How to Choose and Pay your PPC Agency – The Ultimate Guide

When searching for a PPC agency, it’ll take seconds for you to realise that there is a vast number of companies out there. If you consider that there are also multiple  types of management services as well as contract models – it can be tricky to narrow down the options and choose a PPC agency.

If you’re looking into ways to continue driving your business forward and capitalise on the growing popularity of the web, it makes sense to invest more in PPC marketing. PPC advertising is an effective modern marketing ploy, with ever increasing ways of using targeted adverts to reach and acquire new customers. 

PPC, or pay-per-click has its name from being a new advertising method that offered paying by a click instead of traditional media systems. PPC nowadays includes multiple payment auctions such as pay by impressions, view views, clicks and more provided by Google and Facebook.

When hunting for an agency, their are a few key criteria to consider. Take your time to make a decision, and choose an agency that has the expertise and core values that match your objectives. If you’re looking  to promote your business most effectively and for the best value, these tips will help you find an effective PPC agency to work with and get a better return on investment. In addition to Google Ads, these recommendations can be applied to other PPC platforms such as Facebook Ads, Microsoft Ads, LinkedIn Ads and more.

select and pay

One of the best things to do when you’re looking to work with a PPC agency is to ask yourself what you hope to achieve from enlisting the help of an expert. 

  • Do you want to promote your brand and ensure that more people know who you are and what you sell? 
  • Are you eager to generate more leads or improve the quality of the leads you create? 
  • Have you decided on the average cost per lead, cost per sale and return on ad spend (cpa/roas)
  • Are you keen to target a specific platform or channel, for example, social, display or search? 

Once you know what your main objectives are, you can focus on finding an agency that is capable of helping you realise these goals. 

Is your billing contract still relevant in 2019?

Time never stands still in the world of PPC advertising, and it’s always useful to be aware of the options available to you. A PPC payment model that suited your business a few years ago may not necessarily be the best option now. 

In 2019, AI technology plays an increasingly integral role in PPC marketing, and using the latest platform capabilities means a lot more can be achieved in a shorter space of time. Over the last 12 months Google’s has significantly improved automation through machine learning like smart bidding for a range of goals such as target CPA, Target ROAS, Top Position and more.

This AI can reduces the benefits of the security of the long term contract provided by agencies in the past. If your current agency isn’t taking advantage of incredible time-saving measures of Google’s machine learning and automated script processes, you could potentially increase sales and reduce management fees by switching to an agency that uses the most innovative ways of working to achieve results faster.

If you’re paying too much for PPC Management, or you think that there’s a good chance you could achieve more for less, it’s worth reviewing your current strategy and considering changing your PPC agency to one that uses Google’s automatic machine learning with complimentary Google Ads programming scripts versus third party management software tools and in-house property tech. 

The industry contract pricing standards has been a percentage of monthly ad spend, This billing approach has been used more than the other options such as hourly rate or a fixed contract. 

Some options to consider include: 

  • If you pay via a percentage of PPC ad spend, ensure your agency continues to drives your CPA(Cost Per Acquisition) down to ensure maximum ROI, even though they might lose money doing so.
  • If you pay a Flat monthly rate, compare with market rates in 2019 to review options. 
  • With Google AI machine learning doing more of the heavy lifting on your account it will tick over day to day. An hourly rate could give you more resourcing flexibility, with piece of mind that your account has the attention as needed, along with the required skills.

We have comparisons of pricing models, types of agencies, as well as types of management contracts in more depth in this article below. 

Does the agency terms of service tie you into a long term contract.

Do your agency provide a 30-day monthly subscription that is renewed each month at your discretion, or do they want to tie you into a long term contract? Their is an increasing trend for agencies to always be able to earn you as a client with month to month results.

Many agencies who require contracts are the ones afraid to lose clients because they aren’t producing results. Working with a PPC agency month to month allows you to leave at any time. A long term contract may give suppliers complacency and the opportunity to develop your account at a slower pace. You could work with an agency that is confident enough about their services to offer a rolling monthly contract.

We cover pricing models, types of agencies, as well as types of management contracts at the end of this article after discussing other potential criteria in selecting a supplier. 

Is a free advertising audit review provided.

  • When you are review potential agencies, do they provide a PPC Audit that covers both technical and commercial aspects of your advertising account within the context of your website and company?
  •  Is this audit created by a salesperson or a  consultant (data scientist) and specific to you, or a generic sales pitch proposal
  • Some agencies have more sales people than certified consultants, and prefer sales meetings over written and live screen shares. audit reviews.
  • Are the claims made backed in numbers using reporting of your advertising account?
  • Do you get a chance to deal with the person who will be managing your advertising account, or is it a sales meeting with the goal to sign a long term contract? 
  • Do they know how to use Google Analytics, and the PPC platform in-depth. Have you completed a screen share to run through your accounts to see they understand the systems? 
  • Have goals and strategy been established and agreed to plan for success.
  • Are you clear on the plan’s to work with you to refine tactics and ultimately reach these goals?

