Google Adwords allows you to display ads on search engine results and on other related sites. Google’s contextual advertising allows you to display image, graphic and rich media ads on content related websites. With Google Adwords, you will be in full control on the budget of your advertising campaign. Determining Adwords cost is an important step to have a control over your overall budget. Adwords allows to you spend as much as or as little as you like. These are the points which will help you in creating your Adwords budget.
i. There is nothing such that you have to spend a minimum amount of “X” $ every day for your ads. There is no minimum spend requirement.
ii. There is 10$ one time account activation fee to get started.
iii. No contracts in Adwords. You can start or stop your ads at any time.
iv. You will be able to set the limit on how much you are willing to spend on your ads each day. Each time your ad is clicked, you are charged for your actual CPC. Adwords continue to show your ads until the cost of the number of clicks exceeds your daily budget.
v. You get to specify how much you are willing to pay for each click your ads receive. This is the bid amount which you select. This is the maximum CPC of your ads.
vi. Make changes to your ad campaign at any time, including your daily budget and more.
vii. You pay only for the number of click you get (CPC). This can vary to CPM also.
These were the payment options for displaying ads in search engine results that will help in your Adwords cost.
But for Google contextual advertising, the payment method depends on the settings of the advertisement campaign. The advertiser may either choose to pay for every click his/her receives (Cost per click) or he/she can pay for every thousand impressions for his/her ads (Cost per impressions).
Inside the Google Adwords account, click on the Traffic Estimator which helps the advertiser to learn the average Adwords cost per click and estimated daily budget of the advertising campaign. Such kinds of information helps to calculate Google Adwords cost and predict the expenditures.
To receive the estimation, enter the required keyword/key phrases in the corresponding field and enter the maximum amount that you can pay for a click (max. CPC). If the price for the impression of your advertisement will be higher than the specified maximum CPC, the ad will not be displayed.
To see the results of the estimation, click on the Estimate button. The advertiser receives the information about the number of global and local monthly searches by the selected keyword, estimated average CPC, estimated ad position, estimated daily clicks, and estimated daily cost.
When contextual advertisements are placed on the search engine pages and on websites which participate in Google AdSense contextual advertising network neither CPC-based nor CPM-based advertisements have any advantage: all ads participate in the same auction. Google Adwords tool can help you in a greater manner to determine your budget in a short time.
Most people starting out in Adwords use the basic cost-per-click bidding (CPC) option, which means they accrue costs based on the number of clicks they get on their ads. If you use this option, the amount you’re charged per click depends in part on the maximum cost-per-click bid you set in your account, also called maximum CPC bid. This represents the highest amount that you’ll ever pay for an ad click. In fact, you’ll be charged only the amount necessary to keep your ad at its position on the page.
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