How Much Do Keywords Cost? Google Keyword Pricing Explained for Marketers

We get it — you want to bring some clarity to your marketing budget. But understanding exactly how much your keyword bids are going to cost is confusing. Here are the top three things to keep in mind when you navigate keyword pricing:

1. Keyword pricing mostly refers to PPC Strategy, not organic SEO cost per keyword.
2. Keyword cost varies widely.
3. The most expensive keywords don’t always bring the greatest ROI.

Let’s dive into exactly how keyword pricing works and how you can leverage this knowledge for more traffic and conversions. 

Why Keyword Costs Are Confusing

Let’s clarify some confusion around the cost of keywords. When your manager asks, “How much do keywords cost on Google?” for your industry, they might actually want to know any of the following things:

• How much will an organic SEO strategy for these terms cost us? 
• How much will a PPC campaign cost us? 
• How much will we need to pay for ads that target certain keywords? 

These are all completely different questions with their own answers! Not only that, but the answer to each will vary widely depending on factors like:

• Specific industry
• Business size
• Audience profiles
• Customer intent 
• External market forces
• Seasonality

There are no set prices for specific keywords on Google. Rather, there are varying costs for specific strategies that target certain keywords. 

What Does “Keyword Cost” Actually Mean?

In digital marketing, “Google keyword cost” or “price per keyword” almost always refers to paid search keyword selection, usually in the context of bidding on keywords in Google Ads (formerly known as Google AdWords). 

This is different from organically targeting certain keywords with your SEO efforts. With organic SEO, you incorporate keywords throughout your digital presence. Over time, search engines pick up on these keywords and start to rank you more highly for searches with these terms.

With paid search, you allocate a certain amount of ad spend per keyword. If your ad spend (and organic ranking factors) are high enough when a customer conducts a search for those terms, your site will be featured at the top of organic search results. 

From here on out, whenever we talk about keyword pricing, we’ll be talking about this process on Google Ads. 

How Google Determines Keyword Pricing

The cost of buying keywords on Google becomes extremely complex very quickly. There’s no set price where you can quickly reference a term — say “air conditioning in Atlanta” — and see that it costs $6. Google uses a complex formula to determine keyword pricing. The price you pay can vary with each search.

Google’s Auction Process

Each time a search is conducted, Google runs an “auction” for that keyword or phrase. This is an automated process that takes into account several factors, including:

• Overall relevance of your website to the searcher’s query
• Your bid amount 
• Website quality score 
• Expected click-through-rate (CTR) 

You’re only charged the minimum amount to beat your next-in-line competitor. In other words, just because you bid $2 for a keyword doesn’t necessarily mean you will be charged $2 per search. 

How to Get a Lower Keyword Price: Quality Content

The cost of buying keywords on Google varies for each advertiser. You might be charged more or less than your competitors. A highly relevant landing page or ad that is more likely to convert tends to get charged less for keywords. See how important it is to optimize your design and content, both for organic SEO and for paid search? 

Other Factors Affecting Keyword Price

Each auction takes into account a wide variety of factors, and they all fluctuate from moment to moment to affect the final price of each bid. Some of the top factors affecting Google keyword pricing include:

• Competition
• Intent (commercial queries cost more than informational)
• Industry
• Location
• Quality Score

So an example of a high-competition keyword could be a query like “deal on Nintendo Switch near me.” This phrase indicates a strong commercial intent, and if the searcher is located in a crowded market, like New York City, the keyword price will likely be fairly high. This gives sites with a higher quality score an edge. 

Average Cost of Google Ads Keywords (Realistic Ranges)

By now, you realize that Google keywords cost can’t be boiled down to a price menu — it’s a bit like asking how much a house costs. Are we talking about a bungalow in Miami or a mansion in Cleveland? 

Context is everything.

Cost of AdWords Keywords & CPC

Cost-per-click is how expensive each click on your ad is. This is a crucial metric when determining the ROI of your ad campaigns, and it’s how the cost of each ad unit is measured. 

The average CPC for Google Search Ads across all industries is $5.26. Now, high CPC industries, like legal services, can cost as much as $50+. Low CPC industries, like travel or niche industries, can be as low as $0.80. 

It’s best to conduct research on your specific industry to find out what realistic ranges are. Here are a few average benchmark ranges for Google keywords cost:

Home and Home Improvement: $7.85

Finance and Insurance: $3.46

Restaurants and Food: $2.05

Personal Services (haircare, massage, nail salon, etc): $5.81

Adwords Keyword Cost by Intent

In general, low-intent (or informational) keywords are cheaper than high-intent (or commercial) keywords. Capturing search traffic that indicates active shopping is more valuable than searches aimed at finding answers to questions. For example, “book wedding venue near me” is high intent, whereas “wedding venue inspiration” is low intent. That doesn’t mean low-intent keywords are worthless — quite the contrary! Just be aware that commercial keywords will cost more. 

Google Keyword Cost: Brand and Local Service

Local services with an intensely competitive local market, like lawyers and dentists, are also competing with Google Local Service Ads. That can drive up the CPC cost. You probably want to get a marketing professional involved here to decide if display ads, search ads, or local service ads are the best use of your budget.

Similarly, brand names affect CPC on Google Ads. If a customer searches for your specific name — “Sally’s Hardware” — that indicates high intent + low competition, which is a great keyword for you to bid on! Unfortunately, this can get disrupted if your competitors decide to bid on your brand name intentionally to drive up your advertising costs. Not very nice, we know — but it happens. 

