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How Much Should Your Agency Charge for PPC Management?

How Much Should Your Agency Charge for PPC Management

As a rockstar marketing agency, your team has to be skilled in many things.

You've also got to offer what your clients need, and in many cases, that includes pay-per-click (PPC) campaign management. And paid search is no easy feat. Your client's PPC marketing strategy needs to be supported by KPIs like click-through rate while staying aligned with their overall business goals. It also involves perfecting visuals and ad copy for each ad campaign.

The PPC advertising 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 32.3% of all online advertising revenue, and it accounts for roughly 83.3% of Google's total revenue.

To the average person, 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.

As an agency, you avoid the pitfalls and use every successful best practice out there. You squeeze maximum results from each campaign and measure metrics from each ad group.

But how should you determine your pricing, and how much is considered fair?

In this article, we'll go over the different PPC pricing models, as well as how to optimize your PPC management workflows:

Different Payment Models to Try

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 and 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 and throw together a few ads that will likely not do anything for a client's business.

But your agency offers professional PPC services, and your payment structure should reflect that. When it comes to how to build that fee structure, the options are varied.

Model #1 – The Flat Fee

This one is tricky to pull off in the early days of your agency, 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 what your agency will drive for a new client, it does bring in a steady and reliable paycheck. Always the same amount regardless of the fluctuating workload.

Agency Tip: Revisit your agency’s PPC pricing if the client drastically changes the budget or requirements. You don’t want to run the risk of spending countless billable hours for free trying to keep up with their changing demands. 

Model #2 – The Hourly Rate

Most agencies prefer to work by contracted retainer or project rather than by the hour.

However, clients often love hourly rates, 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 penalizing yourself if you work efficiently and reduce the time you spend on each campaign.

For example, if it typically takes your agency 2 1/2 to 3 hours each month to manually create client reports, those are billable hours. They may not be the most effective use of billable time, but they are billable.

Using an automated process to reduce that reporting time to less than an hour will streamline your agency's processes and improve your reporting, but you could "lose" those billable hours.

As a boutique agency, the more time we can save on admin tasks, the more time we can spend doing what we’re best at! - Claire Aldridge, Victory Digital

Therefore, setting your agency up based on on an hourly rate can penalize your efforts to improve workflows.

Model #3 – The Percentage of Ad Spend

As an agency, it's crucial to track your clients' return on ad spend (ROAS) to justify your services. 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 the budget, the PPC agency 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. And how do you showcase those new leads? Through data visualization. Your client’s data should tell a story, so they easily understand the value your agency brings to their business.

When you charge based on ad spend, you're essentially adding a markup to every lead generated. For example, say you're charging 10% of ad spend. The CPA is $40 in Google Ads. Therefore, the cost to the client is $44.

Configure PPC Markup for All Campaigns

Use the AgencyAnalytics PPC markup tool to automatically apply your markup percentage to all ad spend in your client reports.

Model #4 – The Performance-Based Fee

This model 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 on your promises, but it often doesn't translate to the real world.

It can become difficult to stay in control of everything that plays a part in the success of a PPC 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, which is why this model doesn't always work.

Model #5 – The Hybrid

Some marketers favor a smaller percentage of total spend, plus a base fee for certain repeatable tasks like weekly PPC reports.

On the other hand, some marketers determine their hourly rate, estimate the hours involved for a particular account, then charge that as a flat rate. There's guesswork involved, and some agencies 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.

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 your agency will be able to charge more.

Track and analyze your client’s paid advertising metrics in a dedicated dashboard

Try the PPC reporting tool for free for 14 days!

Do Your Competitor Research

In selecting your agency's PPC pricing model, 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, setup, analytics integration, keyword research and selection, copywriting, bid management, ad scheduling, PPC reporting (weekly, biweekly, monthly)? 

It's also important to understand how competitive the market is. If your client is in an uncrowded niche, running effective PPC campaigns will be easier than when the competition is stiff.

Does your service also include search term reports, SEO, remarketing, ad performance analysis, restructuring existing ads, and creating new ads (groups and campaigns)? Do you do complementary services like landing page optimization?

It's all about the cost-to-value ratio. Your clients will spend more if you give them more. So, what else have you got up your sleeves besides PPC management?

What Value Does Your Agency Deliver vs. Competitors?

Consider your agency's background and experience.

  • How long have you been doing this?

  • What evidence of success can you provide?

  • Are you a Google Partner? 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.

Should Your Agency Offer Google or Bing Ads?

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. Google Ads 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 87% of the global search market compared to Bing at 5.53%. So it's a no-brainer which network to use, right?

No. As always, it depends on your criteria. Google will get your clients more impressions, yes, but the Bing network can cost up to 70% less per click, and because of their smaller market share, they won't be competing with as many others for those clicks. That's important for many businesses.

The Google vs. 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 are part of your service offering in addition to "just" Google, you can charge more for that.

Be Clear on What Is Included in Your PPC Service Offerings

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 setup fees. You can either charge a hefty launch fee, or you might waive that initial cost to get the ball rolling and bring 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.

Your agency, however, may only be breaking even (or even losing money) at this stage, but can look forward to higher profit margins once the campaign is running smoothly. Can your agency afford to wait it out?

