Google Ad Prices are Quietly Changing

Why are Google Ad Prices Going Up? How to Lower Google Ad Prices.


How Google Ad Prices Work

If you’ve always wondered how Google ad prices get determined, you’re not alone.  At its essence, Google AdWords is an auction.  But not entirely…

Over the years bits and pieces of truth emerge, even as speculation runs wild.  It’s an auction, but Google “balances” the auction parameters in ways to maximize customer satisfaction.  So on the one hand, they won’t take a higher price from an advertiser with poor outcomes JUST to make the extra money.  In theory, Google will take less money from a higher-quality advertiser who delivers a better experience for the searcher.

Why Google Ad Prices Have Quietly Changed

A recent article by confirmed what is often speculated about Google’s pricing — namely that they increase minimum bids in order to reach or exceed their revenue projections.  Some see this as a revelation.  We’re kind of like, “Duh?!”

It’s Google’s auction and they get to set the reserve price for any ad impression.  But advertisers are right to expect transparency.

Read More:  Honesty & Transparency in Marketing

Unfortunately, these kinds of disclosures just feed speculation and don’t make for great optics about Google’s pricing strategies.  But Google isn’t doing this out of the goodness of its heart; it’s a business.  Of course they want to maximize revenue and profit!

I’ve often equated a lot of their “helpful” features as the equivalent of giving the fox the keys to the henhouse.  I think you get what you deserve if you’re “automating” bidding and other elements of any SEM campaign.


“I’ve often equated a lot of their ‘helpful’ features as the equivalent of giving the fox the keys to the henhouse.  I think you get what you deserve if you’re ‘automating’ bidding and other elements of any SEM campaign.”

How to Lower Google Ad Prices

If you’re experiencing higher Google ad prices, there ARE things you can do.  In fact, you can schedule time with our team for a free consultation about it.  It’s one way we invest in potential customers before they invest in us.

Read More:  About Source Local Media

Number-one on the list of action items is upgrading from standard Search Engine Advertising (SEM) to the new Google Performance Max campaign type.

Read More:  Google is All-In on AI-Driven Ads

Read More:  What is Google Performance Max

Especially for customers in the types of businesses that over-rely on Google AdWords and other Search Engine Marketing, Performance Max has often lowered lead costs significantly.  We’ve seen reductions of as much as 90% in per-engagement cost.

You can also concentrate on improving the quality of your ads and the customer experience at your landing pages.  Google prefers to see focused content that relates exactly to what the searcher is seeking, and simple calls to action without a lot of hoops to jump through.

Read More:  Why isn’t My Search Advertising on Google Working?


We Can Help

Advertising keeps getting more and more complex.  We simplify it.

If you want to explore ways to get more out of your marketing budget and make meaningful impact on the growth of your business, we can help.

Just schedule a free initial consultation with our team.  Let us know what you’d like to talk about, and we’ll make sure the right experts from our team are on the call.

If it’s not time for a meeting, make sure you subscribe to our free e-mail newsletter so you get periodic updates on articles available in our Local Marketing blog.

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After 3 decades as a professional marketer, serial entrepreneur and business consultant Steven Ludwig shares his best practices for small business marketing for owners, managers, and marketers with limited time, money, and expertise. Steven started his professional marketing career in broadcasting in the early ‘90s in Chicago after attending Valparaiso University. After a brief stint at an advertising agency specializing in entertainment and sports marketing where he worked with radio and television stations, movie theatre companies, record labels, musicians, and professional sports teams, he moved to Nashville to form The Marketing Group with his long-time business partner, Jim Wood. Having worked with some of the largest brands in the world, in 2010 he returned to local marketing primarily out of an interest and excitement for working with small business owners to build stronger companies. That desire comes out of early days in radio, where he worked closely with everything from car dealerships to restaurants, insurance and real estate agents, banks, home services companies, and specialty retailers of all kinds. Over the past decade, he has been on the bleeding edge of digital marketing technology, constantly seeking to understand complex strategies employed by giant corporations and then translate those capabilities into tactics small businesses can execute at a local level. Today, in addition to other business ventures with his wife and other long-time business partners, he still lives outside Nashville in Franklin, Tennessee and currently serves as Executive Chairman of EmpowerLocal, a digital marketing company building a nationwide network of digital, hyperlocal news and lifestyle publishers to provide efficient advertising opportunities for local, regional, and national brands.


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