Finding the right PPC agency that charges reasonable fees and provides a great service can…
Understanding the pricing options for PPC agency services is crucial if you’re looking to make informed decisions about the partnerships you form with agencies.
However, understanding the pricing models from agencies can be a daunting task.
So, I’ve written this article to explore the most common pricing models for PPC agency services to help you make an informed decision when choosing the right agency for your needs.
1. Percentage of Ad Spend Pricing
Percentage of ad spend is one of the more common pricing options used by PPC agencies. And it relates to PPC management services like monitoring and optimising the campaigns on a monthly basis.
This involves charging a certain percentage of your advertising spend in Google Ads and this is usually 10-25% of your ad spend.
For example, if you have a monthly spend limit of £10,000 and the PPC agency charges 15% for their services, then you’ll pay about £1,500 per month.
– it aligns the agency’s compensation with your advertising investment
– the agency optimises the campaign for higher returns since their fee is directly tied to your ad spend.
– if you have a larger budget, then you’re likely to pay higher PPC management fees
– if you decide to scale up your ad spend, the fees will also increase, however, you’d normally do this when campaigns are performing well, which should not be a problem
2. Flat-fee Pricing
PPC agency services are also priced on a flat-fee pricing model. This means the agency will charge a fixed amount for management and other services that you require.
This usually starts from £360 per month for management. And that will usually be for smaller campaigns with less spend and ads and keywords. But it can reach thousands of pounds each month for larger accounts with multiple campaigns and high spend.
So, this fee remains constant regardless of your ad spend or campaign performance.
– this provides you with great predictability as you’ll know what you’ll be paying each week, month or year.
– helps you to easily budget your online marketing spend and calculate your return on investment (ROI)
– this is the right model if you have consistent advertising budgets and straightforward campaign needs.
– this pricing option is not ideal if you have fluctuating ad budgets or if you’re looking for a more performance-based fee structure.
3. Performance-Based Pricing
Performance-based pricing for PPC agency services is now becoming more popular as advertisers look to work with the best performing agencies.
With this option, the agency’s fees are linked to specific performance goals and metrics that you’ll have agreed upon.
For example, the agency will agree to a Google Ads management fee based on achieving a certain return on ad spend (ROAS) or sales or leads target that’s relevant for your business.
– pay only for results
– it aligns the agency’s incentives with your desired outcomes and business goals
– provides a clear measurement of the agency’s value based on tangible results
– can be harder to implement
– challenges tracking sales or leads make this a difficult pricing model to implement
– may require careful negotiation and agreement on the performance metrics and targets
– could lead to higher fees if your agency consistently meets or exceeds performance targets, but this could be a win-win for both parties.
4. Hybrid or Customised Pricing
A hybrid or customised pricing model provides more flexibility for PPC agency services. So, it provides a combination of the pricing models mentioned above and the agency tailors its pricing to meet your specific needs and preferences.
An example of a hybrid or customised model is a flat-fee combined with a performance-based model. This is quite popular and is used by many agencies and Google Ads specialists.
– allows for flexibility that meets your requirements and preferences
– allows for a more personalised and transparent arrangement
– this requires careful negotiation and agreement between you and the agency to ensure you get the best results while compensating the agency correctly.
These four are the main pricing models for PPC agency services and you’re likely to find one that’s suitable for your business here. And it’s also a good idea to work with the agency to customise the pricing to suit your requirements.