How to Choose and Pay your PPC Agency

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 contract models as well as of types of management services – it can be tricky to narrow down the options and choose how to select and pay your PPC agency.

This article includes tips for companies looking to select a PPC agency to obtain a management service that is best suited for 2019 and beyond. 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, or pay-per-click, PPC advertising is an effective modern marketing ploy, with ever increasing ways of using targeted adverts to reach and acquire new customers. These recommendations can be applied to both Google Ads and Facebook Ads, and related to other PPC platforms. 

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, here are some tips to help you find an effective PPC agency to work with and get a better return on investment. 

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 capabilities programmes, features and tools  a lot more can be achieved in a shorter space of time. Over the last 12 months Google’s has significantly improved automation machine learning technology such as bid management. Many of the capabilities known in Facebook advertising, are now available in Google Ads. This AI reduces the need for the security of a long term contract provided by agencies in the past. If your current agency isn’t taking advantage of incredible time-saving measures like Google’s machine learning and automated script processes, you could reduce management fees while also increasing sales by switching to an agency that uses 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 that uses Google’s automatic machine learning with complimentary Google Ads programming scripts.

The industry contract pricing standards includes options such as a flat monthly rate, hourly rate or percentage of monthly ad spend. If you pay via a percentage of PPC spend, make sure the agency you hire continues to drive your costs down, even though they might lose money doing so. Flat monthly rates can also be checked with market rates in 2019 for the time required to manage an account like yours.

If you’re used to paying a percentage of your ad spend or a flat rate, have you thought about exploring other systems like paying an hourly fee with a month to month subscription? With Google doing more of the heavy lifting, an hourly management fee could provide you with more flexibility. We cover 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 keep you as a client by showing you the month to month results they’re creating for you, and the value they bring to the table.

Many suppliers that require contracts are the ones who are afraid to lose clients because they aren’t producing results. Work with a PPC agency month to month and allows you to leave at any time. A 12 month 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 

Some points to check include:

  • What is the minimum contract period?
  • Do you own the advertising account at the end of the contract?
  • What is the suppliers charging model?
  • Will the supplier work to get your costs down if they are paid a percentage?
  • Level of transparency –can you see Google reports or just the agencies reports?
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, 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 company and website data? 
  • Have goals been established and agreed to establish success. Are you clear how the prospective supplier plan’s to work with you to refine strategy, tactics and ultimately reach these goals?

 

Official Advertising Certifications

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. These certifications do not guarantee competence, but they do show a certain level of professionalism and standards an agency requires it of their employees.  Make sure you find a PPC company who shows their certifications on their website and the links take you to a certified company profile hosted on the websites of Google, Microsoft Bing, Facebook, Amazon respectively.

The Google Partner accreditation requires a minimum quarterly spend of $40 thousand dollars per year. The Google Premier Certification is closer to $ 1 million dollars per year- as well as having minimum performance requirements set by Google.

Level Of Experience

  • Is the agency accredited (Google Partner, Bing Agency Partner)?
  • 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 such as Microsoft Facebook and Amazon advertising)?
  • What other services do they offer – for example, conversion rate optimisation (CRO), SEO and web analytics?

Tools & Technologies

  • Does the agency have their own proprietary software bid management, reporting, optimisation and other function developed 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 agencies was to have their own tech. However, with the advancements in machine learning in PPC platforms, most of these third party tech are no longer needed- and just an extra cost for you. Google and Facebook’s own tech is included within the advertising cost, it is real time and has access to many more signals than any third party. 
  • 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. 
  • Do they use the new Google Ads Suggestions Tool for optimisation? 
  • Do the use mainstream third party technology for agencies such as Wordstream, Opteo, AdAlysis for account building, updates 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 with 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, you run the risk of having to start all over again. Some agencies will pay your ad spend to Google themselves, and then charge this fee onto you, giving them ownership of the advertising account. They would need to mark up the Google fees by at least 10% to cover corporate tax, and then more to cover the cash flow risk- sometimes excessively.  

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. 

Summary list of potential Red Flags to watch out for

  • Agencies with salespeople than certified consultants. These companies will usually target companies in their local area. with old school sales pitches instead of digital marketing and consultancy approaches. 
  • Insistence on long contracts.
  • 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, Facebook Ads Clicks campaigns

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:

  • Client Ad spend may be less than £1K per month
  • Time spent required on these type of account may be less than a few hours per month -but varies based on skill level. 
  • Typically work with local business service providers that want to advertise in their local city.  
  • Typically work with  niche  e-commerce retailers with products of limited demand.
  • 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 less than £120 per month.. 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)

  • Client Ad spend may range from £1000-£100,000 per month.
  • Generally, the management fees are likely to be more affordable than the bigger agencies
  • They may offer a hourly rate, fixed fee or percentage of ad spend. 
  • They should be able to offer a full range of features and services; with more complex accounts set-ups.
  • They are also likely to include manage other platforms such as Display Network advertising, Facebook Ads, Bing Ads, and LinkedIn options – as well as manage tools like call tracking, product feed management software etc
  • They should  be capable of applying more advanced skills optimising your account, and be able to allocate more quality time  to your account accordingly
  • Depending on their charging model they may offer a range of optimisation techniques to improve your account for achieving the best ROI.
  • They are likely to have a minimum management fee of £250-£1,000 per month, which reflects the amount of set-up and time spent on the account
  • The agency will probably be a Premier Google Partner, probably with 2 or more account managers dong PPC full time.

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

  • Client ad spend is typically a minimum spend from £10,000 per month.
  • Usually charge a management fee based on a % of ad spend.
  • Often have their own property automation technology and other tools
  •  Target large national and international clients. (and possibly multi-lingual accounts).
  • Larger PPC agencies are likely to have at least 10 account managers, some may handle multiple accounts or only one account (if it is larger or more complex)

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: :

  • Flat Rate Fees
  • Fixed Price packages
  • Percentage of ad spend (10-15%)
  • Hourly Rate
  • Pay per lead or sale.
  • Revenue Sharing

Flat Rate Fees

A flat rate model means that client pays the same amount for PPC regardless of performance and results or how many hours have been devoted to the campaign. This payment contract is often 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 than a company that wants to expand nationally, or even internationally.

Fixed Price (All Inclusive) Packages

Fixed Price Packages are all inclusive advertising clicks 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. 

Percentage of ad spend:  

The more you spend on advertising, the more the agency will earn. Typically, fees range from 10%-20%. The value of the payment fees will vary from month to month, which makes it more difficult to budget. Most agencies have a minimum spend and some also charge an additional management fee. Using this billing model, may align an agency with Google, Bing or Facebook revenues objectives, rather than your own. 

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 good PPC agency, 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, cost per sale, or . 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. As with any difficult decision, their is more risk is making the wrong decision. Within the current rapidly changing AI PPC environment, even if the approach was the best 12 months ago, it may not be within another 12 months. We believe the best way to select a PPC agency is to select one that offers both a monthly subscription and hourly rate. This gives you the flexibility to choose a supplier that is going to be acting in your interest both today and tomorrow.  This billing model is most aligned with your company success, and therefore the best partner for you! 

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