How much do Google Shopping Ads cost?
“Only pay for ads that pay off.”
– states the slogan on Google Ads website. Have you ever wondered what does it mean? Is this indeed the reality in Google Shopping Ads (and Google Ads in general)? Do we really only pay for the ads that bring us some profit?
Unlike with the regular, old school advertisement – in the newspaper or on the billboard, where retailers pay for space, regardless of the effect – in Google Shopping Ads, Google only charges per click. This system is usually referred to as PPC (pay-per-click) and the price as:
- CPC (cost-per-click) for Shopping Ads (PLAs)
- CPE (cost-per-engagement) for Showcase Shopping Ads or Local Catalogue Ads
Effectively, this means that it is not possible to determine the cost of Google Shopping Ads campaign in advance. However, it is possible to decide about the budget to be spent on one.
Here comes another question then – what should be the budget allocated to Google Shopping Ads campaign? Well, the response is not straightforward – it depends on many factors.
The maximum CPC bids – one may think “the bigger, the better” and usually great players on the market have huge budgets, but it is not 100% correlated. When Google decides which ad perfectly matches the search query, it takes into consideration the maximum bid (the upper limit of what campaign owner decided to spend on a searched keyword) and so-called quality score. The quality score includes, among others, CTR (click-through-rate), relevance for customers and the quality of the website. So, the point of the above is, that the budget should surely fit the size of the company, however, it is not the only factor and even small or mid-sized companies can accomplish a lot by preparing the website and product feed accurately.
Number of products in the campaign – the more different products there are in a shop, the higher budget is necessary, as the CPC will multiply by a higher number of items.
Also crucial is the sector of an products – there are some very competitive and demanding sectors on the market, which means the CPC for keywords leading to them is higher, sometimes extremely high. The owner of a campaign should asses the competition in his sector, the popularity of Shopping Ads as a marketing tool within this sector, as well as the demand for his product.
Strategy – Google Ads allows on some tailoring when it comes to setting up a campaign. There are three aspects of targeting that can be changed for each campaign depending on the specificity of a product and shop: geotargeting, device targeting and dayparting. The first lets you decide which geographical area’s searches are a priority for you. Device targeting allows dividing the budget between different types of devices (i.e. computers, tablets, mobiles). Lastly, but maybe the most powerful, dayparting gives the opportunity to allocate the budget equally for the whole day or focus only on some parts of the day, which are the most profitable for your business.
There are as well some “outside costs” which may impact the budget, like marketing agency (if you decide to entrust running your campaign to the experts) or Google Shopping Ads software. In case of this last point, you can avoid the spending money on software by trying out Heraldbee application which is free!
There is a lot of decisions to be made with regards to the budget and for sure everybody would love to have some kind of a reference. To give you a general idea about the average CPC – in the US it is between 1-2 dollars. However, there is no minimum or maximum limit set by Google.
We recommend to just give Google Shopping Ads a chance, analyze the costs of your product, start with a budget that seems reasonable and affordable for you and then observe the results (Google suggests to start with 10-50 dollars for a day). Based on the initial results, adjust the parameters to make the campaign more and more profitable. Observation is a key to success in this matter!