Are you asking yourself, “How much should I pay for PPC management?”
One of the advantages of running a PPC campaign is that you can set your own budget, but when you have someone run your campaign for you, you’ll spend more money.
The good news is that PPC campaigns work, and they can deliver big results for your business. In 2018, Google ad campaigns created $335 billion in activity for advertisers in 2018.
It’s easy to make your money back, but you have to know how much you can and should spend to grow your business. Read on to learn how PPC agencies charge clients and how much you should pay for PPC management.
How to PPC Management Firms Charge?
There are several pricing models that PPC management companies use. A company may use only one pricing structure for all of their clients, or they may mix and match pricing models depending on the scope of the project and the client’s objectives.
It helps to think of PPC management prices in two parts: the amount of money you actually spend on the advertising platform and the fees to handle your account. These are the most common pricing structures that you’ll find.
Flat Monthly Fee
This is the easiest pricing structure to understand. You pay one flat fee for your PPC ad budget and management fees in one monthly payment.
You have a predictable advertising spend and you don’t have to do the work. In many cases, this pricing model works for companies that don’t have a large budget.
Percentage-Based Pricing
Many PPC agencies will take the amount of money you have to spend on an advertising platform and add a percentage on top of it. On average, this percentage is about 20%, though some of the more established agencies can charge much more.
For example, if your ad spend for PPC ads is $1000 a month, then your management fee is $200, bringing your total spend to $1200 a month.
Hourly Rate
The hourly rate model is becoming more popular because large agencies have figured out a way to charge for digital marketing. With this rate, you have your monthly PPC budget that you spend on the platform.
In addition, you have an hourly rate that you pay anytime someone works on your account. For example, if the ad copy needs to be updated, you’ll get a line item on your monthly invoice that shows what was done on the account.
This is good because you’re only paying for the work that is actually performed. The downside is that you’re going to get charged for everything and the budget could fluctuate each month.
Pay for Performance
This pricing model only charges you if the ads get results. These campaigns work for businesses that are trying to generate leads and you pay the management company a set price per lead. If the campaign nets a new client, then there may be another percentage of the sale that you’ll pay to the PPC management company.
Additional PPC Management Fees to Look Out For
Some PPC management companies will have additional PPC fees that you need to watch out for before you sign a contract. The first fee that you may come across is a setup fee. That’s because it does take a while to get your campaign set up, especially if you’re targeting a lot of keywords.
The setup fee may be scaled according to the size of your campaign, or it may be a flat setup fee.
Other PPC management fees to look out for are late fees and termination fees. These will be outlined in the contract.
A late payment fee is an additional fee if you make a late payment. A termination fee may be applied if you sign a contract for a specific period of time and end the agreement early.
How Much Should You Pay for PPC?
When you are looking at how much you should pay for PPC, you can get lost in the weeds because there are so many options available. Here are a few key things to consider when you’re hiring a PPC management agency.
Campaign Goals
What are the goals that you have for your campaign? If you want to generate leads for your business, you should have a smaller budget because your ROI will be lower.
Yes, you’ll get plenty of leads, but not all of them will convert to sales. You should budget according to how many will convert to sales.
On the other hand, selling a product will require a higher PPC budget because you’re going to generate more revenue from those ads.
What Is the Campaign Worth to Your Business?
You’ll also need to think about the value that a lead and a sale has. You’ll want to calculate the lifetime value of a customer and the value of a lead. For example, a personal injury attorney could make thousands from one lead. The attorney could afford to spend more on PPC ads.
Those selling $20 products will have to rely on high volume to make the ad campaign worth it. It can be done, but you should have a lower advertising budget.
Who Gets the Data?
Let’s say that you hire a PPC management company and decide that you want to move PPC in-house or work with another company.
There are PPC agencies that say that they own your PPC campaign data. You’d have to start your PPC campaigns over because you lost access to your campaign.
If that’s the case, then you should pay less if you don’t get to keep the data.
How Much Should I Pay for PPC Management?
Did you find the answer to the question, “How much should I pay for PPC management?” There are a number of factors that will come into play with PPC management pricing.
Your campaign goals and the pricing model of the agency are two big factors. The bottom line is that you want to put yourself in a position to see ROI from the campaign.
Stick around and browse the broad range of articles that we have on this site to help you get the most out of all of your investments.
