The cost of running adwords in Australia

Jun 2 by Shaun Shatkovsky

AdWords can be a highly valuable tool in any digital marketing strategy, and it may not be as expensive as you think! Here at Hype, we’re experts on the Brisbane Digital Marketing scene, so here we’ll give you a no nonsense, straight up analysis of the costs of using AdWords to run ads across the Google search and display network. In a nutshell, AdWords is the primary source of income for Google, and the network of businesses using it is huge: it encompasses small startups, medium sized enterprises and big corporate players that spend millions in online marketing.

Internet use in Australia

To analyse the cost of running AdWords in Australia, we first need a grasp of who uses the Internet in Australia. According to the Australian Bureau of Statistics:

There were approximately 12.9 million internet subscribers in Australia at the end of December 2015

Nearly 86% of all Australian households have access to the internet, and the average person spends 10 hours online a week. Online shopping is popular in Australia, but the main question is: who is shopping for what?

  • Those shopping for movies, music, games or books are mostly males between 15 and 17
  • You’ll mainly find females aged 17 and up shopping for clothes, cosmetics or jewellery
  • Tickets and bookings for specific activities and events are popular in Australia, and
  • Travel and accommodation purchases are more widespread amongst older Australians

It’s about understanding the market, not the internet

To create a successful online business in Australia, understanding the ins and outs of your online market is more important than technical knowledge of the internet. Mastering online advertising is more about knowing how to use tools available to you, not a comprehensive knowledge of how these tools function. Think of it like driving: to drive a vehicle, you don’t need to know how an internal combustion engine works – you just need to learn how to control it. The same principle applies to AdWords: all you need to do is work out how to manipulate AdWords to your particular target market.

The average cost of advertising with AdWords

To be frank, most data surrounding Australian business expenditure on AdWords is fairly vague. Some suggest the mean spend per visitor is between $1 and $2, while others suggest that the average small business spends around $9000 a month on online marketing. Don’t let these figures scare you off – every keyword niche is different, so there are many ways to come out with a cost-effective solution. The cost you pay per visitor depends on two things:

  • The market size for a particular keyword, and
  • The amount of competition that exists for a particular keyword

If the market is large and the competition is low, you’ll pay less for your visitors. On the other hand, if the market is small and competition is high, the cost of your visitors can climb.

Some keyword cost research in Australia

To give a clearer picture, here are a few practical examples of the price of AdWords keywords in Australia (and we’ve taken a conservative approach towards pricing, not an optimistic one!). In all the given examples, we’ve attempted to bid the lowest possible amount while still ensuring a search engine ranking. All the following examples used the Google AdWords keyword tool.

Case Study 1: You own a flower delivery business

Let’s say you own your own floral deliverly business, working out of your garage with a few regular clients you’ve gained through word of mouth. The AdWords keyword tool will show you that, in Australia, “flower delivery” is searched 4,400 times a month, but the competition is high. So, the suggested bid per visitor can escalate to $5 (higher than the above estimate of $1-$2). However, you could set your bid as low as $2 to ‘test the waters’.

Case Study 2: You’re a diesel mechanic who runs a mobile repair business

You’re a qualified diesel mechanic with a good reputation, and you get most of your business using Facebook groups that let you promote your services. Your business is doing well, but you find there are times when you’re just sitting around waiting for the phone to ring. A little AdWords research shows us that “diesel mechanic” is searched for 2,400 times a month in Australia, with low competition. The cost per visitor sits at just over $4, but, again, you could set a lower bid of $1-$2 and see how you go.

Case Study 3: You’re a small insurance company trying to get more customers

Your small-to-medium business employs 25 staff, and you offer travel insurance packages for short cruise ship tours around Australian waters. Since your business is all about leads, it is important that your sales staff capture as many enquiries as possible. Some keyword research demonstrates that the search term “travel insurance” has a huge market, with over 110,000 searches in Australia per month and high competition. This combination of a big market and high competition has pushed the suggested bid in Australia to $19 per visitor. Again, we can trial a campaign with a lower bid (even as low as $4) just to see what kind of impressions, if any, come from such a competitive marketplace.

Essentially, as a rule of thumb, to yield results from a large market with lots of competition, you’ll need to pay more per visitor.

Effectiveness of using AdWords in Australia

There are lots of potential positives to using AdWords in Australia, even though most sectors have a fair degree of competition. There are still thousands of potential customers looking online for products and services just like yours, and when it comes to AdWords and search engines, it’s definitely a case of “if you don’t play, you’ll never win.” Understanding and harnessing the power of AdWords could increase your customer base and open you up to new markets in different locations. Try using smaller bids to test the waters at first, and as you see what results come in and become more familiar with the platform, you’ll be able to adjust your bids accordingly.