For existing campaigns, your PPC manager may be called in to take over, in which case they'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 Agency's Minimum Worth

The Tools of the Trade: Whether you're an established agency that's been around for years, or you're just getting started, you'll always have business expenses. Here are a few to consider:

  • Software and subscription services like Google Analytics, Wordstream, Optimizely, SEMrush, Clicktale (heat maps, session replays, conversion rate analytics, advanced insights, management tools), most of which integrate with streamlined client reporting software

  • Internet connection, landline, or mobile phone service

  • Employee salaries

  • Your own digital marketing expenses

  • Personal expenses

At the end of the day, whatever your agency charges, 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.

Conduct PPC competitor analysis for your own agency, as well as your clients!👇

Download Your PPC Competitor Analysis Template

Identify your client's PPC competitors

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5 Ways to Manage Your PPC Workflows

Now that we've discussed different payment models and several considerations to make in determining what to charge, let's look at how to manage your agency's PPC workflows to make them more efficient.

1. Access All of Your Client's PPC Campaigns on One Platform

One of the most important parts of managing PPC campaigns is client reporting. Regardless of how good you are at PPC management, reporting on your results in a professional and easy-to-understand way is crucial to building long-term relationships with clients.

One of the challenges with reporting is that it's not necessarily a revenue-generating activity (although the argument can be made if agencies should charge for client reports), meaning you're not working on improving client results and you're not prospecting for new clients.

Also, PPC management often involves dealing with multiple platforms and data sources. If you're doing your reporting manually, the time it takes to aggregate and presents the data adds up quickly.

For this reason, PPC reporting should be automated as much as possible.

To give you an idea of reporting done right, the 8 sections we've included in our PPC report template includes:

  • Report Summary

  • Google Ads - Campaigns

  • Google Ads - Ads

  • Facebook Ads - Campaigns

  • Facebook Ads - Ads

  • Bing Ads - Campaigns

  • Instagram Ads - Campaigns

  • Google Analytics - PPC Landing Pages

PPC Google Adwords Report Example

Create your own white labeled PPC Report in minutes with this exact template. Start your free trial today to save countless hours on client reports.

2. Add a PPC Markup to Reports

Aside from automated reporting, another useful way to manage your agency's PPC workflows is by using the AgencyAnalytics PPC markup tool.

If your agency decides to go with the PPC markup pricing model, this feature allows you to add your agency's margin to each of our PPC integrations.

AgencyAnalytics PPC Markup Feature

Create an intuitive PPC Report that automatically includes your markup. Try AgencyAnalytics free for 14 days!

Choose whether you want to only show clients the PPC markup, or whether you want to exclude it from your reports and only display the total cost.

Specify a separate markup for each one of your client's PPC integrations, and once configured, the PPC markup will automatically be applied to all your client reports.

Configure an account-wide PPC markup:

  • Click "Edit Profile" in the top right corner of your account

  • Under the "Advanced" tab you'll find the PPC markup feature where you can specify the margin percentage for each integration

  • Choose whether you want to show or exclude your PPC markup by clicking on the Settings slider at the top right of the PPC dashboard

  • Select "Show PPC Markup" or "Exclude PPC Markup" from the drop-down menu

    If you want to learn how to configure different PPC markups for individual campaigns, check out this article from our Help Center.

3. Manage Your Agency

AgencyAnalytics offers a variety of client and staff management tools that make your agency’s PPC processes as efficient as possible. 

PPC Report Example

With an easy-to-use drag-and-drop editor, creating custom PPC reports has never been easier. Try AgencyAnalytics free for 14 days.

Whether you’re looking to hire a freelancer or need to communicate within your internal team, unlimited user controls make collaboration easy and keep everyone on the same page. Create tasks for each campaign, assign them to team members, and track their progress to ensure everything is organized.

Agency Tip:  Add completed tasks to your client’s monthly reports to showcase the value your agency brings to their business.

4. Create Instant Reports

Show your clients that your agency is delivering a return on ad spend and any plans you have to improve their current strategy with PPC reports. Pushing out reports to show that your agency is consistently staying up to date with trends will take up too much time as your agency grows. 

Send out your PPC reports with easy scheduling that features your agency’s logo, brand colors, and URL. Plus, decide if you want to approve each report before it gets sent out if you want to review or address any issues.

AgencyAnalytics Report Schedule Feature

5. Use Tools That Scale as Your Agency Does

AgencyAnalytics has 16 different PPC integrations to choose from, giving your agency the flexibility to test out different platforms for your clients. And when it comes time to create their reports, you won’t need to jump from platform to platform to pull their data. 

combine your facebook ads data with other marketing channels

Summary: How Much to Charge for PPC Management

The bottom line is that 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 Google Ads.

Top-flight management providers can demand top-flight fees. The best PPC management agencies are providing a robust service that includes Google Ads, Bing Ads, and Facebook Ads (or some other social media platform).

The best can do it all (but don't necessarily 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? Better CPC? Higher conversions? And a solid ROI? Then you should be paid for that accordingly.

Streamline your agency’s PPC client reporting processes with AgencyAnalytics. Start your 14-day free trial today.

Christian Sculthorp

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Christian Sculthorp
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