Google Ads Getting Started: Account, Bidding, Budget, VAT

Google Ads is Google's advertising service. You pay when something you chose happens, such as an ad click or an impression. As of October 3, 2026, you create an account in three steps: business information, payment information and conversion measurement. In Korea, 10% VAT is added to ad spend. Your daily budget can be exceeded by up to 2x on a given day, but your monthly charge never exceeds 30.4 times the daily budget.

How Google Ads costs are charged

Google Ads picks the ads to show through an auction each time an ad spot opens. According to the bidding basics page, when you pay depends on the bidding method you choose.

Goal	Bidding method	When you are charged
Site visits	Based on clicks (CPC)	When a user clicks the ad and visits your site
Brand awareness	Based on impressions	Search: each time the ad is shown. Display: per 1,000 impressions
Actions such as purchases or inquiries	Based on conversions (CPA)	When the action you specified happens
Video views	Based on views (CPV)	When a video is viewed or interacted with

For first-time advertisers, click-based bidding is the simplest. The documentation recommends conversion-based bidding for intermediate or higher users, and it only works once conversion tracking is set up. So we suggest starting with click-based bidding and switching after conversion data builds up. This order is the author's recommendation, not an official Google rule.

Cost per click has two values. Max CPC is the highest amount you will pay for one click. Actual CPC is the amount finally charged for that click. Google charges only enough to beat the advertiser ranked just below you while still meeting the ad rank threshold, so actual CPC is usually lower than max CPC. However, if you turn on Enhanced CPC bidding or bid adjustments, actual CPC can exceed max CPC.

How to create a Google Ads account

The setup screen in the account creation guide asks for three things in order. At this stage you can also create the account first, without a campaign.

1. Business information: Enter your company name and website address.
2. Payment information: Confirm your billing country and time zone, then register a payment method. Choose from credit or debit card, PayPal, or a bank account.
3. Conversion measurement: This setting measures actions people take on your site after seeing your ad, such as purchases or inquiries. The last step is optional, but you need it if you want to use conversion-based bidding later.

If you use a card, a temporary authorization may appear on your card account. The same page says temporary authorizations are usually removed within a week. No ad spend has been taken, so there is no need to worry.

When sign-up is done, check the payment method you registered under billing settings in the Google Ads screen. Then check your business name and website address under account settings. If both appear as you entered them, the account is ready.

What to decide before you start Google Ads

The Google Ads setup checklist from Google Business says to start with the account structure. An account has two levels: campaigns on top and ad groups beneath them. Build separate campaigns, ad groups and keywords for each product or service so that ads and keywords stay relevant to each other. Once the structure is set, create your first campaign in the order below.

1. Set your budget and bids. The checklist advises splitting the total budget evenly across campaigns at first, then adjusting after you see results.
2. Choose keywords. Use the words customers would type when looking for your product or service online, and check search volume and suggested bids in Keyword Planner. Keyword Planner is free, but you need a Google Ads account to use it.
3. Decide the page people will land on after clicking the ad. The page should relate to the ad and keywords so visitors find the information they want right away.
4. Put the keywords people search for into your ad copy, add a call to action, and check the spelling.
5. Link Google Analytics to see what people do after visiting your site.
6. Look at which device your customers mainly use, desktop or mobile, and set your targeting.

After you turn on a campaign, check results on the campaign screen in Google Ads. Confirm that clicks and costs are coming in and that your ads are showing, then adjust keywords and budget.

Google Ads daily budget does not spend exactly that amount each day

The daily budget is the average daily spend you set for a campaign. According to the spending limits page in Google's help center, for most campaigns the daily spending limit is 2x the average daily budget and the monthly limit is 30.4x. The amounts below assume a daily budget of KRW 10,000 to keep the math simple. They are an illustration, not a real billing case.

Period	Limit	Calculation assuming a KRW 10,000 daily budget
One day	2x the average daily budget	Up to KRW 20,000
One month	30.4x the average daily budget	KRW 304,000

The same page says that even if the cost your ads accrue goes over these limits, the advertiser pays no more than the two limits, and Google covers the excess. As an exception, the "pay per conversion" campaign type has only the monthly limit, with no daily limit.

