Paying for Performance: Assessing
the Impact of PPC Management Costs
Outline
Introduction
Overview of PPC and PPC
Management
What is PPC?
What is PPC Management?
Benefits of PPC Management
Factors That Influence PPC
Management Costs
Campaign Setup and Optimization
Keyword Research and Bid Management
Ad Copywriting and Design
Landing Page Optimization
Campaign Monitoring and Reporting
Account Manager's Expertise and Location
Additional Services like Call Tracking
Average PPC Management Rates
and Costs
Hourly Rates
Monthly Retainer Fees
Percentage of Ad Spend
Tiered Pricing Models
How to Reduce Your PPC
Management Costs
Take On Some of the Work In-House
Use Automation Tools
Hire Freelancers or Agencies in Low-Cost Locations
Negotiate Lower Rates with Your Agency
Evaluating If PPC Management
Is Worth the Cost
Calculate Your ROI
Compare to Other Marketing Channels
Consider the Time Investment Required
Conclusion
FAQs
Introduction
PPC (pay-per-click) advertising
can be a highly effective way to generate leads and sales for your business.
However, properly managing PPC campaigns requires significant time, expertise,
and constant optimization. Most businesses turn to professional PPC management
agencies to handle their campaigns. But what does it actually cost to have a
PPC agency manage your accounts?
In this detailed guide, we'll
cover everything you need to know about ppc management cost including:
- Factors that influence PPC
management fees
- Average rates and pricing
models
- Tips for reducing your PPC
management costs
- Deciding if working with an
agency is worth the investment
Understanding these factors will
help you budget for PPC management and select the best agency for your needs
and budget.
Overview of PPC and PPC Management
Before diving into costs, let's
take a quick look at what PPC and PPC management entails:
What is PPC?
PPC stands for pay-per-click
advertising. With PPC ads, you only pay when someone actually clicks on your
ad. The most popular PPC platforms are Google Ads and Microsoft Ads.
With PPC, you:
- Set a budget and bid on
keywords related to your products/services
- Write targeted ad copy and
design eye-catching ads
- Drive traffic to a specific
landing page on your website
It's an efficient way to get your
brand and offerings in front of motivated searchers on Google, Bing, and other
search engines.
What is PPC Management?
A PPC management agency handles
all aspects of setting up and optimizing your PPC accounts. Typical PPC management
includes:
- Extensive keyword research to
identify high-potential search terms
- Setting up and structuring
campaign accounts
- Writing compelling ad copy
- Designing ads and ad groups
- Bidding on keywords and
managing bids
- Creating relevant landing pages
- Implementing tracking like
analytics and call tracking
- Monitoring campaign performance
and optimizing based on data
- Reporting on KPIs like spend,
impressions, clicks, conversions
- Managing ad spend/budget across
campaigns
It requires both technical PPC
skills and marketing strategy. Most businesses hire an agency so they don't
have to handle this work in-house.
Benefits of PPC Management
Some key benefits that make PPC management
worthwhile for many businesses:
- Generates more website traffic
from relevant searchers
- Increases brand visibility and
awareness
- Allows precise targeting by
factors like location and keywords
- Flexible pricing models fit
different budgets
- Faster results than organic
search optimization
- Detailed performance data for
optimization
- Scales up or down easily based
on your needs
In the right hands, PPC done well
provides an excellent return on investment (ROI) from marketing spend.
Factors That Influence PPC
Management Costs
Many factors impact how much a
PPC management agency will charge for their services. The key factors include:
Campaign Setup and Optimization
- Initial setup of campaign
structure, ad groups, keywords, ad copy, etc. is very time intensive
- Ongoing optimization also takes
significant time
- Monthly or hourly fees often
depend on the projected number of hours required
Keyword Research and Bid Management
- Discovering high-potential
keywords through research
- Setting initial bids and
managing bids over time
- Labor-intensive but vital for
campaign performance
Ad Copywriting and Design
- Writing effective, compelling
ad copy that generates clicks
- Designing visually appealing,
on-brand ads
- Often charged at an hourly rate
based on level of detail required
Landing Page Optimization
- Creating landing pages that
convert visitors to leads
- More complex landing pages
equal higher fees
Campaign Monitoring and Reporting
- Tracking campaign stats and
digging into performance data
- Preparing reports on KPIs each
month
- More accounts and data = more
time required
Account Manager's Expertise and
Location
- The skill level and experience
of the account manager or team
- Where they are located can
significantly impact rates
Additional Services like Call
Tracking
- Services beyond just managing
the PPC campaigns cost extra
- E.g. call tracking to attribute
phone calls or 1:1 consulting
As you can see, the scope of the
PPC campaigns and level of effort involved play a major role in determining
management costs. Next, let's look at typical fees and pricing models.
