All Blogs,Digital Marketing, - December 03, 2020
How Much Should You Pay A PPC Agency?
Expert Tips For How Much Should You Pay A PPC Agency?
Let’s be real, search engine optimization (SEO) is a crucial component of modern marketing. But while rising up the ranks and getting to the top of the search results list may be vital to your success, it takes time. Sometimes six months or more before you start to see a return on your investment.
Thankfully, there is a more immediate option that can work on its own alongside strategic SEO. It’s called Pay-Per-Click marketing (PPC).
What is PPC Marketing?
Pay-Per-Click marketing is exactly what it sounds like. It is a form of Digital Marketing in which you pay a given PPC Agency per click you receive.
The way it works is straightforward and simple. Your listing comes up through chosen keywords before the organic search results on a search engine’s results page or appears on that engine’s vast network. When a user clicks on your listing, you pay your PPC Agency.
How Much Should You Pay a PPC Agency?
Before we answer the “how much” question, it’s important to be familiar with the different pricing models that PPC management agencies use for billing.
Here’s a brief overview of the three most common PPC pricing models:
- Percentage of Ad Budget Pricing
If you’re shopping for help with PPC, you’ll probably see a lot of agencies using a “percentage of spend” pricing model. Under this model, clients pay agencies a predetermined percentage of their spend on the ads that the agency is tasked with managing.
Good for: Companies with a larger or growing ad spend, given the percentage reduction that comes with a total budget increase. Many agencies that use this model will require minimum spending.
Not great for Smaller companies with tiny budgets. Minimum spends are often associated with this model, so if your budget isn’t big enough, you’ll likely be stuck with some hefty fees to make it worthwhile for the agency to work with you.
- Management Fee + Percentage of Ad Budget Pricing
Many marketing agencies will charge a management fee to cover overheads related to the PPC ad campaigns they’re managing for clients.
Like the first example, this pricing model also uses the percentage of ad spend as its baseline, just with an additional fee.
Good for: Customers who want transparency and ultimate ownership of their accounts.
Not great for Very low-cost accounts. Very small businesses are best served with automated platforms for which a pure percentage of spend makes sense.
- Flat Fee Pricing
Some agencies will charge a flat, pre-determined fee after settling on a scope of work and calculating the static costs related to managing the client’s PPC campaigns. Some businesses prefer the straightforward nature of this model, so long as the activities and services included in the scope are clearly defined.
Good for: Relatively static campaigns and clients who want fixed expenses each month.
Not great for Dynamic campaigns. Many businesses are seasonal and/or use specials to drive business. In these cases, both the management burden and the ad-spend will need to be more flexible.
Now that you know the different types of PPC models answering the question of how much you should spend on a PPC agency is simple, how involved do you want to be?
Are you a small-to-mid-sized business decision-maker who simply wants to see a lift in inbound leads from activities like PPC?
For decision-makers on this scale, the minute details can be tiresome and pull you away from more pressing concerns.
If this is the case, a pricing model based on a percentage of your ad budget probably makes the most sense.
But, if you’re looking to tinker and get hands-on with your PPC ad budget and campaign, you’ll want to look for agencies that itemize their services so you can carefully manage your budget.
Examine your business model, think about your personal preferences, and how aggressive and hands-on or conservative you want to be.
The choice is solely up to you.
As the old poet and philosopher Titus Maccius Plautus once said, “you have to spend money to make money.”
Most important, as with most things in life is communication. it is crucial that you as the decision-maker and the PPC Agency.
You choose are on the same page.
Ensure that your goals and overall marketing objective is clear and understood by everyone involved. Without proper communication PPC and any other marketing will be ineffective.
Marketing is challenging, it takes specialized knowledge and expertise to build a campaign properly targeted to your audience. Let Agency Partner help you now and get the arrow pointing up on your website traffic, clicks, and conversion rates.
Not big on reading? That’s okay. Watch “How Much Should You Pay A PPC Agency?” instead. Using the power of Artificial Intelligence, we turned this blog into a video for you. Check it out below!