After a three-month hiatus, we’re back!
There were lots of really good questions, but this one from Phil of Trumbull stood out:
“What is the average amount companies take for running a PPC campaign?”
Account management fees vary greatly; It’s understandable to want a baseline on how much to pay for PPC agencies/consultants.
That said, there are a number of different factors influencing the cost:
- What is the vendor’s level of experience?
- How much are you asking the vendor to own creative/technical tasks?
- Is this one channel or many?
- Are you paying for them to be a strategist/part of your team?
These all influence the cost of a partner, and there is no right or wrong answer on how “expensive” or “cheap” you should go.
What does matter is that you set reasonable expectations for your vendor and the campaigns they will be creating/managing for you.
How Do PPC Vendors Typically Charge?
Engaging a PPC vendor (be it for Google, Microsoft, LinkedIn, Facebook, TikTok, or other channels) means you own you do not have the time to do the technical tasks or allocate strategic planning to those channels.
When weighing the cost of a vendor, it’s important to consider how much it would cost if you did the same work (i.e., how many hours these tasks would take x your hourly salary).
Often times engaging an agency or vendor is much cheaper – but not always.
Flat Rate + Percentage Of Spend
The most common management fees are a flat rate plus a percentage of the managed spend, or just a percentage of spend. Sometimes the percentage will change based on the spend investment; other times, it will be fixed.
Agencies will typically figure out what overhead they need to cover and ensure the management fee covers that portion so the variable can be pure profit.
Typically, the fixed management fees range anywhere from $500 to $2,500, with the variable portion typically coming in at several thousand dollars.
Percentages will range from 5-13%.
Some vendors prefer to provide more “stability” with a flat rate on management. Sometimes they’ll bake in the ad spend costs, and other times, they’ll break out the spend from the management fees.
Typically, you’ll see these flat rate fees come in anywhere from $2,500 to $10,000 per month. Fees will go up or down based on how much your vendor is required to do outside of account management.
Asks that can raise the fees include:
- Designing ads and landing pages.
- Technical conversion tracking set-up.
- Scope creep mitigation.
Finally, some agencies and vendors will set up a pay-per-lead structure (performance based).
While this can seem the most advantageous, it also means the vendor will own the account.
If you know you will never want to own PPC internally, this can be a reasonable path forward. Otherwise, you’ll be served better by having an account you can own (and see the work done on your behalf).
Knowing Which Kind Of PPC Vendor Is Right For You
While the financial investment is absolutely part of it, there are many factors influencing what type of vendor to go for.
If your budget is less than $2,500 per month, you likely should look to software solutions or manage your campaigns yourself.
This isn’t to say that vendors won’t make sense; however, you’ll likely exceed acceptable overhead by adding a vendor on top of the spend.
When spends are subject to a lot of volatility (especially seasonal spend), flat-rate pricing might make the most sense.
Accounts with more stable spend trajectories will benefit from the often discounted fees that percentage of spend offers.
Going for a more expensive vendor typically means you’re investing in a strategist (i.e., you should not be responsible for telling the vendor what to do).
Opting for a cheaper vendor typically means you’ll need to be more direct on the strategy you want the vendor to execute on.
There is no “fixed” rate for PPC management – just like strategic choices, it depends on the level of support and expertise.
Have a question about PPC? Submit via this form or tweet me @navahf with the #AskPPC hashtag. See you next month!
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