After a three-month hiatus, we’re back!
There were a lot of really good questions out there, but this one from Phil of Trumbull stood out:
“What is the average amount that companies get for running a PPC campaign?”
Account management fees vary widely; It is understandable that you would like to have a baseline on how much PPC agencies/consultants should be paid.
However, there are a number of different factors that affect the cost:
- What is the seller’s level of experience?
- How much do you require the seller to have creative/artistic assignments?
- Is this one channel or more?
- Are you paying them to be a strategist/part of your team?
All of these factors influence the cost of a partner, and there is no right or wrong answer as to how far “expensive” or “cheap” you should go.
What is important is that you set reasonable expectations for your vendor and the campaigns they will create/manage for you.
How do PPC sellers usually charge?
Engaging a PPC vendor (whether it’s for Google, Microsoft, LinkedIn, Facebook, TikTok, or other channels) means you don’t have the time to do the technical tasks or customize the strategic planning for those channels.
When balancing a seller’s cost, it’s important to consider how much it would cost if you did the same work (for example, how many hours these tasks would take x your hourly salary).
Hiring an agency or vendor is often much cheaper—but not always.
Flat rate + percentage spend
The most common management fee is a flat rate plus a percentage of the spend managed, or just a percentage of the spend. Sometimes the ratio changes based on investment spending; Other times, it will be fixed.
Agencies will usually specify the overhead they need to cover and ensure that the administrative fee covers that portion so that the variable can be pure profit.
Typically, fixed management fees range anywhere from $500 to $2,500, with the variable part usually running into several thousand dollars.
The percentages range from 5-13%.
Some vendors prefer to provide more “stability” at a fixed rate over management. Sometimes they’ll bake in advertising spending costs, and other times, they’ll break out spending from management fees.
Typically, you will see this flat rate fee ranging from $2,500 to $10,000 per month. The fee will go up or down based on how much the seller is required to do outside of account management.
Requests that can increase fees include:
- Design ads and landing pages.
- Technical transfer tracking setup.
- Scope mitigation of scale creep.
On the basis of performance
Finally, some agencies and vendors will create a pay-per-client (performance-based) structure.
While this may seem more advantageous, it also means that the seller will own the account.
If you know you’ll never want to own a PPC in-house, this might be a reasonable path forward. Otherwise, you’ll be better served by having an account that you can own (and see the work done for you).
Find out which type of PPC vendor is right for you
While the financial investment is entirely part of it, there are many factors that influence the type of seller you want to be.
If your budget is less than $2,500 per month, you should probably look into software solutions or run your campaigns yourself.
This is not to say that the sellers won’t make sense; However, it is possible to exceed the acceptable overhead by adding a resource on top of the expenditure.
When spending is subject to a lot of fluctuation (especially seasonal spending), fixed pricing may make the most sense.
Accounts with more stable spending paths from fees discounted will often benefit from that percentage of spending offers.
Finding a more affordable seller usually means you invest in a strategist (ie, you shouldn’t be responsible for telling the seller what to do).
Choosing a cheaper seller usually means that you will need to be more direct in the strategy you want the seller to implement.
The final takeaway
There is no “flat” rate for PPC management – just like strategic options, it depends on your level of support and experience.
Do you have a question about PPC? Submit via this form or tweet me at @navahf using the hashtag #AskPPC. See you next month!
Featured Image: Paolo Bobita/Search Engine Magazine