Why is Google AdWords So Expensive? 

 Last Updated May 15, 2023

By Zaid Ammari

Google AdWords is an incredibly effective method of online advertising that can be used to increase traffic and conversions drastically. Unfortunately, creating an AdWords campaign can be quite expensive. As a result, many individuals choose to forego this service in favor of traditional SEO. 

So, why is Google AdWords so expensive?

Things like increasing competition, high demand, and proven efficacy all play a role in inflating the cost of using Google AdWords.

However, while this service can be costly, it should not necessarily sway you from taking advantage of it. AdWords can be an incredibly beneficial service, and there are a few ways to reduce your costs.

Reasons For The Cost

Many would be users of AdWords are, understandably, skeptical at first due to the increasingly high cost to use the service.

To help you understand why this Google service can be so costly, consider these factors. 


First and foremost, competition is the main force behind the high cost of Google’s PPC advertising program.

As you might expect, there are countless businesses and individuals who would love to have the coveted top spot on Google’s search results. As such, there can be incredible competition even for businesses in typically non-competitive niches.

If you’re unfamiliar with how AdWords works, the basic idea is that you create an advertisement to show up when users search for specific keywords. To have your ad rank highly, you bid against other users who want to appear under the same keyword.

So, when you are bidding for a highly-competitive keyword, prices can quickly and easily skyrocket.

AdWords is Effective

AdWords is a very effective method of online advertising. When implemented properly, AdWords can generate incredible returns. As advertising is typically an incredibly expensive service, it’s no wonder that AdWords can be pretty costly. 


Google is, by far, the most popular search engine. Millions of unique visitors complete searches on Google every month. 

Having your advertisements displayed when relevant keywords are searched can expose your business to millions of unique users every month.

While these reasons, among others, have made the cost of AdWords skyrocket over the years, that doesn’t mean you shouldn’t use the service. The high price might seem daunting at first, but there are several reasons to include AdWords as a part of your advertising strategy.

Expensive Doesn’t Necessarily Mean Not Worth It

There are several reasons that you should still consider using AdWords despite its intimidating costs. These factors can easily offset the initial cost of AdWords and lead to increased conversion rates.

Consider these factors before deciding to pass on AdWords.

Consider Your ROI

When you pay for advertising, it’s not like you’re just throwing money away. Of course, as a business owner, you’re often going to be looking for the cheapest option. However, you need to consider the potential return on investment that AdWords offers.

Since AdWords is PPC, it’s easy to track exactly how much impact your AdWords campaigns have on your business. You don’t have to wonder whether or not you’re getting your money’s worth. The return on investment that you get with AdWords is easily measurable. This allows you to determine which ads are generating traffic so that you can stop spending money on ineffective ads. 

Easier than SEO

Particularly for new or small businesses, it can take months to produce results through SEO implementation. Due to the way Google handles SEO, it takes time for smaller businesses to build their reputation as an ‘authority’ in their industry.

Alternatively, AdWords can produce results immediately. As you continue to work on your website’s SEO, you can use AdWords to increase your traffic right away. AdWords can also give you a good idea of which keywords and markets you should pursue with your SEO strategy. As you can see AdWords results immediately, you’ll be able to see which keywords are most effective in generating clicks. 

Highly Scalable

Google Adwords has almost unlimited potential and is easily scalable. If you launch a certain campaign that proves to be very effective, nothing is stopping you from dumping more money into that campaign and generate even more conversions. With millions of keywords to choose from, you can market your business to a practically endless audience.

Additionally, there aren’t any contracts or commitments. Google AdWords allows you to adjust your spending and cancel campaigns at any time. This means that your marketing budget can be adjusted as needed.

Effective Targeting

AdWords makes it much easier to generate conversions as you can control which audiences to target. Keywords, of course, allow you to target people searching for terms relevant to your business. AdWords also enables you to target markets based on location. This can help you increase your brand awareness in your local market as well as the national market.

How to Reduce Your Costs

AdWords doesn’t have to be incredibly expensive. While prices will always be high for certain keywords and industries, there are strategies that you can implement to reduce your Adwords costs.

Find Less Competitive Keywords

As you might expect, highly competitive keywords are going to be much more expensive than less competitive keywords. Depending on your industry, it can be difficult to find keywords that are likely to lead to conversions and have low costs per click. It can be tricky to find less competitive keywords without sacrificing your quality scores.

Using Google’s keyword planner, you can view the average amount of monthly searches for a keyword and what its average CPC is. This can give you a good idea of whether or not a keyword is worth it for the price. 

Improve Quality Scores

Google AdWords gives a quality score to the keywords that you use. Google then uses this score to determine how much to charge you for each click. Google uses quality scores to make sure that users see ads that are more relevant to their searches.

Quality scores are determined based on the expected click-through rate, landing page, and relevancy of your ad to the keyword.

So, to improve your quality scored, you need to focus on these areas. Your advertisement should be directly related to your keywords and should include keywords in the copy. Additionally, your landing page should be informative and should be useful to visitors who click on your ads.

Implement Negative Keywords

Negative keywords are a great way to reduce clicks that are unlikely to generate any revenue. As AdWords uses a PPC model, one of the best ways to reduce your AdWords spending is to minimize the number of clicks from unwanted sources.

What are negative keywords?

Negative keywords let you tell Google to hide your advertisements when users search for specific terms. Adding negative keywords allows you to save money on clicks that are highly unlikely to lead to conversions.

You can use online tools to find negative keywords. Additionally, you can also check your AdWords analytics and see the terms that are leading to clicks. If you notice a term that isn’t relevant to the products or services that you offer, you can add it to your list of negative keywords.

Review Bounce Rates

Sometimes, certain keywords generate a lot of clicks but not conversions. Review your analytics and check to see how long users are staying on your page. If one keyword seems to produce a lot of clicks, but users tend to leave your site quickly, then you should consider either pausing the keyword or lowering your bid.

Manage your Bids

Another great way to cut your AdWords spending is to actively and effectively manage your bids.

First, you should raise your bids on your most effective keywords. Keywords that have high CTR and great quality scores should always get priority.

On the other hand, be sure to lower bids on your least effective keywords. If certain terms have low-quality scores, low CTR, or high CTR but low conversion rates, you should adjust your bids accordingly. 

Lastly, you should adjust your bids during low-traffic hours. Check your analytics to see which keywords are leading to conversions at different times throughout the day. For example, if most of your conversions come between 3 pm and 5 pm, you can increase your bids during these hours and decrease your bids for the rest of the day.

Google AdWords can be intimidating due to its cost. Due to incredibly high competition and demand, advertising through AdWords might not seem worth it on the surface. As a result, many business owners choose to focus all of their online marketing efforts on SEO.

However, while AdWords is expensive, several factors might influence you to make the investment. Proper implementation can generate an incredible return on investment. Moreover, there are numerous strategies that you can use to decrease the amount that you spend on AdWords dramatically. Despite the cost, making AdWords a major part of your online advertising strategy is definitely worth considering.

Zaid Ammari Headshot

About the author 

Zaid is a leading expert on data driven digital marketing; focusing on analytics and actionable insights from data. Founder of PPC Masterminds - he helps businesses build & run profitable data driven digital campaigns.

Get High Quality PPC Campaigns
That Actually Work!