Microsoft Ads work on a pay per click (PPC) basis, meaning you’re only charged when someone clicks on your ad. The price of a click is known as the Cost Per Click or CPC, and can vary depending on a number of factors. Each time a user searches, an auction happens between advertisers for their ad to appear. Each advertiser will set a maximum CPC on a keyword level – this affects how often your ads appear and where on the page they come up.
But the auction isn’t just about how much you’re bidding. Microsoft wants search results, including ads, to be relevant and useful for its users. The relevance of both your ad and your landing page compared to the user’s search query impacts on the ad quality.
The higher your ad quality, the more it boosts you up in the auction. This means that even if you’re not outbidding your competitors, you still have a chance to win the auction if you provide a very good user experience!
The Cost Per Click (CPC) varies a lot between different industries depending on how competitive they are. The CPC can also vary for each advertiser in the industry based on the quality factors mentioned above. One key benefit of Microsoft Ads, however, is that it’s often forgotten by a lot of advertisers. The lower competition often results in lower CPCs. So, you can get away with a smaller budget on Microsoft Ads.
Ultimately there’s no “one size fits all” rule for how much Microsoft Ads costs. It requires research and alignment to business goals to work out a viable and sustainable budget. If you’re interested in getting an idea of how much Microsoft Ads will cost for your business, we’d encourage you to get a free strategy!