How Much Should You Charge for PPC Management?
As a rockstar marketer (agency, consultant, freelancer, or otherwise), you've got to be a renaissance scholar: skilled and learned in many things.
You've got to offer what your clients need. And in 2018, that most definitely includes pay-per-click (PPC) management.
The PPC marketing model works remarkably well, and Google Ads is the godfather of that family. Just how much control does it have? A lot, controlling a full 33% of all online ad revenue…$38.6 billion in 2014 alone, and it accounts for roughly 95% of Google's total revenue. So yeah, it seems to be doing okay (if by "okay" we mean billions in ad spend, billions in revenue, and a huge market share).
To the layperson, success in a PPC campaign can be a complete mystery. It can happen, but they often have no idea why, and would be hard-pressed to replicate it. Mistakes are commonplace. That's where you come in.
As a PPC manager, you avoid the pitfalls and use every successful best practice out there. You squeeze maximum results from each campaign, from each ad group. You polish, refine, and improve, day in and day out. And for that, you expect and deserve to be paid.
But how should you determine your pricing, and how much is fair?
We'll go over the different PPC pricing models in this article, and the advantages and disadvantages of each.
Or you can also download our free PPC proposal template. Not only will it give you a great base for pitching your sevice, but we have a page dedicated to each pricing model.
The Candidates: Payment Models
Let's get this out of the way from the get-go: PPC management is not and should not be cheap. It can run anywhere from $250-$1500 per month on average. In can get much, much higher. In this sphere, the maxim that you get what you pay for has never been more accurate. Anyone can charge $100, slap together something that will never do anything, and spend that money on string-in-a-can and hacky sacks (or something else equally silly).
But you're a professional. And your payment structure options are many.
Candidate #1 – The Flat Fee
This one is tricky to pull off in your early days as a PPC deity, as it requires a bit of experience to determine the likely time and effort each account will need. Once you're able to accurately estimate, though, it does bring in a steady and reliable paycheck…always the same amount regardless of the fluctuating workload. You can always revisit your price if the client drastically changes budget or requirements.
Candidate #2 – The Hourly Rate
This is considered a recipe for poverty within the freelance community. The prevailing wisdom is to always work by project and never by hour.
Clients often love this model, though, as it's easy to see a direct correlation between how much work you're doing for them (the number of hours you bill), and the cost to them (those hours multiplied by the hourly rate).
That said, you're basically penalizing yourself if you work efficiently and reduce the amount of time you spend on each campaign. Try an online hourly rate calculator to give yourself a ballpark figure if you're curious.
Candidate #3 – The Percentage of Ad Spend
This is the industry norm, with agencies charging anywhere from 10-20% of total ad spend. Smaller operations might fall on the lower end with an account minimum to cover costs.
There's a misconception that this model "punishes" the client for increasing their budget. While it's true that the client has to pay more as they increase budget, the PPC manager also has to work harder to find new opportunities and manage larger campaigns. Larger budgets generally involve more work.
Also, with a bigger budget, you should be generating more leads. Therefore, you're bringing more value to the client, and should be charging accordingly. When you charge based on ad spend, you're essentially adding a markup to every lead generated.
For example, say you're charing 10% of ad spend. The CPA is $40 in Google Ads. Therefore, the cost to the client is $44. I especially like this model for its simplicity.
Candidate #4 – The Performance Based Fee
Sounds good in theory – you're rewarded for your hard work and success – and clients LOVE it – they pay much less or nothing if you don't deliver the goods – but it typically doesn't translate to the real-world.
As the PPC manager, you're not in control of everything that plays a part in the ultimate success of a campaign. It could work if you had total control over sales, leads, landing pages, checkout, and the sales funnel from top to bottom…but you don't.
Candidate #5 – The Hybrid
Some marketers favor a smaller percent of total spend, plus a base fee for certain repeatable tasks like weekly reports. Others determine their hourly rate, estimate the hours involved for a particular account, then charge that as a flat fee. There's guesswork involved, and some of us are not comfortable with that.
There's a lot to consider. The trick here is to analyze the pros and cons for each candidate as you would when casting a political vote: choose the best fit for you. The percentage model is the most popular, but that doesn't automatically mean it works best in every situation. You're a unique flower.
Even after you decide on a price model, there's no magic dollar figure that you should be charging. There are considerations. A checklist, if you will. Hit them all, and you're able to charge more.
The Considerations: Take a Long, Hard Look in the Mirror
In selecting your price, you need to look at your situation from every angle. Stand your service in front of a full-length mirror (metaphorically speaking) and scrutinize every flaw and shortcoming. Make a list of its best features.
