We all know that it's ridiculously expensive to live in San Francisco.
Why? Because it's an amazing place to live.
Well, it can also be staggeringly expensive if you want to target certain keywords using AdWords, Google's pay-per-click (PPC) advertising platform.
Why? Because certain keywords are super valuable.
What is the Google AdWords equivalent of San Francisco?
If you want to target these insanely competitive keywords, it will cost you a whopping $58.64, on average.
So, whenever someone searches Google for a keyword like "data room" or "factoring company," and clicks on a PPC ad (which appear with the "Ad" label above and below Google's organic search results), Google charges that advertiser almost $59.
Let's say an advertiser get 100 clicks on that ad per day. That advertiser will pay about:
- $6,000 per day.
- $180,000 per month.
- $2.2 million per year.
Google shows up to seven AdWords PPC ads per page.
So multiply those numbers by seven -- just for Page 1 of Google's results. Check out the "data room" Google search results for yourself. If you do, you'll see that seven more advertisers appear on Page 2, seven more on Page 3, and even more beyond that.
This is how Google raked in more than $79 billion in advertising revenue last year.
But "Business Services" isn't the only expensive keyword on Google.
The 10 most expensive Google keywords:
Here's how much it would cost advertisers, on average, who want to advertise on Google for these terms:
- Business Services: $58.64
- Bail Bonds: $58.48
- Casino: $55.48
- Lawyer: $54.86
- Asset Management: $49.86
- Insurance: $48.41
- Cash Services & Payday Loans: $48.18
- Cleanup & Restoration Services: $47.61
- Degree: $47.36
- Medical Coding Services: $46.84
To get this data, WordStream examined the top keywords seen between June 1, 2016 and June 12, 2017, then categorized them by core intent.
There are individual keywords with even higher costs than these, but this research was specifically looking at related keywords with extremely high costs per click on average. As WordStream explained:
"For example, we lumped the keywords 'bail bonds' and 'bail bonds los angeles' into a single category, since the core intent is the same. Likewise, keywords involving different types of lawyers (such as 'malpractice lawyer' and 'injury lawyer') or insurance were grouped together. We used a similar methodology last time so as to avoid featuring too many specific long-tail or local keywords that wouldn't have broad applicability to a large number of businesses. We separated distinct services (pest control vs. termites) as much as possible."
To check out even more big money keywords, check out the Top 25 Most Expensive Keywords in Google AdWords advertising (disclosure: I am the founder of WordStream, but left the company in March).
What does it all mean?
While the most expensive keywords -- and the amount advertisers are charged per click -- generally get all the attention, it's important to remember that it's not really the cost per click that matters, per se.
Rather, the cost per conversion is most important.
I've written extensively through the years about how advertisers can drive down costs and push conversion rates up.
How? By improving their quality score (a metric Google uses to determine where AdWords ads rank in the paid search results and how much advertisers pay for every click).
A high-quality score results in lower costs per ad click, and paying less per click pretty much always guarantees a lower cost per conversion.
In fact, data shows that advertisers can reduce cost per conversion from 16 to 80 percent by optimizing for quality score.
So if you're thinking about advertising on Google but worried about how expensive it seems to be to target keywords you want, just remember: these costs are the average.
Not all advertisers pay these prices -- some pay even more than this. But smart advertisers are paying much less because they have learned to optimize for clicks and conversions (which is basically the same thing, anyway).