Average PPC Management Rates and Costs
PPC management agencies use a
variety of pricing models, but they generally fall into four main structures:
Hourly Rates
Some agencies simply charge an
hourly rate for the time spent managing your accounts. Typical PPC manager
hourly rates range from:
- **$50 - $150 per hour** for
freelancers and solo consultants
- **$100 - $250+ per hour** at
digital marketing agencies
Hourly fees give you maximum
flexibility but less predictability on total monthly costs. You may receive a
discount for signing an ongoing contract vs. paying per hour.
Monthly Retainer Fees
Many PPC managers work on a
monthly retainer fee based on the estimated hours required for your account.
Average retainer fees range from:
- **$1,000 - $3,000 per month**
for smaller accounts
- **$5,000 - $10,000+ per month**
for larger budgets and accounts
Retainer fees provide more
consistent and predictable billing but lower flexibility to adjust hours up and
down each month.
Percentage of Ad Spend
Some agencies charge a percentage
commission on your total ad spending budget managed. Typical fees range from:
- **10% to 20%** commission on
total ad spend
- Sometimes with a minimum fee,
e.g. $2,500/mo minimum
With this model, your management
costs scale up and down directly in line with your PPC budget.
Tiered Pricing Models
More advanced agencies use tiered
pricing based on factors like:
- Number of campaigns
- Monthly ad spend
- Number of keywords
- Complexity of accounts
For example:
- $2,000/mo for accounts spending
< $5k/mo
- $4,000/mo for $5k to $15k in
spend
- $6,000/mo for accounts with
$15k+ in monthly ad spend
This allows pricing to better
match the scope of work required. Tiered levels give room to grow without
overpaying early on.
As you evaluate PPC management
agencies, be sure to understand exactly how they charge for their services.
Request rate details and get fee structures in writing before signing any
contracts.
Now let's explore ways to reduce
your PPC management costs.
How to Reduce Your PPC Management
Costs
If the average PPC management
rates seem too high for your budget, here are some tips to lower your costs:
Take On Some of the Work In-House
Consider handling a portion of
the management in-house to offload work from your agency:
- Manage lower-priority campaigns
internally
- Have your team assist with
month-end reporting
- Handle basic ad copy edits or
landing page updates
This lightens the workload for
your PPC manager, allowing them to focus on high-value optimization to drive
more ROI. Just be cautious not to have too many cooks in the kitchen.
Use Automation Tools
Automated bidding, reporting, and
analytics tools can make management more efficient:
- Leverage automated bid
management through Google to save time/resources on manual bid changes.
- Use reporting software like
Google Data Studio to automate reporting.
- Set up analytics tracking like
Google Analytics the agency can access directly.
Discuss available automation
options with your PPC manager. Smart use of technology lets them focus time on
strategic work.
Hire Freelancers or Agencies in
Low-Cost Locations
You can find talented individual
PPC experts and agencies based overseas with lower fee rates, including:
- Eastern Europe - typical hourly
rates around $25-$50/hour
- Asia - hourly fees often
$15-$35/hour
- South America - hourly rates
approx. $20-$40/hour
Just be cautious about
communication challenges and time zone logistics.
Negotiate Lower Rates with Your
Agency
Don't be afraid to negotiate,
especially if you have an established relationship or plan to scale up spend
significantly.
- Ask about discounts for
long-term contracts or prepaid hours.
- See if they offer lower rates
for existing clients.
- Make sure your rates adjust
down as you hit higher tiers.
With some creative thinking, you
can likely get your PPC management costs reduced. Now let's discuss whether
it's worth the investment.
Evaluating If PPC Management Is
Worth the Cost
Given the significant monthly
fees, you need to seriously evaluate if working with an agency makes sense for
your PPC advertising goals. Here are some key factors to consider:
Calculate Your ROI
- Track conversions to see if
your PPC spending generates a positive return
- Measure overall profit vs.
management costs
- Project if an agency could
improve your ROI further
Crunch the numbers to determine
if you come out ahead with professionally managed campaigns.
