To your average client, success in a PPC campaign can be a complete mystery. It happens, but they often have no idea why and would be hard-pressed to replicate it.
That’s where your agency comes in. You avoid the pitfalls of wasting precious PPC budgets and use every successful best practice out there to create consistent results. You create poignant ad creatives, squeeze maximum results from each campaign, measure metrics from each ad group, tweak, and repeat.
But each one of your client accounts is different, needing different services and workloads. So how should you determine your agency’s PPC management pricing, and how much is considered fair?
This article will equip you to decide which PPC management pricing model is best suited for your agency and is chock-full of advice straight from marketing agency execs to help you evaluate your options.
In this article:
The State of PPC in 2023
Despite getting slightly less of a share in the market compared to recent years, Google still maintains a lot of control, taking up 28.8% of the online advertising pie (and over half of US digital ad spend alongside Meta).
The PPC advertising model works remarkably well, delivering fast results compared to any other marketing channel. And Google Ads is the godfather of that family.
How Much Does PPC Cost in 2023?
Today, your average small and medium-sized business clients can expect to spend around $9,000-$10,000 per month on PPC. That’s about $108,000 to $120,000 per year.
Cost per click (CPC)
$2.59 / click
Cost per mille (CPM)
$3.12 / 1000 impressions
$0.66 – $1.23 / click
PPC management: Tools
$15 – $800 / month
PPC management: Services
$350 – $5000 / month or 12-30% of ad spend/month
PPC management: Ad spend
$300 – $100+ million / month
The average costs for PPC are $2.59 per click and $3.12 per 1000 impressions. And, of course, it all depends on the ad platform.
Comparing CPC In Different PPC Channels
$1 to $2 per click*
Google Display Network
<$1 per click
Google Search Network
$1 to $2 per click
$1.54 per click
$0.44 per click
$0.66-$1.23 per click**
*and upwards of $30-$40 depending on the industry (think legal and dental). The bonus is that you only pay when people click the ads.
**Companies spend roughly 10 percent of their ad budgets on remarketing.
Should Your Agency Offer Google or Microsoft (formerly Bing) Ads?
While we often incorrectly trade the word "Search" for "Google,” that search engine is not the only show in town.
True, Google is the biggest. It controls 87% of the global search market, getting in over 8.5 billion searches per day, or 255 billion queries each month–compared to 5.53% for Microsoft Ads. And Google Ads boasts over one million advertisers.
So it's a no-brainer which network to use, right? Not necessarily. As always, it depends on your criteria.
Sure, Google will get your clients more impressions, but the Microsoft Ad 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 of your clients who are trying to grow their business on a budget.
The Google vs. Microsoft Ads debate won’t be resolved anytime soon. In fact, there’s room for both. And you're probably going to be diversifying your platforms even more as social media ad spending continues to rise:
For agencies that are new to the PPC game, you can't very well charge the same as an established expert. But if Microsoft Ads and Facebook Ads, for instance, are part of your service offering in addition to "just" Google, you can charge more for that.
Different PPC Pricing Models to Consider
Anyone can charge $100 and throw together a few ads that will likely not do anything for a client's business. Your agency offers professional PPC services–and your payment structure should reflect that.
But when it comes to how to build that fee structure, the options are varied, so we’ve surveyed our agency clients to determine how they charge for their services–and why.
Let's explore the following ad agency cost based on PPC pricing models:
Percentage of ad spend
PPC Pricing Model
Predictable pricing and billing transparency.
Doesn’t factor in that some accounts require more attention than others.
Serves clients based on their needs and budget.
Penalizes the agency if they are working efficiently and reducing the time spent on each campaign.
Percentage of Ad Spend
Correlates with the impact of the agency’s management work.
Focuses on growing the investment which doesn't place the client's interests first.
Works in theory, as clients love this concept.
Doesn’t work in practice as PPC management has many moving parts that are unpredictable each month.
Flexible pricing based on each client’s needs and requirements.
Complicated billing when there are individual deals for each client.
Model #1 – The Flat Fee 💵
A flat rate pricing model can be a good option for agencies that want to provide clear and predictable pricing to clients while also streamlining their own internal processes.
– Justin Hoffman, Founder and CEO of Web Solutions Firm
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 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.
Though the budget will determine the number of campaigns we are able to manage for a client we feel that a flat fee model is the easiest way to stay transparent in our relationship with clients verse a percentage of ad spend as that may not warrant any additional work.
