Discover the key factors shaping PPC management costs in 2024. Explore vendor experience, scope of work, channels, and strategic involvement.
If you were wondering how much you should pay for your PPC management company, you are in the right place. In this article, we will explore the factors that influence PPC management pricing and provide insights into the average costs in 2024.
Several factors influence the cost of PPC management services. It is important to consider these factors before selecting a PPC vendor. These factors mainly have to do with the amount of work and experience your PPC manager will have to undertake on your behalf and the experience they bring.
How is 2024 different? Well, not much, but with the emerging AI technology and Google gradually moving towards automation, management budget allocation would be somewhat different. Regardless, don't get too excited, the market demand still dictates the price, and it's not a whole lot different than it used to be - at least not higher.
The level of experience and expertise of the PPC vendor can greatly impact the pricing. Vendors with a proven track record and extensive industry knowledge may charge higher fees due to the value they bring to the table. On the other hand, less experienced vendors or freelancers might offer more affordable rates.
The extent of the tasks and responsibilities assigned to the PPC vendor also affects the pricing. Some vendors may solely handle account management, while others may provide additional services such as ad design, landing page creation, or technical conversion tracking setup. These additional tasks can result in higher fees. The niche you are in could also affect cost. PPC for home improvement companies may not cost as much as it would for lawyers, or as much as PPC for SaaS companies. It is always a good idea to request a list of service the management fee cover.
The number of channels included in the PPC management services can influence the cost. Managing campaigns across multiple platforms like Google, Microsoft, LinkedIn, Facebook, or TikTok requires additional resources and expertise. Consequently, the more channels you include, the higher the cost may be. Note: If you are paying a percentage of your spend, your management dollar amount cost would, of course, be higher, but you should be able to get a better rate for management overall.
Consider whether you are seeking a PPC vendor solely to manage your campaigns or if you want them to contribute as a strategist or be part of your marketing team. This is the difference between a flat $500 deal and someone who takes a percentage of your spend, which usually starts at a few thousand dollars monthly. Vendors offering strategic input and guidance charge for the extra time they spend strategizing, researching, developing, integrating, etc. I would highly recommend staying away from PPC agencies who offer just running your account... it's much more than that to make PPC work for you.
Now that we have discussed the factors influencing pricing, let's explore the common pricing models used by PPC vendors:
Percentage of spend is the most common pricing model for PPC management. While the monthly charge is fixed, it is based on average monthly spend. Usually, if it exceeds a certain amount, the vendor may ask to adjust the management fee.
Some vendors offering (still) flat rate pricing model. This approach involves a fixed monthly fee for the PPC management services, which may or may not include the ad spend costs. Flat rate fees can range from $2,500 to $10,000 per month, depending on the vendor and the scope of work involved. Here too, I would make a recommendation: steer clear of PPC management agencies that invoice you for both the ad cost and management.
In the performance-based pricing model, vendors charge based on the number of leads generated or the desired outcomes achieved - careful from quality decline! This model can be advantageous if you do not intend to manage PPC internally, as the vendor takes ownership of the account. However, if you prefer to have control over your PPC campaigns, other pricing models may be more suitable.
As AI takes over many of the tedious small tasks PPC managers handled (or outsourced), they are now at a low cost and done at lightning speed. The major difference this year is the upgrade in efficiency, which leaves PPC managers more time to invest in research and strategy. The most common pricing model was and still is the percentage of spend at a fixed cost monthly. That means you and your PPC agency will decide on a spend budget, and you'll be charged a fixed amount out of that cost regardless of if the actual spend fluctuates a bit. If it changes more than 10%, most agencies will adjust the management rate as well.
Selecting the right PPC vendor is crucial for campaign success and budget optimization. If your budget is limited, explore cost-effective software solutions like adalert.io or in-house management with periodic consulting. Assess the stability of your ad spend; fluctuating budgets may benefit from flat-rate pricing, while stable ones can find value in the percentage of spend model. Determine the level of expertise and strategic input you need; experienced vendors can provide valuable guidance, but if you have a clear strategy, a more affordable option may suffice. Making the right choice aligns your budget with campaign goals.
Do not agree to any agency invoicing you for both ads and management. This pricing model was used by agencies who were concerned about audits and didn't want to give clients access to avoid questions. Unfortunately, this model has been abused by dishonest companies and freelancers. I suggest asking for a percentage-based pricing model and adjusting it quarterly as necessary. Performance-based (PPP) is also a good option if you're certain your lead quality won't be affected, but this is rarely a case.