PPC Cost 2025: Actual Pricing of Pricing of PPC Management

The average PPC costs range between $500 - $10,000 per month. Most businesses spend around $0.11-$0.50 per click and $0.51-$1.00 per 1000 impressions on platforms like Microsoft ads and Google ads. 

It is important to know that these are just the averages. Consider them as an estimate spend, because your business might spend more or less depending on different factors. Your industry, type of PPC services, the chosen ad network, and whether you are doing it in-house or hiring an agency make the difference in the final spending. 

Let’s understand the breakdown of the PPC costs: 

As of 2024, small to mid-sized businesses spent around $6,000-$10,000 per month in PPC campaigns. Businesses across industries earn $2 in revenue from every $1 spent on Google Ads. 

The 2:1 ROI ratio indicates that businesses are doubling their ad spend in revenue. 

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The conversion rate varies from industry to industry due to their different nature. The average PPC conversion rate is 1.3%, whereas the average SEO conversion rate is 2.4%. 

It is all because paid search advertising is viewed as an activity in which any business can .

Here’s a breakdown PPC conversion rates of different industries: 

Let’s visualize the data of average PPC conversion rate by industry: 

There are eight different types of PPC services, and let’s understand them to see which one you can use to let the leads reach you: 

Alt text: Paid Search Ads appear on the top of search engine result pages. 

Paid search ads are the most common type of PPC campaign that appears at the top and bottom of Google search results. They are tagged with the word ad, which indicates that it is paid content. 

The secret sauce to creating effective search ads is creating a set of right keywords because these trigger your ad to appear in the search results. Long tail keywords, like “Affordable refrigerator repair near me” or “Same-day fridge repair”, are preferred because: 

1. they drive more results 
2. they keep the overall CPC low

Display ads are another type of PPC ads that include some visuals, either an image or an infographic. These ads appear on Google partner websites. 

That’s why they are suitable for targeting your ideal customer profile that visits the other websites which similar to yours. When you place your ads on websites that your target audience is frequently visiting, the chances of being discovered increase. 

However, display ads need to be approved first by Google. So, it is best to follow Google Ads Image Requirements to ensure your ad doesn’t get rejected. If brand exposure is your ultimate motive, then display ads are your way to go. 

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Social Media ads, as the name suggests, are the ads that are visible on social networking platforms like LinkedIn, Instagram, Facebook, Twitter, and Pinterest. 

While these are some popular platforms where most businesses meet their target audience, you can choose a platform of your own where your audience spends more time. Social media offers advanced targets, so you can target your audience based on location, demographics, interests, behaviors, and education. 

Social Media ads are one of the best PPC campaign types because they offer specific targets. The narrower or more specific your target audience is, the better it becomes to reach your leads. 

Remarketing Ads is a type of commonly used PPC campaign type to re-engage your audience. These ads are suitable in cases when the rate of number of visitors is high, but engagement rates or conversion rates are not even nearby. 

This happens because people visit your website but ultimately do not wish or forget to proceed with your brand. That’s why the PPC campaign uses CRM remarketed ads to make them think about your brand and choose your brand. 

You can invest in remarketed ads to target people who have shown interest in your brand and guide them to choose your business over your competitors. 

Google Shopping Ads is a type of campaign that helps the audience to find your products. The ads appear in a carousel format above the main Google search results. It allows them to see the product’s image and price, and it becomes the deciding factor to click on it or not. 

These types of campaigns are the most effective ones because the customer is informed first before clicking on your listing. So, if the price fits their budget and they love the product’s appearance, then only they will click to explore the product in detail.  

Local Service ads are exclusive types of ads that are available to companies that come under the home service or trade service industry. It includes plumbers, HVAC companies, locksmiths, electricians, and garage door companies. 

As the name suggests, the local ads appear in specific local queries. So, these ads have a zip code, neighborhood, or city name in them, so the local residents can easily find your business. 

These service ads run separately from traditional Google ads, so if your business falls into such categories, then you can run local service ad campaigns. 

With Gmail-sponsored ads, you can reach your leads directly right in their Gmail inbox. These appear in the Gmail Promotions tab and have an “ad” or “sponsored” tag attached to them with bold subject lines. Users receive them as per their interests. Gmail ads target on the basis of affinity audiences, in-market, demographic, and customer match. 