 

Official Advertising Certifications & Accreditations

The advertising certifications that Google, FacebookMicrosoft Bing and Amazon need to be updated each year. Some agencies are not certified, or only a small percentage of the staff is actually certified. If these exams are too difficult then the agency is not committed or capable to showcase their understanding of how pay per click marketing truly works and continues to advance. These certifications do not ensure competence, but do show a certain level of professionalism and skills an agency requires it of their employees.  Make sure you find a PPC company who shows their certifications on their website with links to their certified company profile listed on the websites of Google, Microsoft Bing, Facebook, Amazon respectively.

The Google Ads Partner accreditation requires a minimum quarterly spend of $40 thousand dollars per year. The Google Premier Certification is much higher – as well as having minimum performance requirements set by Google.

Level Of Experience

  • What is the level of PPC experience of the person managing your account? Are they more technical or 
  • What other pay per click platforms do they offer (Paid search, display and social).  For example, Facebook, Microsoft and Amazon advertising)?
  • What other related services do they offer – like conversion rate optimisation (CRO), SEO and web analytics?

Tools & Technologies

  • Does the agency have their own proprietary software bid management, reporting, optimisation software tools? Are there extra charges for bid management tools and API charges? 
  • Do they prefer their own technology over Google own “newer” automation technology? 18 months ago  a major USP for the largest agencies was having their own tech. However, with the advancements of machine learning in PPC platforms, most of these third party tech are less needed. Google and Facebook’s own AI technology is free to use, or at least covered within the advertising cost!. 
  • Do they use the API (Application programming interfaces) of Google, Facebook, Amazon and Microsoft Bing such as scripts? The Google Ads scripts “were” great for automated optimisation before Google’s recent machine learning, but now days scripts are more useful to speed up new campaign building, and provide reporting such as alerts.
  • Do they use the new Google Ads Suggestions Tool for optimisation? This is part of the new Google Ads interface giving health checks across your account for obvious stuff like a missing ad extensions and more.
  • Do the use mainstream third party technology for agencies such as Wordstream, Opteo, AdAlysis for account building, updates, reporting and optimisation? 

Communication, Transparency and Reporting

Do they really understand your business and advertising objectives? Have they asked the right questions before sending you a proposed contract? 

How regular will contact with your account manager be, and what kind of updates can you expect to receive with regards to performance, strategy, optimisation and ongoing recommendations? It is made clear what the ratio of communication to work is? For example a time split of 80/20 of work/communication. 

What standard reports will be provided – and how frequently. If an agency proposes that clicks will be their main KPI to measure success, are they aligned with your objectives? 

It’s very important to find out how active the agency will be in sharing data with you and your organisation. Are you given 100% transparency into your account’s performance? Do you own the intellectual property of the advertising account? 

You own the advertising account.

You should own the Google Ads account using your own credit card that gets billed by Google. Otherwise, should you later wish to take Google Ads in-house or move to another agency, their is a risk of having to start all over again. Some agencies will pay your ad spend to Google themselves directly, and then bill you the for ad spend. They would need to mark up the Google fees by at least 10% to cover corporate tax, and perhaps cash flow as well. This approach means the agency  owns the advertising account.

While Google Certified Partners are obliged to share all costs and  performance metrics of all Google ad campaigns, the best way for you to have access to all this information is to maintain complete, administrative ownership over your account. This will make sure you know exactly what you are paying for. u

Summary list of potential Red Flags to watch out for

  • Agencies with more salespeople than certified consultants. These companies will usually target companies in their local area. with old school sales pitches instead of a consultancy approach to digital marketing.
  • Insistence on long contracts.
  • Is your agency more of a web developer than advertiser?
  • If you have no account access, or access to landing pages.
  • Suppliers with no reliable and independent third party hosted client testimonials (e.g. Google Reviews).
  • Agencies that talk about micro stats like cost per click, instead of cost per lead, sale or ROAS. 
  • Poorly defined objectives. For example, using Facebook Ads website traffic campaigns instead of more obvious choices like website conversions or lead ads. 

Types of Agency Managed Services

PPC agencies vary considerably expertise, so they will usually specialise in providing service to clients with a certain ad spend. The main types of PPC management service include: 

  • Managed account with separate ad spend and monthly management fee (often with a set-up cost). 
  • Fixed price packages, with all-inclusive clicks and management fees (sometimes with a set-up cost)
  • Freelance Individuals, web designers or/and uncertified agencies charge from £120 per month
  • Accredited agencies start from around £250 per month.
  • Large agencies start from around £1,000 per month. 