– Adam Huycke, Owner at Peritive Digital
Adam Huycke, Owner of Peritive Digital believes in keeping it simple and being ultra transparent: “Clients want to be able to trust you with their money, make it easy for them to do so by eliminating fluff data points and focusing on what really moves the needle.” He adds that your client reporting needs to be “simple and be ultra-transparent. Clients want to be able to trust you with their money, make it easy for them to do so by eliminating fluff data points and focusing on what really moves the needle.”
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.
Justin Hoffman, Founder and CEO of Web Solutions Firm, recommends basing your PPC pricing on the value you can deliver to your clients rather than just your time or costs. "Instead of pricing your services solely based on the number of hours you'll spend on a campaign or the amount you'll spend on advertising, consider the potential ROI your clients can achieve through your PPC services. This could include factors like increased leads, sales, and revenue, as well as improved brand awareness and engagement."
By pricing based on the value you can deliver, you'll not only be more competitive in the market, but you'll also be able to show your clients the true impact of your PPC services on their business. This can help build stronger relationships and lead to more long-term, high-value clients.
Justin Hoffman, Founder and CEO of Web Solutions Firm
Model #2 – The Hourly Rate ⏱️
We implemented an hourly charge model as it helps us serve our clients based on their needs and budget.
– Christopher Ryan, CEO at SIX Marketing
Most PPC 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).
“If an account requires more attention to increase performance, our clients know it will likely accelerate growth,” says Christopher, adding, “if we have strategy dialed in and we are mostly optimizing the campaigns, that provides us the ability to focus on other channels.”
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 2.5 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.
Keep all your clients’ KPIs under one roof to stay on top of campaigns. Create client-ready reports in minutes with AgencyAnalytics. Start your free 14-day trial today.
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 PPC agency up based on an hourly rate can penalize your efforts to improve workflows.
Flat monthly fees, or an agreed upon number of monthly hours, tend to apply to campaigns and associated ad groups that are already up and running and just need monitoring, tweaking, and evaluation.
– Gail Snow Moraski, Principal at Results Communications & Research
Model #3 – The Percentage of Ad Spend %
We use it as a pricing guide for Google Ads management, the principle being the greater the Ad spend the greater the complexity and impact of our management work.
– Richard Jaggs, Founder at Resolution Design
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 their PPC budget, the PPC agency also has to work harder to find new opportunities and manage larger campaigns. Larger budgets generally involve more work in managing PPC campaigns, and 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.
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 💵⏱️%🏃♂️
Our pricing varies by client & media buy because it depends on their ad spend level. If the spend is lower, we charge a flat fee. If the spend is higher, we use a percentage of our commission.
– Samantha McCanless Dettmer, President at Steel Advertising
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 managing a particular PPC campaign, then charge that as a flat rate. There's guesswork involved, and some PPC agencies are not comfortable with that.
We charge some clients an hourly rate to manage their PPC campaigns, and therefore, invoice them at the beginning of any month for the # of hours incurred the previous month times our hourly rate, but also charge some clients a flat monthly rate. Ultimately the two models aren't so different because we always have a general.
– Gail Snow Moraski, Principal at Results Communications & Research
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.
We have fixed fees for the campaign set-ups and then we do charge a percentage of the ad spend. We just found that this percentage usually works well with the estimated time it would take to work on the campaigns on a monthly basis.
– Blake Baxendell, CEO at Wahha Design
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.
How Do Agencies Price Their PPC Services?
Let's get this straight: PPC management services are not and should not be cheap. It can run anywhere from $250 to $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.
Below we’ve broken it down into three considerations when setting your agency’s PPC management pricing:
1. Do Competitor Research: What Value Does Your Agency Deliver vs. Competitors?
In selecting your agency's PPC pricing model, you need to look at your agency 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?
The biggest challenge is differentiating from more affordable but poor quality services being offered by so many freelancers or small firms who don't have a very high skillset.’Trust me, we're different’ doesn't really work. They've heard it before.
– Lane Anderson, Founder & CEO of London Road Marketing
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?
2. Determine Your Agency's Minimum Worth
The Tools of the Trade: Whether you're an established PPC 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) and other SEM tools –most of which integrate with streamlined client reporting software
Internet connection, landline, or mobile phone service
Cash flow requirements
Your own digital marketing 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.
