How much should a PPC agency charge?

Didit Editorial

9 years ago

May 22, 2015: Didit’s Chris Bell recently had a conversation with a friend who works in digital marketing but is unfamiliar with the nuts and bolts of PPC (Pay Per Click). Chris’ friend asked him this: “since Pay Per Click is a commodity product in digital marketing, why aren’t agencies more transparent with their pricing?”

This question shows that there remains a lot of misunderstanding about how pay per click marketing actually works, and about how agencies charge to manage campaigns. Here are a couple of points that I hope will clarify things — both for Chris’ friend and for the world at large:

PPC is not a commodity. Pay Per Click advertising is but one of many mechanisms that businesses need to consider in their digital marketing. Because each client has a different business model, different KPIs, websites, products, keywords and Quality Score, each client is different. While it might be easy to think of Google as a machine that one simply buys keywords and clicks from, this is simply not the case. Every business that uses PPC needs a unique solution, which means that PPC is a custom item, hardly an undifferentiated commodity product.

Pricing needs to make sense for you. For some clients, a monthly retainer and budget cap works the best, depending on how their business model works. Others will prefer to leave budgets open-ended and use a percentage of spend model. A good agency will tailor a combination of both approaches to the specific business model of the client. One approach we use here at Didit is to start a client with a monthly minimum, during which time the campaign and keywords are built out and baselines for performance are measured and set. As campaign performance is measured, and money begins to flow, the client is transitioned over to a percentage of spend arrangement so as to take advantage of greater flexibility in regards to changing CPCs and other factors. A great PPC firm will construct a flexible pricing arrangement that keeps pace with the client’s size and business needs, and be open to billing changes when external market circumstances warrant.

Ask and answer questions. A good PPC firm can be judged by how well it understands your business. On the first round call, try to share with a candidate PPC firm as much about your business as you can. It’s great to include broad details as to how your sales funnel works, details about your website, and what you hope to gain from buying clicks. The PPC firm that will work best for you will be the one that asks as many questions as they can about your business in order to present you the best customized solution.

Consider the other options. Here at Didit, we’ve had clients come to us interested in PPC services who we ultimately steered away from the tactic, because there were other channels we discovered that they could use that were more efficient in terms of realizing their core business goals at greater ROI and lower cost. A great PPC agency will not focus on selling you pay per click advertising, but will be “channel agnostic” and instead focus on helping your business make money and grow in the long term, using whatever tactics and channels (both on- and 0ffline) work best. For some clients, this has meant SEO, website redesign, social media or content marketing, used alone or in conjunction with traditional pay per click advertising.

Great agencies are partners, not vendors, and will be committed to the growth of their client’s business using the best online marketing methods available, whether they be PPC, SEO, social media, or something entirely different.