Google Ads (AdWords): How to Determine the Cost of a Campaign
By helloDarwin
November 24, 2017

Google Ads (AdWords): How to Determine the Cost of a Campaign

How much does a campaign on Google Ads (AdWords) cost? In fact, there's no single answer to this question. It all depends on your budget and advertising goals. We'll present the elements to know when you want to run an AdWords campaign.

Google Ads (Google AdWords): Strategies and How to Manage a Budget

Google Ads (AdWords) offers numerous possibilities and strategies. Moreover, there are 3 elements to determine when you want to start a campaign on Google Ads.
  1. The type of campaign;
  2. The cost of your keywords;
  3. The effectiveness of your keywords.
Subsequently, you can determine your overall budget in which you want to invest during the campaign and you subdivide it either into daily, monthly, or total budget for video campaigns only.
Number of days in a month: 365 days in 2017 / 12 months = 30.4 average days for 1 month
Example 1: You have a budget of $900 / month. $900 / 30.4 days = $29.61 budget per day
Example 2: You want to put a $5 budget per day. $5 x 30.4 days = $152 budget for the month

Source: Pixels

Why a Daily Budget?

It's a way to control your invested money and also to keep an eye on performance. Additionally, by indicating the maximum amount, this allows you to respect the established budget.
In some cases, AdWords may exceed the daily budget due to traffic fluctuation depending on the day of the week or the time of day. However, it will not exceed the monthly budget. According to Google Ads (Adwords), the excess will not exceed twice the daily amount of your campaign. In a case where the excess is more than double, the reimbursement for the excess will be in the form of a credit for excessive impressions. Indicating the maximum daily budget will help you control your budget so as not to have any surprises at the end of the month.

Budgets and Bidding for Keywords on Google

For those who don't know how to determine the budget amount for a campaign. Here are some clues that can guide you to give an estimate of your budget. Keep in mind that it is possible to modify your daily budget along the way.
For a video campaign, there is the option of the total campaign budget in which the maximum amount can be indicated. However, the budget is not modifiable during the campaign.
Be aware that the options are exhaustive and there are numerous strategies to maximize your budget. The information below summarizes some basics to understand Google Ads (AdWords).
Source: Martinez and company

What are your advertising objectives?

Before starting your campaign, you must first know the objectives you want to achieve at the end of your campaign. Is it to introduce a new brand? Generate traffic to your website? Increase the number of views of a video?
With your objectives in hand, the strategy will be better adapted to your situation. It will also be possible to adjust your strategy along the way depending on the results. AdWords may suggest strategies if the results are not as expected.

Choose a Bidding Strategy According to Each Goal

AdWords offers several bidding strategies. Here are the 4 main ones:
  • CPC= Cost per click. You pay for the number of clicks on the ads.
  • CPM = Cost per thousand. You pay according to the frequency in which your ad appears on a Google page. Charged for every thousand impressions. It is only available on the Display Network offered by Google Ads (AdWords).
  • CPA = Cost per acquisition. Designed for people interested in conversions like turning a potential customer into a customer. It’s a strategy that works based on an action performed by the visitor such as subscribing to a newsletter or purchasing a product.
  • CPV = Cost per view. Pay for each viewing of the video.

Basic Principle of the Bidding System

CPC: Prioritizes the number of clicks on your ad.
There are automatic bids in the sense that it’s AdWords that adjusts your CPC bids to generate the most clicks according to your budget. The advantage is that you can control your budget, thus no overspending. It's a simple means. The clearer your goal, the more the bidding strategy will be adapted. There are different strategies possible in automatic bidding.
There are also manual bids. This option gives you the possibility to have more control over bids according to specific ad groups, keywords, and locations. It’s a way to select what you want more precisely.
Finally, there is the Max CPC which is the amount or the maximum bid for a keyword that you are willing to pay.
CPM: Prioritizes impressions, that is, the number of exposures of the ad to the target. This option is mainly proposed to reach the target multiple times in order to make a brand and a logo known, for example.
To optimize CPM, you can add fees to use the CPM offered only on the Display Network. The vCPM, which is the cost per thousand visible impressions, offers the possibility to choose among advertiser groups and specific locations for the ad that the company wants to broadcast. It’s a tool that works like CPC manual bidding.
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What is the Display Network?

“It's a network composed of more than two million websites, videos, and applications, where you can broadcast your AdWords ads.
The Display Network reaches over 90% of Internet users worldwide*. Through the Display Network, you can use targeting to broadcast your ads in specific contexts (like 'outdoor lifestyles' or ''), to specific types of audiences (like 'young mothers' or 'people looking for a new sedan') or in specific geographic areas.”
Prioritizes the conversion rate, that is, the number of actions a visitor performs on a website, such as a purchase, newsletter subscription, etc. Conversion tracking can be activated to know the acquisition rate. It’s a strategy mainly dedicated to savvy users.
CPV: According to the number of views of a video and where the visitor stops watching the video.

Test, Test, Test

AdWords allows you to optimize your bids and offers other strategies that can even better meet your campaign and control performances. Don’t forget to test your strategy before launching your campaign.
Related Tags
Google Ads
Paid Referencing
Price Guide

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