1) Freelancers, web designers or uncertified agencies:

  • Advertising spend of client is often less than £1K per month
  • Usually work with local business service providers that want to advertise in their local city.  
  • Usually work with  niche  e-commerce retailers with products of limited demand.
  • Time required on these type of account ranges from a few hours per month to around 10 hours, but varies based on skill level.  
  • They may lack the specialist expertise to use all the features within Google Ads. Typically only some of the Google Ads targeting options are used.
  • Management fees typically starting from £150 per month.
  • It is good for the client to check possible advertising certifications 
  • They may offer a hourly rate, fixed fee,  percentage of ad spend or cost per lead.

2) Accredited Agencies (Google Certified Partners or Google Premier Certified)

  • Ad spend of client usually range above £5000, and sometimes upto £100,000 per month.
  • Management fees provided are likely to be more affordable than the biggest agencies
  • Should be capable of implementing all features required by more complex accounts set-ups, as well as implement a range of optimisation techniques to improve your advertising ROI.
  • They are also likely to manage other platforms such as Facebook, LinkedIn Microsoft – as well as manage tools like analytics, tagging, call tracking, product feed management software etc.
  • Some are Google Certified Partners, and some will be Premier Google Partners with account managers dong PPC full time.
  • For billing, they provide options such a hourly rate, fixed fee or percentage of ad spend. 

3) Larger Specialist PPC Agencies (Over 50+ Employees)

  • Client ad spend usually range from +£20,000 per month.
  • Agency often has their own property software technology for tasks like bidding, reporting and automation. 
  • Target large national and international clients. (Rarely local business). 
  • Larger PPC agencies typically have more than 10 account managers. 
  • Usually charge a management fee based on a % of ad spend with a minimum ad spend cap. 
  • Often prefer long term contracts
  • Management fees often start from £5,000 per month. 

PPC Management Pricing models

There are different ways of paying for PPC management services. It’s worth weighing up the pros and cons of different pricing models to find the option that suits you best. 

The most popular pricing models include: :

  • Fixed Price packages (All Inclusive)
  • Flat Rate Fees
  • Percentage of ad spend (10-20%)
  • Hourly Rate
  • Pay per lead or sale.
  • Revenue Sharing

Fixed Price Packages (All Inclusive)

Fixed Price Packages are all inclusive ad spend and management service fees

The all-inclusive packages tend to be aimed at smaller companies that want to spend less than £1,000 per month for everything. 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, You must request reporting of the amount you actually you for clicks, vs management fees. 

Flat Rate Fees

A flat rate model means that client pays the same amount for PPC Management regardless of performance and results or how many hours have been devoted to the campaign. This payment contract is usually offered with long-term contract commitment.. 

This term of services involves estimating the time, effort and skill to provide a fixed monthly price. This billing model is more suited to a local business or niche e-commerce retailer with limited demand, than a company that wants to expand nationally or internationally.

Percentage of ad spend:  

The more your company spends on advertising, the more the agency will earn. Typically, management fees range from 10%-20% of the ad spend. The management fee charge will vary from month to month, which can make it more difficult to budget. Most agencies using this billing model have a minimum ad spend. Using this billing model, may align an agency more with Google, Bing or Facebook revenues objectives than getting the best ROI. 

Hourly Rate: 

An hourly rate is a simple, straightforward pricing policy, which makes it easy to budget and calculate your  monthly costs. Paying an hourly rate such as £50, with a set amount of hours per month, you know exactly how much you’re spending on PPC management every single month. With an hourly charge, you don’t have to worry about being tied into long term contracts, and you also have control over how much you spend on PPC Management. If you hire a PPC agency that makes the most of latest advancements , they will go the extra mile to ensure you get the most out of the time you pay for. Modern systems and innovations like Google’s machine learning and automation processes, for example, can save a huge amount of time, meaning that you get a lot more for your money. The ongoing optimisation of Google such as automatic bid management, do you really need the security that a long term contract used to offer.

With an hourly rate, you can also take advantage of greater flexibility if you sign up with an agency that doesn’t require you to take out a long-term contract, and works from the first month, and then each month thereafter to retain you as a client. 

Pay Per Lead or Sale

This pricing model consists of paying based on a cost per lead or cost per sale. It is more commonly used in the SMB market with companies that have less established advertising presence. 

Revenue Sharing

This involves the management agency billing a percentage of revenue. As with paying per lead or sale, this method is more commonly used in the SMB market with companies that have less established advertising presence.

Summary

With so many options available, making a decision can be difficult within the current and rapidly changing PPC AI environment, If an approach was the best 12 months ago, it may not be now. 

We believe the best way to select a PPC agency is one that offers a hourly rate with a rolling month to month subscription This billing method you the flexibility to test suppliers that have a high level of skill and best aligned with your goals without the risk of long term contracts. 

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