Instream Ads are another popular PPC campaign where the ads appear on YouTube videos. Whether it is full-screen ads, unskippable ads, or small sidebar ads, all of them are a part of the PPC campaign strategy. YouTube has over 122 active users every day. To maximize your ROI, the ads need to be engaging and creative to get the user’s attention. 

Understanding the factors that affect the PPC costs helps in directly undermining and managing your PPC budget. 

The level of competition of specific keywords affects the overall PPC costs. Highly competitive keywords tend to have high CPCs, and ranking high for those keywords will become expensive. The minimum bid for keywords in Google ads is 5 cents, but the highly competitive keywords can take a bid of up to $50 per click. 

Conference calls, software, classes, rehab, treatment, and cord blood, are some of the expensive keywords. Businesses in the industries where services revolve around these keywords will have to pay high CPC rates. 

That’s why our experts prefer conducting comprehensive keyword research to find keywords with high search volume but less competition. 

Also, long-tail keywords are also effective in meeting your goals without burning your budget. 

Search engines, like Google, assign a quality score to every PPC ad. The higher the quality score, the better the placement of your ad, and the lower the CPC cost gets. The Google Quality Score depends on the combined performance of three components: 

• Expected Click-through Rate: How likely is your ad will be clicked when shown?
• Ad Relevance: How closely does your ad resemble the intent behind the target audience's search?
• Landing Page Experience: How relevant and useful the landing page is when the user clicks the ad?

Each component is evaluated and gets marked as either Above Average, Below Average, or Average. If one of the components is marked as Below Average or Average, then the ad and the landing page need to be optimized for better performance and marking. 

The quality score depends on the assessment of historical impressions for the exact searches of your keyword. 

So, changing the keyword will not change the quality score. 

Ad placement is another factor that affects PPC costs. Ads at the top position have higher CPC because they have higher visibility and increased chances of getting more clicks, as compared to ads at lower positions. 

With Google Ads, marketers can use automatically created Google Ad placement or they can define their own placement area. Several factors affect ad positioning, like ad relevance, bid amount, and expected click-through rate. 

Every agency will have their different pricing structure, but we will discuss three of them that are commonly used: 

How it works: The fixed pricing model is where you and the agency sign an agreement and pay a fixed rate regardless of the ad spend, performance, or hours spent by marketers dedicated to your account. 

This model includes other services along with PPC management, like landing page design and development and access to in-depth analytics reports. 

Best for: It is suitable for businesses that have fixed goals. 

Pros: 

• This pricing model encourages the agencies to deliver their best services.
• Also, this is a one-off initiative, the agency is more likely to convert your account on a retainer basis. So, with a motive to build long-term business relationships, the agency marketers will be dedicated to helping you grow. 
• With everything, from cost to goals and expectations, stated clearly in an NDA (non-disclosure agreement) before the onboarding process, it ensures a clear and concise partnership. 

Cons:

• This model might come with long-term commitment. The months-long commitment does not work in the favor of businesses that run seasonal campaigns.
• Also, a high investment is often required at the beginning of the project. 
• The model doesn’t accommodate changes in ad spent, whether up or down. 

Typical cost: $1,000 – $10,000+ per project

How it works: Hourly pricing is the simplest pricing structure as compared to other pricing models. You will be billed for the hours the agency’s marketers dedicated to your account. 

Best for: It is suitable for businesses with short-term goals. 

Pros: 

• It is a straightforward pricing structure because keeping the count of hours is easy. It requires setup for customizable hour tracking software. 
• It helps in keeping your campaign under control. As the PPC campaign grows, so does the budget and ad spend. So, the set number of hours keeps the campaign from getting ahead of you. 
• It avoids receiving mammoth invoices that come out of the blue. 

Cons

• It is the classic quality over quantity debate. This is because more hours don’t necessarily mean better results. 
• Depending on the scope of your project, the time will be quickly utilized without getting any major work done. For instance, most of the hours will be consumed in working on landing page design, without touching on your account. 
• The second con of the hourly model is that it discourages speedy optimization. It is fair enough for the agency to take their time on completely routine tasks if they are getting paid for it.  