What exactly are you providing? Initial consultation, set-up, analytics integration, keyword research and selection, copywriting, bid management, ad scheduling, reports (weekly, biweekly, monthly)?
Does your service include search term reports, ad performance analysis, restructuring existing ads and creating new ads (groups and campaigns)?
It's all about cost to value ratio. Your clients will spend more if you give them more. So, what else have you got up your sleeves besides Adwords?
Who Do You Think You Are ?
Consider your background and experience.
- How long have you been doing this?
- What evidence of success can you provide?
- Are you Google certified (Google Partner for Analytics and/or Adwords)? Are you an Accredited Bing Ads Professional?
- Do you have dozens of glowing recommendations?
- Do you keep up with new developments and trends in the PPC arena?
If you're new to the PPC game, you can't very well charge the same as an established expert.
Just Google It?
We often incorrectly believe "search" is synonymous with "Google". Heck, we use the term "google" to mean look something up online. But that search engine is not the only show in town.
It is the biggest. Adwords boasts over one million advertisers, and Google gets in excess of 100 billion search queries each month. But does that mean it's the best?
Google controls about 67% of the paid search market in the U.S. compared to Bing at 18%. So it's a no-brainer which network to use, right?
No. As always, it depends on your criteria. Google gets you more impressions, yes, but the Yahoo Bing network can cost up to 70% less per-click, and because of their smaller market share, you're not competing with as many others for those clicks. That's important for many businesses.
The Google vs Yahoo Bing debate isn't going to be resolved anytime soon. And that's okay.
There's room for both…and you should be recommending both to your clients. Better for them, better for you.
If Bing Ads and Yahoo Gemini are part of your stable of services in addition to "just" Google, you can charge more for that.
Let's Get This Party Started
The cost of launching a PPC campaign from scratch is very front-end heavy. It takes a lot of time and energy to get it out of the gates.
If you swoop in and do the heavy lifting from day one, you should consider your set-up fees. You can either charge a hefty launch fee, or you might waive that initial cost to get the ball rolling and bringing in steady income.
Clients generally prefer a lower up-front charge in exchange for a higher ongoing/monthly fee. There's less risk for them, as the real management cost doesn't kick in until the campaign is (hopefully) doing its thing and bringing in revenue.
You, however, may find yourself only breaking even (or even losing money) at this stage, but can look forward to higher profit margins once the campaign is running smoothly. Can you afford to wait it out?
For existing campaigns, you may be called in to take over, in which case you'll start with a PPC audit.
What exactly does that include (campaign settings, ad groups, keywords)? How long will it take you? Are you going to charge for it, or roll it into the monthly management fee?
Be VERY clear about what your clients get, and what they don't get (perhaps offering a wide variety of add-ons they can opt for down the road). The add-on menu works at fast food joints for a reason…different people want different things.
Goal! Goal! Goal!
Of course, no campaign will accomplish anything without clearly defined and identified goals. So, what are they? And does your price ultimately work within your ideal client's budget? Go after smaller fish at first, but remember that they have smaller wallets, too.
Determine Your Minimum Worth
The Tools of the Trade Whether you're a high-falutin' agency with dozens of employees, or a lone ranger on the plains, you have business expenses. List them.
- Software and subscription services like Google Analytics, Wordstream, Optimizely, SEMrush, Clicktale (heat maps, session replays, conversion analytics, advanced insights, management tools), or Crazy Egg…to name just a few that may be in your marketer tool belt
- Office space
- Internet connection, landline or mobile phone service
- Employee salaries (if any)
- Your own marketing
- Personal expenses
- And on and on and on…(there's never a shortage of expenses)
Whatever you charge, you need to pay your bills. So be sure you know how much is enough, and what the industry supports for someone with your credentials (whatever they are) and experience (whatever it is). Look around. Compare yourself.
Are you doing everything the major players offer, or are you a more budget-friendly option? Both have their value.
Bottom line? Successful businesses understand that they must spend money to make money, and they understand that a well-run PPC campaign can make them money. People are willing to pay for that…if you know what you're doing. Do you?
If you're emphatically nodding your head right now, then don't be afraid to ask for what you deserve. PPC management is not frivolous, nor is it a luxury. It's a modern business necessity. On average, businesses make $2 for every $1 they spend on Adwords.
Top-flight management providers can demand top-flight fees. The best are providing a robust service that includes Adwords, the Yahoo Bing Network, and Facebook Ads (or some other paid social platform).
The best can do it all (but don't necessary bundle everything together). The best ask the right questions and have the right answers. The best are ready to deal with whatever the industry throws at them. Are you?
Can you deliver increased traffic? Higher conversions? And a solid ROI? Then you should be paid for that handsomely.
Ready to get started? Download our free PPC pricing & proposal template and start pitching clients!