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

With so many PPC agencies and types of ad management services out there, it can be difficult to know where to start when looking for one.

There are many ways to continue driving your business forward, but one of the most effective is PPC marketing. PPC advertising allows you to target specific ads to reach and acquire new customers. With ever-increasing ways of using targeted adverts, it’s no wonder that more businesses are turning to this method.

When hunting for an agency, there 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.

What is PPC?

PPC, or pay-per-click, gets its name from the advertising method that bills you based on how many clicks your ad receives. Nowadays, PPC includes multiple payment options such as pay by impressions,  pay by conversion, pay per video views and more provided by ad platforms like Google, Microsoft, LinkedIn and Facebook. This is unlike traditional advertising which is more of a fixed than a variable price. 

Understand your Advertising Goals

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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 the 2023?

PPC advertising is always changing and evolving, so it’s important to be aware of the new options available that might better suit your business than what you’ve been using in the past.

AI technology is playing an increasingly important role in PPC marketing, and using the latest platform capabilities can help you achieve more in less time and at lower cost. Google has significantly improved automation through machine learning over the past 12 months, with features like smart bidding for a range of goals such as target CPA, Target ROAS, Top Position and more.

If your current agency isn’t utilizing Google’s machine-learning capabilities and automated script processes, you could be missing out on incredible time-saving benefits. Switching to an agency that uses the most innovative methods could potentially increase sales while reducing management fees.

If you suspect that you are overpaying for your PPC management, or could be achieving more with a lower budget, it may be time to review your current strategy. One option worth considering is changing your PPC agency to one that uses Google’s automatic machine learning in combination with the right mix of manual optimisation.

There are many options to choose from when it comes to how you want to be billed for your ad spend. The industry contract pricing standards have been a percentage of monthly ad spend, but some people prefer an hourly rate or a fixed contract

Here are some things to consider:

  • If you pay via a percentage of PPC ad spend, ensure your agency continues to drive your CPA(Cost Per Acquisition) down to ensure maximum ROI, even though they might make less money doing so.
  • If you pay a flat monthly rate, compare it with market rates in 2023 to review options. 
  • With Google AI machine learning working on your account, you will have more time to focus on other areas of your business. Hiring someone at an hourly rate will give you the flexibility to increase or decrease the number of hours they work as needed, and ensure that your account always has somebody with the required skillset working on it.

The pricing models, agencies, and management contracts are compared in greater detail below.

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Does the agency’s terms of service tie you into a long-term contract?

Many agencies require long-term contracts, but there is an increasing trend for month-to-month subscriptions that are renewed at your discretion. This allows you to leave at any time if you aren’t happy with the results.

A long-term contract with a supplier could give them a false sense of security and they might not work as hard to develop your account. However, if you work with an agency that offers rolling monthly contracts, they will be more confident in their abilities and be more likely to deliver quality results.

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. 

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Is a free advertising audit review provided?

Before you finalize any agency, ensure they will do a complete PPC Audit. This Audit should examine both the technical and commercial elements of your advertising account in regard to how it works with your website and company as a whole. This gives you a chance to see what working with the company would be like, and also what the strategy would be

  • Is this audit created by a salesperson to be generic and nonspecific, or is it made by a consultant (data scientist) who tailored it specifically for you?
  • Some agencies prioritise sales over qualified recommendations, and as a result, have more salespeople than certified consultants.
  • Are the claims made also 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 have experience using Google Analytics and the PPC platform? Have you done a screen share to walk them through your accounts and make sure they understand the systems?
  • Have goals and strategies been established and agreed upon to plan for success?
  • Do you understand the plan of action that they will take in order to improve your strategy and reach these objectives?

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Official Advertising Certifications & Accreditations

Advertising certifications from Google, Facebook, Microsoft Bing and Amazon need to be updated every year. Some agencies don’t have any certified staff members, or only a small percentage of the people working there are certified. If these exams are too difficult for an agency, it either isn’t committed to pay-per-click marketing or doesn’t understand how it works and changes over time.

Although certain certifications do not indicate talent, they are indicative of the level of professionalism and skills required by an agency from its employees. when looking for a PPC company, ensure that their website displays links to any certified company profiles listed on Google, Microsoft Bing, Facebook, and Amazon.

The Google Ads Partner accreditation has a minimum quarterly spend requirement. On the other hand, The Google Premier Certification demands much higher performance requirements set forth by google..

Level Of Experience

  • What is the level of PPC experience of the person managing your account? Are they more technical, creative or analytical? How much input do they have from other team members?
  • 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) and web analytics?

Tools & Technologies

  • Are there any bid management, reporting, and optimization software tools that the agency uses? If so, are there extra charges for these tools or hidden costs associated with them?
  • With google and Facebook’s advancements in machine learning, do agencies still prefer to use their own technology? 18 months ago, a USP for the largest agencies was their technology. However, with Google and Facebook’s AI technology being free (or at least covered in advertising costs), is this third-party tech really necessary anymore?
  • Before Google’s recent machine learning, scripts were much more useful for automation and optimization. Nowadays, they are better for speeding up campaign building & reporting features such as alerts.
  • The Google Ads Suggestions Tool is a great way to optimize your account and ensure that you’re not missing out on any important ad extensions.
  • Do they use up-to-date, mainstream technology from third-party agencies like WordStream, Opteo, and AdAlysis to construct their accounts, keep them updated comply with reporting requirements, and optimize performance?

