How Much Do PPC Agencies Charge
Determining a PPC pricing structure for clients depends on the industry and various other facets. If the industry is competitive, or if the campaign needs significant development this will influence pricing. Some agencies may charge a percentage of your ad spend, while others may charge a flat rate. It’s difficult to determine a specific answer to this question, as there is no set fee across industries.
In our experience here are the top 3 ways PPC agencies charge.
At Legacy Media Partners, our retainer is a minimum of $10,000 / Month and scale upwards to $50,000 / Month in management fee’s. We determine this by advertising budgets, responsibilities and expectations that are demanded by the client. A PPC agency isn’t ONLY running ads, they are acting as a technical and marketing team for the client. This way the client can market their product effectively. A PPC agency is advising on the advertising strategy, funnel setup, the targeting that is needed to reach the clients goals, and split testing ongoing campaigns. This is the reason for monthly retainers, as the delivery inside of a campaign can become a huge undertaking for a PPC Agency.
Often, a PPC agency is either directly managing the creative development of campaign assets, or advising the internal teams on creation. Most designers don’t know how to create marketing assets, and marketing then has to consult and train the internal teams.
We found it is best to work with a client’s internal teams. Your teams get trained in marketing because they work along side us, through osmosis. If they’re a part of a scaling campaign they get to understand the in’s and out’s of what it takes to scale.
Percentage of Ad Spend:
PPC agencies can also calculate a retainer by the percentage of advertising spend. Generally we charge 20% of ad budgets beyond $1M in ad spend. Keep in mind we are a premium PPC agency. Some agencies charge 10% or less.
We approach this model if the client has all of their digital assets wired in. Wired in meaning, the client has already tested a ton of their marketing, and they have a proven process that is currently working. They desire an agency to come in, and spend more of the advertising budget. Management of large advertising budgets can be extremely difficult. Many clients don’t take into consideration, as you scale you will see cost increases of approximately 10-15% on your overall lead cost, conversion cost and CPA.
Example: Advertising budget is $1,000,000 x .2 = $200,000 / 12 months = $16,666/Month
Performance Based Model:
There are two ways a performance based model can go.
The client shares a % of the profits from a campaign generated, or the client pays for a specific amount of leads in bulk that they then pass to their sales teams. A company that we know that does high-quality performance based lead generation for sales teams is Leads Hunt.
The challenge with a performance based model on an unproven campaign, is the agency takes on an enormous risk. Most clients do not have their marketing assets solidified before the agency comes in to deliver. If a client has split tested digital assets, and they can provide empirical data…then this can be a consideration. It’s very rare that a client has all of their marketing wired in, and a robust enough tracking system to define every detail and touchpoint of the customer journey.
When doing a performance based model, the client needs to reveal their financials to an agency. An agency should be basing their performance model on gross revenue and not net revenue. This is a very trust based model that needs transparency.
It is extremely difficult to give a “one shoe fit’s all” answer to this question, but if you’d like to find out more about us, click the big purple button below and we will gladly take a look at your campaign.
Troy is the CEO & CIO at Legacy Media Partners. We manage large media budgets, and solve complex scaling issues that Mid-Market companies always face. In 2021 we added $7.6 Million in additional profits to our client’s bottomline.
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