Compare to Other Marketing Channels
- How does PPC compare to other
options like SEO, email, social media advertising?
- Does outsourcing PPC management
free up resources to invest elsewhere?
Evaluate PPC management costs vs.
returns across your entire marketing mix.
Consider the Time Investment
Required
- Estimate the hours/resources
you currently spend managing PPC or would need to do it well
- Compare that to the cost of
hiring an expert PPC agency
- Factor in opportunity cost of
taking your team's time away from core business activities
For most businesses, near-term
PPC management costs are well worth it to free up their own time and generate
more revenue long-term through winning PPC strategies.
Conclusion
Determining the true cost of PPC
management can be tricky due to the many variables involved. However, you
should now have a much clearer understanding of the typical fees and models
used by agencies.
The factors that have the biggest
impact on rates include the scope of your PPC campaigns, level of optimization
required, and geographic location of your PPC manager.
While agency costs may seem high,
the potential revenue generated from successful PPC is well worth the
investment for most businesses. When managed effectively, PPC provides one of
the most cost-effective sources of new leads and sales.
To maximize your ROI, focus on
choosing an experienced PPC agency that can design winning PPC strategies
tailored to your unique business needs and target audience. With the right
agency partner, you'll see the benefits outweigh the costs and come out far
ahead.
Frequently Asked Questions
What is a typical monthly budget for
PPC management?
For small to mid-size companies,
a typical starting budget for professional PPC management usually falls in the
range of $3,500-$7,500 per month. For larger or more complex accounts, monthly
management costs can easily exceed $10,000 or more.
How can I get the most value from my
PPC agency?
Provide them with as much
background as possible about your products, ideal customers, and target
keywords. Give them access to your analytics and be responsive to their
suggestions. Have open communication and set clear goals. The more they
understand your business, the better they can optimize your campaigns.
When does it make sense to manage
PPC in-house vs. using an agency?
If you have the budget, hiring a
PPC agency almost always provides the highest level of expertise and greatest
return on spend. However, it may make sense to manage smaller campaigns
in-house once you hit a certain spending level and have the resources to
dedicate to learning PPC best practices.
Should my agency refund part of its
fees if my ROAS is low?
Not necessarily. As long as the
agency is providing the agreed upon services and optimization efforts, low ROI
is not always their fault. Results depend on many factors like your website,
conversions process, and overall market. Make sure to first have them audit
your full setup before assuming blame lies solely on the PPC campaigns.
What questions should I ask PPC
agencies during the vetting process?
Ask about their experience in
your specific industry and with clients of similar size. Request examples of
their work and campaign successes. Inquire about their optimization process and
reporting standards. Ask how they stay on top of the latest PPC trends and
features. Make sure to also check reviews and client references.
How can I negotiate better rates
with a PPC agency?
If you have an established
relationship, politely ask if they offer any rate discounts for long-term or
high-spend clients. Mention if you plan to increase budgets down the road. Ask
if they have retainer packages that guarantee a certain number of hours per
month. Let them know you are considering a few different agencies and pricing
will be a factor.
Should my PPC manager also handle my
shopping ads?
That depends on the scope of
services you have contracted with your agency. PPC management and shopping ad
management require different skill sets. Make sure your expectations around
what’s included are clear. Some PPC experts can handle both, while others will
require you to work with a separate shopping ad manager.
Can I hire an overseas freelancer to
manage PPC cheaply?
It’s possible to find freelancers
overseas that charge much lower hourly rates. However, be cautious of very
cheap services, as you often get what you pay for. Carefully vet their
experience and English abilities if hiring internationally. Also consider the
inconvenience of different time zones. A higher priced local expert often
provides better results and communication.
Is it better to use flat-fee pricing
or hourly billing for PPC management?
Each model has pros and cons.
Flat monthly fees provide more consistency in budgeting but less flexibility.
Hourly billing allows you to scale time up and down each month, but costs can
vary unpredictably. For most businesses, a retainer model provides the best of
both worlds, guaranteeing a set number of hours each month.
---
If you want to know more about SEO : Visit This Link
If you want to know more about Internet Marketing Services : Visit This Link
If you want to know more about Media Social Marketing : Visit This Link
If you want to know more about The Three Pillars of Marketing: Owned, Paid, and Earned Media : Visit This Link