Daily spend above the daily budget is not a problem. Check your budget by whether the monthly total stays within the daily budget multiplied by 30.4. This limit caps what the advertiser pays, so even in the first week after launch, we suggest judging by the monthly-equivalent spend rather than one day's spend. This suggestion is the author's judgment drawn from the limit rules.

Google Ads VAT of 10%: what to check in Korea

In Korea, 10% VAT is charged on Google Ads spend. Whether VAT is actually applied depends on your contracting entity and whether you provided a business registration number.

Contracting entity	VAT treatment
Google Asia Pacific Pte. Ltd.	Business advertisers who provide a valid business registration number are exempt from VAT. Other transactions pay 10%
Google Korea LLC	10% on all transactions. If you provide a business registration number, you can receive an electronic VAT invoice

Handling also differs by payment method. If you pay by card, Google sends an electronic VAT invoice through a partner every month, and you also receive a separate receipt from the card company. If you pay by monthly invoice, the 10% VAT is added to the invoice. Business advertisers receive the previous month's invoice by email before the 10th of each month.

If you are a business, enter your business registration number correctly when you create the account, and check the actual charged amount on the payment screen.

Common mistakes when starting Google Ads

Calculating cost from max CPC. Max CPC is a ceiling, and the actual charge is usually lower. Do not multiply the ceiling by the number of clicks and conclude your budget is too small. Enhanced CPC and bid adjustments create exceptions, so check before turning them on.

Treating a daily budget overrun as a warning sign. Daily spend can reach up to 2x the budget. If the monthly charge is within 30.4x the daily budget, it is in the normal range.

Turning on conversion-based bidding without conversion measurement. Conversion-based bidding needs conversion tracking. Start with click-based bidding and switch after conversion data builds up.

Update (October 17, 2026): channel prioritization and budget allocation controls added

On October 14, 2026, Google announced two optional controls on the Google Ads blog that decide which channels get budget first: channel prioritization and budget allocation. The daily budget described above sets how much one campaign can spend. The new controls decide how that budget is split between channels such as Search and Display. If you use neither, everything works as it does now.

Control	What it does	Good to know
Channel prioritization	Sets a channel or channel group as higher or lower priority. Budget goes to the higher priority first, and the remaining budget is shared with the lower priority.	With target CPA or target ROAS bidding, it applies within the target range.
Budget allocation	Sets the maximum percentage of the daily budget that a lower-priority channel can use.	It tries to keep spend within that limit, but this is not guaranteed.

It applies to Search, Shopping, Performance Max and Demand Gen campaigns. In Search campaigns, you can set Google Search, Search Partners and the Google Display Network at different levels. In Performance Max and Demand Gen, Google surfaces such as Search, YouTube, Maps, Gmail and Discover are grouped into one "Google channels" item for prioritization. You set it at the account level, the campaign level and in shared budgets, and the setup path is in the Google Ads Help Center guide. Google said it will roll the feature out worldwide gradually over the coming months, so it may not be visible in your account yet.

Advertisers who have the Google Display Network turned on in Search campaigns should note a date. According to the same blog, from February 2027 the existing spend allocation setting will go away for Search campaigns with the Display Network on, so spend patterns may change. To keep your current setup, you need to set the Display Network to lower priority and set budget allocation to 50%. What to do now is check whether the Display Network is on in your Search campaign settings. If it is, set the values above once the new controls open in your account. Google explains that for target CPA or target ROAS campaigns that are not limited by budget, priority alone has little effect, so it makes sense to use budget allocation together. The Ads Decoded video (October 15) where the Google Ads team explains this feature also covers other budget and bidding features such as promotion mode and demand-based budgets.

Frequently asked questions about starting Google Ads

Does the cost stop right away when I pause Google Ads?

Once ad serving fully stops, no more cost is incurred. However, it can take a few hours to stop, costs accrued before then are billed, and the final invoice may be issued a few weeks later.

Do I have to prepay to use Google Ads?

You may be asked to make a small prepayment for sign-up verification. This amount is later applied to ad spend, and if you close the account it is fully refunded.