How much should I pay for an agency to manage my AdWords and PPC marketing?

Pay per click and particularly Google AdWords have become essential tools for businesses wanting to increase the traffic to their website in order to generate new sales or leads.

Many small businesses do not understand the technology; finding PPC jargon and the account set-up increasingly complicated. Even when a PPC campaign is set-up correctly, they often struggle to manage their own campaigns effectively; due to lack of time, resources or knowledge.

Google is there to make Google money, so if you do not fully understand principles and techniques such as “quality score”, bid management, targeting, conversion optimisation  etc, you may find that you are paying more than twice the price for each click, and what’s more, each conversion, sale or lead, could be costing you more than you are actually making! If you are trying to manage your AdWords account yourself check out our ‘How to manage your AdWords and the top 10 mistakes‘ post.

To make things more complex you should also be considering other PPC platforms as part of your online marketing strategy, such as Bing and paid social, including Facebook LinkedIn and Twitter!

Small businesses can invest in training and learn to use PPC effectively, or they will need to employ a specialist individual or agency to set-up and manage their account professionally.

In this article we review the types of PPC management services available and how much it is likely to cost to have your PPC account managed by a specialist. We also provide a checklist of what you should look for when recruiting an agency.

The main types of PPC management services

There are 2 main types of PPC management service available to small businesses:

1)      Managed account with separate ad spend and monthly management fee (often with a set-up cost)

2)      Fixed price packages with all-inclusive clicks and management fees (sometimes with a set-up cost)

In addition you may be offered other more specialised models, such as pay for conversions

1) Managed account with separate ad spend and monthly management fee

The most common PPC service is the managed account, where the agency charges a separate monthly management fee from the cost of the clicks, which are itemised and charged separately. In many cases you will be asked to pay the ad spend cost directly, so you will be charged by direct debit or credit card for the amount you spend. Find out more about  Anicca Digital fully managed PPC services

Note: some agencies may not give you access to your account, so they will “own your account”, so they pay your ad spend themselves and charge this fee onto you. In rare cases less scrupulous agencies will inflate the amount you pay for your clicks, as you are not paying the bill it is not possible to see if this has happened!

2) Fixed price packages with all-inclusive clicks and management fees

The all-inclusive packages tend to be aimed at smaller companies that want to spend less than £1,000 per month for everything.  This service is often offered by large Google Authorised Resellers (such as BT and Yell).

Note: With an all-inclusive fee you may not be able to determine how much of your budget is spent on clicks and how much is being spent on the management fee, so where possible you should look for transparent reporting or a minimum number of clicks per month. You must also watch out for dubious schemes where the amount you actually pay is equivalent to very high costs per clicks.

What type of PPC agency will provide a suitable PPC service for my company?

You need to identify a PPC specialist or agency that will provide a suitable service for your company. PPC agencies vary considerably in size and expertise, so they will usually specialise in providing service to clients with a certain ad spend.

1) Freelancers and small/newer agencies:

  • They will tend to target businesses with an ad spend of less than £1000
  • They will often offer a fixed monthly fee of less than £100
  • The time spent on the account  may only be a few hours a month
  • The size and complexity of the account may be limited, for example there may only be 100’s of keyphrases and limited modification to the campaign settings
  • They may lack the expertise to use all the features within AdWords and all the alternative platforms
  • They may be focused purely on generating clicks and may not set-up conversion tracking or link your account to Analytics
  • They may not be accredited, as the AdWords Certified Partner accreditation requires a minimum quarterly spend of $10,000.

2) Mid-size accredited agencies

  • They will tend to target businesses with an ad spend of £500-£10,000 per month
  • They may offer a fixed fee or percentage. Generally the management fees are likely to be more affordable than the bigger agencies
  • They should be able to offer a full range of features and services; with more complex accounts set-ups.  This is likely to include Bing, Yahoo, Facebook and LinkedIn options and possibly call tracking
  • They should spend more time each month on optimising your account
  • Depending on their charging model they may be try to maximise the conversion rate of your account in order to improve your ROI
  • They are likely to have a minimum management fee of £250-£500 per month, which reflects the amount of set-up and time spent on the account
  • The agency should be accredited, probably with 2 or more account managers each managing around 10 accounts/clients.  You should be able to click on their accreditation logo and see the number of accredited staff they employ.
  • They are unlikely to have their own reporting tools or use third party bid management tools

3) Larger specialist PPC agencies (sometimes a division of a larger media or a digital agency)

  • They will tend to target larger customers and may even have a minimum monthly ad spend of more than £10,000
  • They will probably charge a percentage based on spend
  • They are likely to have at least 5 account managers, some may handle multiple accounts or only one account (if it is larger or more complex)
  • They will have their own or third party bid management and other tools in order to handle very complex and large national (and possibly multi-lingual accounts)

PPC management pricing models

Companies that offer ongoing PPC management will adopt different pricing structures:

  • Set-up fee (may be invoiced separately or included in the monthly fee)
  • Fixed monthly fee (often banded according to the size of the ad spend)
  • Percentage of ad spend (typically 10-15%), often with a sliding scale and normally with a minimum monthly amount
  • Hourly rate depending on the amount of work undertaken

The amount you expect to pay per month depends on the following factors

  • Minimum monthly fee will vary according to the size and experience of the agency
    • individuals or small agencies will charge from £100/month
    • larger or accredited agency will probably have a minimum charge of £350-£500 per month,  irrespective of whether they charge a fixed fee or a percentage of spend
  • The total amount you pay will vary according to the amount of ad spend, there is usually a sliding scale or banded fees depending on the ad spend, as this will be indicative of the size and complexity of the account
  • You may be charged in proportion to the amount of work involved or promised each month

Factors to consider when choosing a fully managed PPC service

1) Level of Experience

  • Is the agency accredited?
  • How many accredited staff do they employ?
  • What is the level of experience of the person managing your account?
  • What other pay per click platforms do they offer (other paid search, paid social)?
  • What other services do they offer –SEO, Analytics?

2) Contracts and charging

  • What is the minimum contract period?
  • Do you own the account at the end of the contract?
  • What is their charging model?
  • Will the agency work to get your costs down if they are paid a percentage?
  • Level of transparency –can you see Google reports or only the agencies reports?

3) Technologies used

  • Do they have bid management and/or use their own technology?
  • Are there extra charges for bid management tools and API charges?
  • What reports will you receive?

Find out more about  of Anicca Digital’s fully managed PPC services.

You can call the Pay Per Click team on 0116 2987496 or contact us or via our online contact form below.

Written by

Managing Director

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