Typical cost: $50 – $300+ per hour

How it works: The value-based pricing model is an advanced pricing strategy where you have to pay as per the value received from the agency’s efforts. This model’s shift focuses from the standard bid-driven PPC pricing to a strategic and dynamic approach. In this structure, the production cost solely does not determine the PPC cost but rather the perceived value of the ad. So, if an ad is likely to generate higher quality leads, businesses will be paying more even if CPC is more than a cost-based model would dictate. 

Best for: It is suitable for businesses that prioritize high-value customer acquisition.

Pros

• This pricing model guarantees exceptional performance because cost is not an issue here. 
• Sometimes, cost restrictions become an issue when the strategies require spending a higher CPC. However, if by spending a higher CPC, you are getting the perceived value, then every penny invested is worthwhile. 
• The pricing model benefits from easy and quick decision-making. Other pricing models require negotiations, however, things are pretty much straightforward in this case. 
• If you haven’t received the perceived value or witnessed the desired growth in KPIs, then you will be paying as per the value received. 

Cons

• The biggest con of this model is that being the client, you can control or affect the quality your agency gives you. 
• If you are paying solely for the leads generated, then the agency might employ strategies that drive higher leads. However, if those leads aren’t high quality, or your marketers have to work extra hours to chase them, then you are throwing your money down the drain. 
• Payoffs with this pricing model are kind of low unless you are getting high-quality leads from the agency. 

Typical cost: $5,000 – $50,000+

Still not sure? Use the following decision flowchart to select the right PPC management pricing model for you:

To calculate the PPC cost, you will need solid numbers on the following metrics: 

• Number of customers: minimum number of customers to visit your site or view the ad
• Revenue: Revenue target for the campaign (depends on sales period, so it can be monthly or quarterly)
• Average sale per customer:  Average sales per customer associated with the product or service highlighted in the campaign to establish a proper target customer count. 

With these values, you have first to calculate the number of customers (NoC) to meet your target using the following formula: 

NoC = [Revenue Target/Number of Sales Period Campaign Will Run/Average Sale per Customer 

Then, here’s the formula to calculate the PPC budget: 

PPC Budget = [(Number of Customers/Sales Team Conversion Rate) / Website Conversion Rate ] x CPC

While the above method might seem time-consuming, this approach helps in allocating budget as per your company size. If this calculation looks laborious to you, then you can fill out the following form to get a correct estimate within 24 hours and a clear timeline. 

The expertise and experience of the PPC agency play an integral role in determining the success of your PPC advertising campaigns. At Tenet, we are a team of 30+ professionals that strategically plan every phase of your PPC campaigns that maximize your ROI. Every dollar that you spend on your ads, we ensure that it drives measurable growth of your business. 

We have catered to over 400+ projects and boast a client satisfaction rate of 98% and a retention rate of 46%. We build adaptive strategies that are designed to handle the uncertainties of an unpredictable market. 

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The formula to calculate the PPC budget is: 

= [(Number of Customers/Sales Team Conversion Rate) / Website Conversion Rate ] x CPC

To get an accurate estimate of the PPC budget, you can use our PPC calculator where you can share your requirements, and our experts will send a quotation within 24 hours with a detailed breakdown. 

Yes, Pay-per-click advertising is an effective way to attract new customers to your business. However, this is only if it is done in the right way. For that, you need an expert team of digital marketing professionals with knowledge of tried-and-tested PPC strategies that work. Connect with Tenet experts today to discuss your requirements. 

The hourly rate of PPC starts ranges from $25-$300. A rule of thumb is to allocate 10-25% of your advertising budget as the freelancer fees. 

So, if you have a monthly budget of $2,000, then you can keep aside $200-$500/month for the PPC specialist. 

It is difficult to deduce a solid value that can be regarded as good CPC for the PPC campaigns. This is because the average CPC varies widely by platform and industry. The average CPC for Google ads ranges between $1-$2 and for Facebook ads ranges from $0.50 to $3. Highly competitive industries, like healthcare, finance, and law, have higher CPCs.