With PPC management agencies, as with many other service businesses, you typically get what you pay for.
But if you’re looking to hire a company to manage your Google AdWords and/or other pay per click advertising campaigns, what should you expect to pay? In this article, I’ll dig into that question and answer it as best I can based on almost 20 years in the industry.
Set Up Fees
Before we talk about fee structures, let’s talk about set up fees first because you may encounter them in any of the fee structures listed below.
A pay per click agency needs to put a lot of work into setting up a Google AdWords campaign. Keyword research, competitor research, researching the client’s business, writing ads, setting up tracking, setting up landing pages, etc.
To cover their costs for that up front work, many PPC agencies will charge a set up fee. How much this fee is will typically depend on the size of your campaign, number of keywords, if you have multiple campaigns, whether the agency is designing new landing pages, whether you’re running Search, Display and/or Shopping campaigns, etc.
On the low end, figure the set up fee to be around $250. On the high end, it can reach to well over $1000 for much larger, more complex campaigns that require a lot of landing page work.
PPC Management Company Fee Structures
There are really three main fee structures that most PPC agencies will use. They are percentage of ad spend, flat fee pricing and pay for performance. Let’s look at each in a little more detail so you can better understand the specifics and typical pricing structure for each.
Percentage of Ad Spend
The industry standard is 15% of ad spend. So if you spend $10,000 a month on your PPC ads with Google, Microsoft (Bing), etc. you’ll pay the agency $1,500 as a management fee.
One caveat here are monthly minimums. If you’re only spending $1,000 on ads, it’s going to be more difficult to find a experienced agency/freelancer who will only charge $150 a month for managing the campaign(s). So expect to pay a monthly minimum management fee in the $250 – $750 range.
This is another common option many agencies/freelancers use. It’s just as it sounds. You pay the same flat fee each month for management. It will usually be based on the size and complexity of your campaign.
Some businesses like this option because they think the percentage of ad spend incentivizes agencies to jack up their ad spend. And, for unethical agencies, that may be the case. But if you hire an unethical agency, you’ll have issues with them no matter what fee structure they have.
Pay for Performance
This is the least common option. Basically in this scenario, the agency gets paid based on how much revenue the PPC campaigns generate for the business.
Some businesses like this because they feel it aligns the interests of the company and the PPC agency. And, in some ways it does.
While I’ve done this sort of arrangement once or twice in the past, I generally stay clear of it. From an agency standpoint, there’s just too much out of your control in the sales process. The landing pages, offers, sales associates, inventory issues, scalability potential, etc., etc. etc. can sabotage sales no matter how great the PPC campaign can be.
Which Option Is Best?
At the end of the day, there’s no right or wrong answer here as to what PPC management should cost. More important is to find a agency/freelancer who is experienced and who you trust.