Are you looking for paid search services and wonder how much do PPC agencies charge?
PPC campaigns can be extremely successful. Paid advertising returns $2 for every $1 spent – a 200% ROI rate. but often times it is difficult to understand why a campaign was successful and how to replicate that success.
By leveraging the services of a PPC agency, you have the experience and knowledge to avoid pitfalls and use best practices to get maximum results from each campaign. They measure metrics from each ad group so that you can continually improve your campaigns and get maximum ROI.
But how much do PPC agencies charge for their services?
Top 4 Pricing Models – How Much Do PPC Agencies Charge
PPC management is not, and should not be cheap. It can run from $250-$1500 per month on average; however, it can get much higher.
In this instance, the saying that you get what you pay for has never been more accurate. Anybody could charge $100 to assemble ads that would likely do nothing for their client’s business success.
In this article, we’ll go over the different pricing models so you can know how much do PPC agencies charge.
The Flat Fee
Flat fee of $500-$4,000
After coming to an agreement on a scope of work and figuring out the costs related to managing the client’s PPC campaigns, some agencies will charge a flat fee.
Some businesses like this model because it is more straightforward, as long as everything that is supposed to be included in the scope is defined upfront.
The management fee plus percentage model is often simplified into a flat fee. This flat fee calculates the value that would accrue from the percent of spend.
This type of campaign is good for those who want fixed expenses each month, and whose campaigns are not subject to much change. It might not be the best option for businesses that are seasonal or use specials to drive business, as they will need a more flexible management style and ad spend.
Percentage of ad spend pricing
A 15%-30% of your ad spend
You will most likely come across many agencies that use the “percentage of spend” pricing model when shopping for PPC help.
Under this method, clients pay the agency a pre-determined percentage of their total ad spend. As a general rule, the agency’s percentage decreases as its workload gets bigger; however, that is not always true.
Companies that spend more on ads or have growing ad budgets will save more money with this model since it involves a percentage reduction. However, many agencies using this model require a minimum spend from companies they work with. So, if your budget is small, you’ll probably end up paying high fees to make the agency’s services worth their while.
Management fee + percentage of ad spend pricing
$500-$1,000 + 10%-20% of your ad spend
Some marketing agencies will pad their contracts with a management fee to make up for the extra overhead they incur while running PPC ad campaigns for clients.
Like before, this pricing is percentage-based, but with an additional charge.
Customers who want transparency and ownership of their accounts will benefit from this model.
On the downside, very small businesses that would be best served by automated platforms may not fit well into this model because it generally requires more money upfront.
Performance-based pricing
$30-$500 per conversion
The final PPC pricing model is the “performance-based” model.
In this case, businesses typically pay for leads that come in from phone calls, emails, form conversions, trial signups, demo requests etc.
Sometimes agencies will work on commission under this model as well and get a small percentage of revenue from sales that are closed where they can claim responsibility for lead origination. This type of pricing model is most often seen with ecommerce or referral-based business models and goes by the name “CTA Pricing Model”.
Today’s PPC Rates
Using the PPC pricing models above, let’s take a look at how much do PPC agencies charge
The rates shared below represent the average in the PPC world.
1. Percentage Of Ad Spend
Charged rates of 15 percent or less are not incredibly common among agencies, but media conglomerates that appear promising to advertisers can offer such terms by utilizing kickbacks, or performance incentives. Agencies typically charge 20 percent or more to manage PPC campaigns.
Questions to ask PPC Agencies
- Will the agency be updating ad copy?
- Building landing pages?
- Rotating ads?
Some agencies feature these PPC service offerings in a buffet model while others are more focused on à la carte or pay-as-you-go, where each activity is outlined as its own line item monthly invoice.
2. Percentage Of Ad Spend + Management Fee
Monthly management fees are a set, flat price that could be related to activities like changing ad copy, rotating ads, or creating landing pages.
Depending on how much work is needed to manage a company’s PPC campaigns monthly, the fee can be different each month: Typically no less than $500 per month but also up to $5,000 or more per month.
Questions to ask PPC Agencies
- How do you approach local paid search objectives?
- Can you share any local PPC results you’ve produced for similar businesses?
- We want to reach our local community. Can you tell me a bit about how that works?
- How do you measure the success of location-based keywords?
- Do you use bid modifiers for location-specific queries?
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