PPC campaign management provider payment schemes are not universal. What should you expect in terms of support and expertise? Here is a question that many customers and prospects have and that caught my attention:
“What is the average amount a business spends on running a Google Ads campaign?”
Account management fees can vary wildly. It’s only natural to want a baseline for how much to pay agencies or paid marketing consultants (PPC).
That said, several factors influence the cost:
- What is the experience level of the supplier?
- To what extent do you ask the supplier to take on the creative/technical tasks?
- Is it just one channel or multiple channels?
- Do you pay for them to be a strategist/member of your team?
All of these factors influence the cost of a partner, and there is no right or wrong answer on how much you should spend. What matters is setting realistic expectations for your vendor and the paid marketing campaigns they will create/manage for you.
When you use a campaign manager (PPC) or an agency (for Google, Microsoft, LinkedIn, Facebook, TikTok or other channels), you admit that you do not have the time to perform the technical tasks or to develop a strategy for these channels.
It is important to consider the cost to you of doing the same job (i.e. the number of hours these tasks would take x your hourly wage). Hiring a digital marketing agency or consultant is often cheaper, but not always.
Fixed rate + percentage of expenses
The most common management fee is a flat fee plus a percentage of managed expenses, or simply a percentage of expenses. Sometimes the percentage varies according to the expenses; other times it is fixed. Agencies usually determine the overheads they need to cover and make sure the management fee covers that part, so the variable part can be pure profit. Fixed management fees typically range between $500 and $2,500, with a variable portion typically amounting to several thousand dollars. The percentages vary from 5% to 13%.
Some providers prefer to offer more “stability” with a flat rate for management. Sometimes they will include ad spend costs, and other times they will separate the spend from the management fee. Generally, these fixed costs are between $2,500 and $10,000 per month. Fees will go up or down depending on what your provider needs to do outside of account management.
Requests that may increase fees include:
- The design of ads and landing pages.
- Technical implementation of conversion tracking.
- The management of the extension of the reach.
Finally, some digital campaign management agencies and providers offer a pay-per-lead (performance-based) structure. This may seem like the most beneficial, but it also means that the provider will be the owner of the account. If you know you never want to manage PPC campaigns internally, this may be a reasonable option. Otherwise, you’ll be better served by having an account that you can own (and see work done on your behalf).
Know which type of PPC provider is best for you
Although the financial investment is absolutely part of the process, there are many factors that influence the type of provider to choose. If your budget is less than $2,500 per month, you should probably consider software solutions or manage your campaigns yourself. That doesn’t mean vendors aren’t a good option; however, you will likely exceed the acceptable overhead by adding a vendor on top of the expense. When expenses are subject to a lot of volatility (especially with seasonal expenses), flat rate pricing may make the most sense. Accounts with more stable spending trajectories will benefit from the often reduced fees that the spend percentage offers. Going for a more expensive provider usually means you’re investing in a strategist (i.e. you shouldn’t be responsible for telling the provider what to do). Going for a cheaper provider usually means you’ll have to be more upfront about what strategy you want the provider to implement.
There is no “fixed” price for managing PPC campaigns – just like strategic choices, it depends on the level of support and expertise.