing it on Google! The average conversion rate for a Google Ad is also over 3.75%, which is much higher than the average conversion rate for other forms of digital marketing.
Is it worth it?
We’ve taken a deep dive into how much Google advertising costs in Australia, and we’ve also looked at the ROAS and why it’s effective. Now, let’s look at some numbers to see if advertising your product or services on Google is worth it.
Sean runs an eCommerce website selling dog supplements. To further grow his business online he decides to give Googe Ads a go. He is ready to invest $1,520/month ($50/day).
After doing his research, Sean found that the average CPC for the keywords he wants to target is $1.50.
Based on the information at hand, Sean can expect to attract 1,013 visitors to his site. With an average conversion rate of 3% and an average order value of $65, he would generate 30.4 orders and $1,976 in gross revenue. That means, for every $1 Sean spent on advertising he makes $1.30 back.
ROAS = Ad revenue / Ad cost
This number is not to be confused with ROI or Return-on-Investment. ROAS gives you a good indication of how your campaigns are performing. ROI takes other considerations, such as gross profit into account:
ROI = gross profit / cost x 100
From these figures alone, you can see how valuable investing in Google advertising is. In the world of marketing, you have to spend money to make money, and Google advertising is a great way to grow your business.
Do you want to know exactly how much return you can expect from your Google Ads? I’ve put together a useful Google Ads ROAS calculator. Feel free to make a copy, plug in your numbers and get planning.
<< Google Ads ROAS Calculator >>
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Ready to get started with digital advertising? I’m a digital marketing consultant specialising in Google Ads management.
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