As a rockstar marketing agency, your team has to be skilled and learned in many things. After all, paid search is no easy feat.
You've also got to offer what your clients need, and in many cases that includes pay-per-click (PPC) campaign management. Your clients' account performance will also need a solid marketing strategy. PPC marketing needs to be supported by KPIs like click-through rate, and aligned with your clients' business goals. It 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 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, measure metrics 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, as well as the advantages and disadvantages of each.
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, 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 your company.
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 manager, 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 the budget or requirements.
Candidate #2 – The Hourly Rate
This is considered a recipe for failure within the freelance community. The prevailing wisdom is to always work by project and never by the 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
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. 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. I especially like this model for its simplicity.
As we'll discuss below, one useful feature of AgencyAnalytics is our PPC markup tool, which allows you to automatically apply your markup percentage to all ad spend in your client reports.
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 on your promises, but it often 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, which is why this model doesn't always work.
Candidate #5 – The Hybrid
Some marketers favor a smaller percentage of total spend, plus a base fee for certain repeatable tasks like weekly PPC reports. Others 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 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, setup, analytics integration, keyword research and selection, copywriting, bid management, ad scheduling, PPC reporting (weekly, biweekly, monthly)?
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?
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 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.
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. 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 you more impressions, yes, but the 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. 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.
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 setup 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 an established agency with dozens of employees or a solo freelancer, you have business expenses. List them.
Software and subscription services like Google Analytics, Wordstream, Optimizely, SEMrush, Clicktale (heat maps, session replays, conversion rate analytics, advanced insights, management tools), or AgencyAnalytics… to name just a few that may be in your marketer tool belt
Internet connection, landline, or mobile phone service
Employee salaries (if any)
Your own digital marketing 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.
How to Automate Your PPC Reporting
Now that we've discussed different payment models and several considerations to make in determining what to charge, let's look at one of the most important parts of managing PPC campaigns: 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, 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 present 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:
Create your own PPC Report in minutes with our template. Try it free for 14 days!
How to Add a PPC Markup to Reports
Aside from automated reporting, another useful feature of AgencyAnalytics is our PPC markup tool.
If you decide to go with the PPC markup pricing model, this feature allows you to your agency's margin to each of our PPC integrations.
You can then 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.
You can specify a separate markup for each one of our PPC integrations, and once configured, the PPC markup will automatically be applied to all your client reports.
In order to configure an account-wide PPC markup, all you need to do is "Edit Profile" in the top right corner of your account:
Next, if you click on the "Advanced" tab you'll find the PPC markup feature where you can specify the margin percentage for each integration:
If you want to learn how to configure different PPC markup for individual campaigns, check out this article from our Help Center.
Finally, you can 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:
From there, you can select "Show PPC Markup" or "Exclude PPC Markup" from the drop-down menu:
Create an automated PPC Report that automatically includes your markup. Try it free for 14 days!
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 agencie 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 handsomely.
If you're ready to get started with automated PPC reporting, check out our prebuilt dashboard template here.