3 Factors That Impact Google CPC Budget

As a business, you may be considering Google Ads to help push your products or services out to potential customers. One of the most common questions we get from new clients is: What is a good budget for a Google Ads campaign? We’ve heard this more times than we can count. Budget is different for each client and based on a number of factors. In this article, we’re discussing the top three factors that have the largest impact on your Google Ads budget.



One of the biggest factors in running an online CPC (Cost Per Click) campaign is the industry in which your company operates. Some of the top click costs across Google come from law & government, financial, and health-related industries. These verticals have significant competition as well as a large value per conversion. Adding competition and a high value per conversion into the mix can produce average costs higher than $10/click.

Source: Instapage

Let’s take the restoration industry for example: These are businesses which come into your home after a flood or fire to remedy those emergencies. If your house had a fire in the kitchen, you have smoke and fire damage which needs to be repaired prior to living in your home again. You call XYZ company, the first company that came up when you Googled “fire damage restoration.”  Their ad was posted in the #1 position, and when you clicked, it cost them $135 for that click. But, your restoration contract will end up costing $10,000, so XYZ company’s ROAS (Return On Ad Spend) was actually 75.  This means for every $1 XYZ spent on that ad, they got $75 in revenue for the spend. Even though the click cost is high, the company is willing to pay it since it can be very lucrative to be #1 in a search within that industry.



Another factor which can affect CPC budget is what keywords you use. There are a few categories of keywords that can be used which can have varying results for average CPC prices. We will use the restoration industry above for the following examples.

  • Informational – “Do I need a restoration company after a fire?”
    • Informational search keywords tend to be less expensive for CPC as there is not an intent to purchase a service by what was typed in.
  • Commercial / Transactional – “Restoration companies near me”
    • These search queries have purchase intent behind them, which can lead to a higher CPC.
  • Competition – “ABC Restoration”
    • The customer typed in a competitor’s business name that you are also using as a keyword. You bid higher and have a better quality score on your ads than your competition, so your ad was placed in the #1 position for the search.

By going after variations of your keywords, you will be able to make your ad budget last longer.


Quality Score

The way your Google quality score is calculated is somewhat ambiguous, but here are some of the things taken into consideration by Google:

Source: Landerapp

Account quality, ad relevance, landing page relevance and historical performance are just a handful of factors Google uses when developing your quality score. Once you have your quality score calculation, you can put it into another Google calculation: your bid for CPC on each search.

Every time a search is performed for your product or service, and your ad shows to that potential customer, Google does this quick calculation to determine what position your ad shows up in as well as how much that position costs for each company who has ads displayed during this particular search. Look over the following infographic to see that being in the #1 position doesn’t always mean you paid the highest CPC in that ad grouping. In the graphic below, you can see Advertiser 1 is paying the lowest CPC due to their high quality score.

Source: Wordstream


Managing a fine-tuned Google Ads campaign is no easy task, but it is by no means impossible. It starts with a commitment to invest in the required resources, which for many means partnering with digital advertising specialists to spearhead the effort. Contact Baer Performance Marketing to get started today!