Google Ads: a far-off, mystical land where businesses bid for internet fame and fortune. It’s like a gladiator battle, except instead of swords, you’re armed with a marketing budget and an existential fear of accidentally bidding $50 per click on “best cat memes.” To help you navigate this digital battlefield without losing your shirt, let’s break down how Google Ads works and what actually influences the cost of your advertising campaigns.

How Does Google Ads Work?

Google Ads operates just like an auction, except there’s no exceptionally fast-talking guy waving a gavel. Instead, businesses bid on keywords, and Google decides who wins based on three things:

1. Your Bid: The amount you’re willing to pay per click. The popularity of keywords being used determines the cost per click, but more on that later.
2. Quality Score: How good your ad and landing page are (more on this later, too – we can’t give away all the good stuff at the beginning).
3. Ad Rank: Google’s secret sauce that determines if your ad deserves the top spot, or gets buried beneath pages of competitors who spend more money than you.

If you win the bid, congratulations! Your ad appears, and if someone clicks on it, you pay. If not, Google pockets nothing, which is why they really want your ads to succeed (and why they keep subtly nudging you to “increase your bid for better results”).

What Influences Google Advertising Cost?

Now that we’ve gone over the the basics, let’s talk about what actually influences the cost of your Google Ads. Spoiler alert: Your budget isn’t the only thing that determines Google success—otherwise, billionaires would dominate all search results (to be fair, depending on the industry and competition, they kind of do, but there are still things you can do to achieve very respectable Google rankings without breaking the bank).

Factor 1: Keyword Competition

Think of keywords like real estate. If you’re bidding on “best pizza in Edmonton,” you’re competing with every pizza joint from family-owned restaurants to that one guy who thinks his basement suite oven qualifies him as a chef. High-demand keywords and phrases mean high costs, while niche keywords (“gluten-free pineapple pizza with extra olives”) will cost less.
Pro tip: Instead of going after ultra-competitive keywords, focus on long-tail keywords—phrases that are more specific and, usually, cheaper.

Factor 2: Quality Score and Its Role in Cost

Google doesn’t just reward the highest bidder; it also rewards the quality of ads. This means your ad must be:

• Relevant to the search words that users are typing into the Google Machine
• Likely to get clicked on (high expected CTR)
• Sending users to a useful landing page that is closely related to the keyword (so no bait-and-switch tactics, sorry!)

If your Quality Score is high, you can actually pay less per click and still outrank competitors with bigger budgets. Think of it as Google’s way of saying, “You’re doing great, kiddo!”

Factor 3: Target Audience and Settings

Your ad cost depends on who, where, and when you’re targeting.

Geographic Targeting: Advertising in a high-demand area (like downtown Toronto) will cost more than, say, an ad targeting the Yukon wilderness.
Demographics: Trying to target billionaires? Expect to pay more than targeting, say, broke college students searching for “cheap food near me.”
Device Targeting: Mobile ads often have different costs than desktop ads—because we all know how easily people click things on their phones by accident. PLUS, over half of all internet users access the World Wide Web with their phones.

 
Factor 4: Bidding Strategy and Budget

Your Google Ads costs are also influenced by your bidding strategy. You can choose between:

• Manual CPC Bidding: You set the max price per click (great for control freaks).
• Automated Bidding: Google optimizes bids for you (great for people who like to gamble).
• Target CPA (Cost Per Acquisition): You tell Google how much you’re willing to pay per conversion (ideal if you’re actually tracking conversions—if not, good luck).

The moral of the story? Be strategic. Don’t just throw money at Google and hope for the best. This is where a digital marketing specialist (like US!) can help you determine your ideal audiences, target CPAs, and give your quality scores a boost.

 
Factor 5: Seasonal Trends and Competition

Ever tried running an ad for engagement rings in February? All the best in competing with every other jeweller on the planet during Valentine’s Day season. Google Ads prices fluctuate based on:

• Holidays: Black Friday? Expect to pay top dollar for any ad remotely related to retail.
• Industry Trends: Travel ads cost more during vacation seasons, and fitness ads spike in January (because it’s a new year and a new me).
• Unexpected Events: If a celebrity suddenly endorses something related to your business or industry, expect prices to surge overnight.

Things to Consider for Non-Profit Organizations

Google offers a nifty (not so) little thing for Non-Profit Organizations (NPOs) called Google Ads Grants.
Never heard of it?
If you’re a part of a NPO and are interested in getting your advertising for FREE, you’d better listen up!
Through Ads Grants, non-profit organizations can gain access to $10,000 USD to go towards your advertising every month for text ads, allowing you to attract more donors, raise awareness and funds for your organization, and recruit volunteers! You read that right – $10K USD every month towards your Google Advertising budget. Just imagine all the fantastic things your organization could do with a budget that beefy!!

Contact Digital Tea today to learn more about Google Ads Grants, how to apply for them, and how we can help you maximize this incredible advertising opportunity.

Conclusion

Google Ads can be a small business’s best friend—or its worst nightmare—depending on how well you understand how costs work.

The Key Takeaways:

• Google Ads is an auction, but money alone won’t win—it’s about strategy and quality.
• High-competition keywords equals high costs, so whenever possible – go niche.
• Quality Score matters! Optimize your ads and landing pages.
  The more precise your targeting, the more you’ll control costs.
  Choose your bidding strategy wisely and plan for seasonal price fluctuations.

Want to make the most of your Google Ads budget without feeling like you’re at a gambling table in Vegas? Get in touch with one of our Google Ads experts! We will help you feel more comfortable in the wide world of Google Ads, and get your organization in front of your target audience. Let’s make sure your money works for you, not just for Google!