At over $237 billion, Google’s ad revenue is a sign of the times. Businesses looking to appear at the top of the search giant’s results pages routinely turn to Google Ads to attract high-intent leads who become paying customers. However, this prime real estate comes at a cost — sometimes a rather steep one.
With some Google Ads costing hundreds of dollars per click, advertisers need to know what they’re getting into before launching campaigns. In competitive industries like legal services or insurance, a single click could eat up your ad budget — and if those clicks don’t drive users to take action, that could be wasted money.
The good news is that understanding which keywords are the most expensive and why can help you avoid the common pitfalls of Google Ads. This article gives you the scoop on the most expensive keywords, why certain keywords cost more than others, and tips to avoid overspending and make the most of every campaign.
What determines keyword costs?
According to Google, every $1 a business spends on Google Ads results in $8 in profit. However, some keywords require a much higher investment.
With Google Ads, advertisers bid on keywords and pay when someone clicks on an ad — known as a pay-per-click (PPC) model. Various factors determine the costs of Google Ads, including the following:
- Competition: If more businesses compete for a certain keyword, its CPC will be higher.
- Search intent: Keywords signaling a strong commercial intent — such as “buy,” “order,” or “near me” — will command premium prices but may result in a high return on investment (ROI).
- Industry value: Legal, insurance, and finance generally have higher keyword prices. These industries typically have a bigger payoff when customers make a purchase.
- Quality Score: Google calculates an account’s Quality Score by measuring the expected clickthrough rate, ad relevance in relation to search queries, and the landing page experience. A poor quality score drives up costs, while a good score can lower your CPC.
- Location and demographics: Ads targeting specific regions with high competition, such as big cities, may incur higher costs.
Understanding these variables can help you make smarter keyword investments. Additionally, keep in mind that you can control your Google Ads budget, defining how much you’re willing to spend when someone clicks on your ad.
High-CPC industries
Certain industries have notoriously expensive keywords due to their high customer lifetime value (LTV) or urgency-driven searches. Pricier keywords may make sense if they generate a healthy ROI, but others may be overly competitive and harder to convert.
Legal Services
Keywords like “best personal injury lawyer” can cost over $60 per click. One successful client could bring tens of thousands in revenue, so legal firms often compete for their share of searchers’ attention.
Insurance
Terms such as “car insurance quotes” may cost between $40 and $60 per click. Insurance agents, brokers, carriers, and other insurance professionals compete for customers actively searching for insurance savings with top-rated companies.
Finance
Keywords like “business line of credit” are nearly $40 per click. Financial services rely on these terms to attract high-value clients.
The most expensive keywords in Google Ads
While the industries above tend to have a higher CPC, certain factors can drive up costs into the hundreds and even over $1,000. For example, adding a location to keywords, such as “best personal injury lawyer Austin” or the phrase “near me” can result in a high CPC. Commercial searches attempting to locate specific products, reviews, promo codes, comparisons, and other information may also cost more.
Strategies to manage high-cost keywords
High-cost keywords can be a catch-22. While they attract high-intent customers, they can also quickly drain your budget if you don’t get the results you want. It’s essential to carefully manage your keyword strategy — otherwise, you’ll deal with unintended consequences. Here are some strategies to help you spend your budget wisely and achieve the best ROI.
Target Long-Tail Keywords
Long-tail keywords are lengthier, more specific phrases that typically have lower search volumes but higher intent. For example, instead of targeting the broad, high-CPC keyword “personal injury lawyer,” you might focus on “personal injury lawyer specializing in workplace accidents in [City].” Longtail keywords may have lower competition and cost while attracting prospects closer to making a decision.
Use Negative Keywords
Adding negative keywords to your campaigns can prevent your ads from appearing in searches irrelevant to your business. For instance, if you’re advertising luxury shoes, you might include the negative keyword “cheap” to avoid attracting bargain hunters. This strategy encourages the most ideal traffic and improves conversion rates.
Improve Your Quality Score
Boosting your Quality Score is one of the simplest ways to manage your campaign costs and achieve better ad positions. To improve it, focus on crafting high-quality ad copy that matches your targeted keywords and users’ search intent. Also, don’t disappoint them with lackluster landing pages — make sure they’re on point, easy to navigate, and aligned with what your ads promise.
Monitor Analytics
Review your keywords’ performance and adjust your bids accordingly. Increase bids for high-performing keywords that deliver conversions and reduce or pause bids for anything underperforming.
Amanda AI’s role in optimizing keyword spend
At Amanda AI, we help marketers take the guesswork out of managing keywords. Features like keyword fencing and keyword mining can help businesses rein in overspending while finding new opportunities.
Amanda AI’s self-learning algorithms continually optimize campaigns to stay ahead of market fluctuations without requiring manual adjustments. From predicting seasonal trends to allocating budgets across platforms, Amanda AI does the heavy lifting to stretch your advertising dollars.
Key takeaway: stay competitive without overspending
Google Ads is one of the most powerful advertising platforms, but its high costs can be daunting for new and established businesses alike. Knowing which keywords are the most expensive and why can help you avoid overspending while driving results.
Ready to take control of your ad spend without breaking the bank? Learn more about Amanda AI, and see how we can help you optimize your campaigns with up to 5 million optimizations daily.