Not sure where you stand at this moment in time?
The competition’s always changing, so conduct a PPC competitor analysis for your own agency, as well as your clients!👇
3. 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.
Typically, PPC management services involve:
Performing a full competitor analysis
Planning the campaign strategy
Copywriting the ad creatives
Designing the ad and landing page
Testing campaign performance
Tracking marketing metrics and reporting on them with PPC management software
Streamline your PPC Reporting and house all your clients’ PPC metrics under one roof and include your margins in your automated client reports. Try this exact PPC dashboard template with your free 14-day trial today.
Time Is Money, Too
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 PPC cost to get the ball rolling and bring in steady income.
To set up a brand new account with several campaigns, you should expect the agency may need to spend 15 - 25 hours to do that work (including an initial discussion with you about campaign objectives and messaging), particularly if it's a Google search campaign where negative and positive keywords need to be set up, plus various ad assets like site links.
– Gail Snow Moraski, Principal at Results Communications & Research
Clients generally prefer a lower up-front charge in exchange for a higher ongoing/monthly management 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.
With any display campaign, there's the ironing out of images or video to be used, and sometimes, revisions need to be made to an existing website landing page (page ad clickers will land on) or a new landing page set up. Often there's a lot of back & forthing with the client to get their approval to proceed with various images, ad content, etc., as well as work to put results tracking in place. All of the aforementioned takes time.
– Gail Snow Moraski, Principal at Results Communications & Research
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?
Educating clients is often the biggest challenge we face. Their expectations versus the reality of what is possible are often far apart. Clients want something delivered immediately and for it to be perfect. The reality is that great work takes time and care.
– Nick Farnborough, Founder, Clavis
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.
Incorporate goals into your client reports to easily communicate your campaign successes. Try it free on AgencyAnalytics for 14 days.
So... How Much Should YOU Charge?
As a rockstar marketing agency, your team has to be skilled in many things. That means you often offer what your clients need, and in many cases, that includes pay-per-click (PPC) campaign management.
But paid search is no easy feat.
Your PPC marketing strategies should be supported by KPIs like click-through rate while staying aligned with each client’s overall business goals. Plus, PPC management generally involves perfecting visuals and ad copy for each ad campaign.
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 Microsoft Ads Professional?
Do you have dozens of glowing recommendations?
Do you keep up with new developments and trends in the PPC arena?
How you price your agency’s PPC depends on various factors, including your size, background, and even the ad channels you use. Your clients may be willing to spend anywhere from $500 per month to the tens of thousands per month on PPC management–it all depends on their budget, conversion goals, and the PPC ROI you deliver.
Download the Free PPC Budget Calculator 👩💻
Using a PPC planning worksheet template will help you plan and decide your clients' PPC budgets.👇
5 Ways to Manage Your PPC Workflows in AgencyAnalytics
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
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.
Create your own white labeled PPC Report in minutes with this exact PPC report template below:
Save countless hours on client reporting. Start your free trial today.
One of the most important parts of managing PPC campaigns is client reporting. And although the argument can be made if agencies should charge for client reports), it's not necessarily a revenue-generating activity.
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.
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.
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.
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 PPC 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.
Having the ability to see which marketing channels are performing or the ability to verify analytics from PPC campaigns gives customers the information they need when it comes to where they spend their marketing budget.
– Ryon Gross, CEO, Local Leap Marketing
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.
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.
On average, businesses make $2 for every $1 they spend on Google Ads. So when it comes to PPC, your clients should understand that in order to make money, they need to spend money.
Can you deliver increased traffic, better leads, higher conversions, and a solid ROI? Then you should be paid accordingly.
PPC management is not frivolous, nor is it a luxury. It's a modern business necessity. And the best PPC agencies are providing a robust service that includes Google Ads and/ Microsoft Ads, and Facebook Ads (as well as other social media platforms).
Read More: How To Price Your Social Media Services
The best can do it all–and tailor their services–and pricing–based on their clients’ needs. Ensure your agency is equipped with the right way to deal with whatever the industry throws at you, and don’t be afraid to test out new platforms.
Combine all your clients’ PPC KPIs into an easy-to-understand dashboard that updates itself automatically, and flip it into a report in minutes. With over PPC integrations to choose from, create custom client reports that clearly communicate the value your agency is bringing. Start your free 14-day AgencyAnalytics trial today.
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