Brand names can also distort CPC rates if you have a product that’s usually associated with a specific trademarked name — Band-Aid instead of bandages, for example, or Tupperware instead of food storage containers. 

Why High-Cost Keywords Aren’t Always the Best Choice

Just like you can’t throw the highest possible bid at preferred keywords to win a bid, you don’t want to exclusively focus on high-cost keywords. Remember, the entire goal of your paid search strategy is to increase conversions — usually in sales or bookings. 

The best keyword strategy is the one with the highest ROI — not necessarily the highest cost of keywords. This means that you need a clear, accurate, and easily interpreted tracking system to see exactly how your keywords are converting. Traffic alone doesn’t equal sales — you need conversion tracking to see which of those ad clicks turned into a sale, and for which products or services. 

Typically, we see business owners have the most success with a hybrid strategy that combines high and low-cost keywords. The sweet spot is to identify relatively low-competition, but high-converting keywords — usually by exploring your business’s USP. 

Bottom line: the cost of a keyword is not the main factor — how well it converts for you is. 

Paid Keywords vs. SEO Keywords: Cost Comparison Over Time

There’s another angle to consider when it comes to the cost of keywords — your organic SEO strategy. This can get confusing during strategy conversations, because marketers discuss optimizing for both organic and paid search. Just keep in mind, your paid search strategy requires an ongoing cost per click. So a Google keyword cost of $2, for example, means your Google Ads account will be charged $2 each time a customer clicks that ad.

Your organic strategy requires more up-front investment, usually by updating large quantities of content, rather than SEO cost per keyword. This generates results over the long term, as it gradually boosts your domain authority — which will help out your paid search efforts, too.

In short, most businesses need both paid and organic keyword updates to maximize results. 

How to Budget for Keyword Costs the Right Way

The cost of keywords worries many marketing departments, who fear they may be dumping ad spend into Google Ads without anything to show for it. As with most marketing strategies, we recommend starting small, tracking your results, and iterating frequently. For Google keyword pricing, that means looking at your monthly budget holistically and allocating budget based on achievable goals, not just SEO cost per keyword. 

To make the most of your budget, leave plenty of time for testing and optimization, and be prepared to fine-tune every single month. There’s no set-it-and-forget-it in digital marketing. Just because you ranked well for “shower replacement in Chicago” in April doesn’t mean you’ll still be doing well for that keyword in November. 

Tools That Estimate Keyword Costs (And Their Limits)

Understandably, you want some notion of how much Google keyword costs will be before you start spending money! There are a variety of tools that help you estimate Google keyword pricing ahead of time. Google Keyword Planner is a marketing staple, and it’s free. Google’s Bid Simulator helps you fine-tune in-progress campaigns.

SEMRush and Ahrefs also offer excellent third-party keyword planning tools that are useful for both organic and paid campaigns, at a variety of pricing tiers. 

Keep in mind that these Google keyword pricing tools are estimates and predictions, not real-world data. The most useful data will always be the data collected from your own campaigns. 

When It Makes Sense to Get Professional Help

Keyword selection is just the beginning. An effective PPC strategy needs ongoing monitoring and adjustments, ad design, and conversion tracking. Not only that, but you need to choose which kind of advertising — search, display, or local service ads — is best for your industry.

If you need help wading through all these variables, a full-service digital marketing agency is a good call. 

Keyword Cost Is a Strategy Question, Not a Price List

At the end of the day, more clicks to your website is a nice vanity metric to show to your manager, but it’s worthless if it doesn’t translate into real sales. The goal in keyword strategy isn’t to get as many clicks for the lowest cost possible; it’s to drive more high-converting clicks to your site. 

The price you pay will be highly contextual. There’s no “price list” you can consult. Building your Google Ads strategy the right way, from the ground up, will ensure that you can build a scalable, sustainable strategy based on trackable success, not random clicks.

FAQs: How Much Do Keywords Cost on Google?

If you’re trying to predict the cost of buying keywords on Google, your head might be spinning thanks to all the variables that go into it. Here’s the short version of the cost of keywords, and what it means for your business. 

How much do keywords cost on Google Ads?

Keyword costs vary widely, depending on:

• Industry
• Competition
• Quality Score
• Customer Intent

The overall campaign design and quality of the website will strongly influence how much advertisers end up paying for keywords. 

Why do AdWords keyword costs vary so much?

Google Ads pricing is dynamic; advertisers can’t simply “purchase” keywords from a set list and expect to always rank for them. Each time a keyword is searched, Google runs an “auction” and “awards” that ad space to the advertiser based on a wide variety of factors, including the bid amount, relevance, competition, and quality score. 

Is it better to pay for keywords or invest in SEO?

Most businesses need both strategies. SEO brings long-term visibility for brands, especially with durable search terms. Paid search keywords are good for quick visibility boosts and seasonal keywords. 

What is a good cost per keyword?

A “good” CPC should always be tied to ROI. The best keyword is the one that meets your business goals — if it doesn’t do that, then it’s too expensive, no matter how much or little you paid. 

You should clarify your campaign goals before deciding what to bid on — are you looking for conversions, higher CLV, or better brand awareness? Finding the keywords that you can afford that meet your defined goal will be the best value. 

Can keyword costs be reduced over time?

Yes, if your website’s quality score improves over time, you may see lower keyword costs. You can also use the data you gather from previous campaigns to refine your ad messaging, which leads to better targeting. This makes it easier to identify low-cost, low-competition keywords that convert for you.