Pay per click management fees are typically charged as “percentage of click cost” or by “actual service required” methods to determine a fair method to both the client and the PPC manager.
Either way, you can get a fixed monthly management cost.
I advise you on the best method after reviewing your account and your goals. Ultimately, I will let you choose between “actual-service” or “percentage-of-spend” if you have a preference.
Let’s first look at PPC management based on actual service and hourly rate.
PPC Management Based on Actual Time Spent for Servicing
With this method the monthly spend is dependent on four primary areas:
- The level of management
- The size of the account
- Your advertising goals
- The number and frequency of reports
1. Management Level
Many approaches can be taken to the amount of time allocated to account management.
If you want the account to be just “monitored and adjusted”, that is one level. If you want it to be a entity that continually tests new experiments to improve ROI (return on investment) and grow to include more leads volume etc, as your company grows, that is another level.
For instance weekly “monitoring” may take roughly an hour per week, which you then multiply by 4.5, the average weeks in each month over the course of a year.
I don’t usually recommend daily monitoring, because if making adjustments daily there is not enough perspective to see trending. If you’re immersed in the day to day numbers of incremental costs per click you’re not doing yourself any favors.
But choosing monitoring is just one approach – a minimal approach, which amounts to babysitting the account.
You may also take a more aggressive approach to grow your account and get all you can from it. This may take 4 hours a week, for example.
This aggressive approach may be to spend time on things such as A/B testing of writing new ads or landing pages, or analyzing negative keywords, each month, or to visit the site once a week, or twice week.
To illustrate let’s look at a mature account that is under control and falls into a nice comfortable spot in the bidding flow of your industry. You could reduce the cost of your monthly maintenance – if you were satisfied with the amount you pay for clicks and the results you are achieving.
Most companies want to continue to improve the results they are getting until they cannot improve it, therefore the management fee has to be set at a level that allows growth of the model.
This growth management is where monthly activities such as A/B testing come into play. That is where you test one thing (item a) against another (item b) simultaneously to see which gives you better results. Your account can improve the more you determine what works best through constant testing.
That means testing the form of your phrases, the wording in your ads, the times of day the ads show the geographic areas, the bid amounts, your landing pages and more.
As long as you are making more from your advertising than the amount you are spending, you should keep exploring ways to gain small advantages in your account.
2. Account Size
The size of the campaign makes an impact on the management fee, in terms of:
- how many key phrases,
- how many ad groups, and
- how many campaigns,
The size is also affected by multiplying it across how many things you are tracking, such as how many devices or the day of the week changes or the cost report, quality scores, the rate at which we add negative keywords, etc. are a major factor in what drives the cost for PPC management.
The larger sized accounts naturally require more time to manage.
3. Business Goals
Some common account goals include:
- brand reinforcement (getting as many ad views as possible)
- driving traffic to your website (getting as many clicks as possible)
- getting sales or sign ups (converting clicks into direct sales)
Brand reinforcement alone is less time consuming than driving traffic to your site with the lowest bids, for example.
So, the more ambitious your goals, the more your management investment may be (as well as your click investment).
4. The Number and Frequency of Reports
The more reports you want me to generate on your account, the more it costs. And, the more frequently you want those reports, the more it costs.
Also, if you want the reports analyzed and summarized, vs simply having a report emailed to you for your own analysis, the management price reflects it.
Don’t worry, if you don’t need or want reports, rest assured I am still doing an ongoing analysis of what is happening with your account at any point in time.
So what determines your budget for “time spent” is the result of those four main elements.
Feel free to call Jon at 720-520-0639 to discuss the intricacies of this method, if you are interested in learning more. But, honestly, you don’t need to worry about all of that, I will keep it simple with a low monthly quote.
Management Investment as a Percentage of Spend
Many search advertising agencies use the “percentage of the amount spent” by the client on clicks to charge for management.
Typically that method is used for large sized accounts, spending over $10,000 a month. It uses different percentages for different sizes and/or phases in the account life. This could range from 10% to 30%.
An example would be if your budget for clicks was $10,000 per month, you might pay $1,000 management fee for a mature account, or $2,000 for an account that is still evolving.
The percentage of spend method is a carryover from traditional ad agencies who are used to charging a percentage of spend for advertising costs such as production costs and insertion rates.
For large accounts this is simply easier for both client and agency to work with. And, I am happy to work that way if you prefer.
Why the Percentage of Spend Model is Not Always the Best Answer
“Percentage of spend” model for PPC management is an easy barometer for the company itself to determine total cost of clicks and management before contacting a pay per click manager to see what their expertise is and what they believe your account needs.
If you’re sitting on a $10,000 budget for your click spending, you can expect to pay something in the range of 10% to 30%, depending on your number of keywords, and the cost of key phrases.
More phrases almost always equals more management fee, if all else is equal (such as cost per click), in order to pay closer attention to the details of each phrase and ad performance.
Often times I am asked “what will it cost to create a campaign, and how much to manage it?”. This question ignores what your campaign looks like, and what life-stage it in. So, I may start by saying “20% of your click budget is a decent starting estimate”.
You could stick with that and it would be fine, but you might miss out on some opportunities due to running out of management budget.
For example, I can manage a campaign for as little as $100 a month; if it’s a small campaign with a handful of search phrases, regardless of the spending on clicks, $100 can be extremely effective. A five hundred phrase campaign would not be effectively managed for $100.
So when you contact me, I will make a suggestion as to the amount that would be best for your particular campaign. Then together we can determine if what you want to spend will be sufficient to meet your goals.
Bottom Line – Fair Monthly PPC Pricing
I can give you a quote based on the size, or anticipated ultimate size, and the other factors listed above and together we can determine if a monthly management based on hourly or percentage of spend is best for you.
Either way, I will provide you with excellent service at an excellent value with a fixed monthly budget. Then as your leads turn into clients you can invest more when it makes sense, up to your comfort level.
Call Jon at 720-520-0639 to get started.