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 their contact from your account manager be?

Can you expect regular updates on performance, strategy, and optimization from the agency? How often will they communicate with you? For example, an 80/20 split of communication to work. What type of reports will be provided regularly and how frequently? If an agency only uses clicks as its main metric for success, are they in line with your goals?

It’s crucial to know how often the agency will share data with you and your company. For example, are you given complete transparency into your account’s performance? Do you own the intellectual property of the advertising account?

You own the advertising account.

In order to avoid any problems in the future, you should use your own credit card to pay for Google Ads. That way, if you ever want to stop working with an agency or take Google Ads in-house, there’s no risk of having to start from scratch. Some agencies will bill you for ad spend after they’ve already paid Google directly–additionally tacking on a 10% fee to cover taxes and cash flow. This means that the agency would technically own the advertising account.

Google Certified Partners are legally bound to show all campaign costs and metrics to customers, but the best way to access this information is having full control over your account. That way, you will always know what you’re paying for.

Summary list of potential Red Flags to watch out for

  • Agencies with more salespeople than certified consultants generally use old-fashioned sales tactics to local businesses rather than employing a digital marketing strategy.
  • Trying to tie customers down with lengthy contracts.
  • If your agency focuses more on web development than advertising, then you might want to rethink your strategy.
  • If you cannot access your account or any landing pages.
  • Suppliers without any kind of testimonials cannot be trusted.
  • Agencies that talk about micro stats like cost per click, instead of cost per lead, sale or ROAS. 
  • One example of a goal that is not well-defined is using Facebook Ads for website traffic instead of campaigns with the more obvious objective chosen, like website conversions or lead ads.

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Types of Agency-Managed Services

PPC agencies offer a variety of services, although their main focus is working with clients who have a specific ad budget. The most common types of PPC management services are:

  • A managed account with a separate ad spend, monthly management fees, and set-up cost.
  • The packages are all-inclusive, with no additional fees for clicks or management. (Sometimes there is a set-up cost.)
  • Freelancers with or without certifications or past agency experience.
  • Accredited agencies start from around £350 per month.
  • Large agencies start from around £1,000 per month. 

1) Freelancers, web designers or uncertified agencies:

  • The advertising budget for the client is often less than £1,000 per month.
  • Often work with local service providers that want to advertise in their local city.  
  • Often work with niche e-commerce retailers with products of limited demand.
  • The time required on these types of accounts 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 start from £250 per month.
  • It is good for the client to check possible advertising certifications 
  • They may offer an 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 clients usually ranges above £5000, and sometimes up to £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 account set-ups, as well as implementing a range of optimisation techniques to improve your advertising ROI.
  • They are also likely to manage other platforms such as Facebook, LinkedIn and Microsoft – as well as management 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 doing PPC full-time.
  • For billing, they provide options such as an hourly rate, fixed fee or percentage of ad spend. 

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

  • Client ad spend usually ranges from +£20,000 per month.
  • Agency often has its 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.

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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)

With a fixed-price package, you pay one fee that covers both ad spend and management service fees. This type of package is usually best for smaller companies that want to spend less than £1,000 per month total. Keep in mind that with an all-inclusive fee, it may be difficult to determine how much of your budget is going toward clicks versus the management fee. If you want this information, you will need to request reporting that details the amount you actually owe for clicks separately from the amount owed for management fees.

Flat Rate Fees

With a flat-rate model, the client pays PPC Management the same price every month, regardless of how many hours have been devoted to the campaign or its results. This type of billing is generally offered with a long-term contract commitment.

This term of services involves estimating the time and effort needed to provide a set monthly fee. This method works better for local businesses than for those trying to expand nationally or internationally.

Percentage of ad spend:  

With this billing model, agencies may be more aligned with Google, Bing or Facebook revenue objectives than what’s best for the client. Here’s how it works: The agency gets a percentage of whatever the company spends on advertising- typically 10%-20%. This monthly management fee charge can make budgeting difficult because it varies from month to month. Also, most agencies using this type of billing have a minimum ad spend requirement.

Hourly Rate: 

An hourly rate is a simple, straightforward pricing policy, which makes it easy to budget and calculate your monthly costs. With an hourly rate, such as £50 for PPC Management, and a set number of hours per month, you always know precisely how much you’re spending every single month. Having an hourly charge gives peace of mind by not being tied into long-term contracts and also having control over budget.

A PPC agency that embraces current trends will deliver more value for the time you pay them. Google’s machine learning and automation processes, for example, save a considerable amount of time. With automatic bid management from Google, do you still need the security provided by a long-term contract?

You can also enjoy greater flexibility by signing up with an agency that charges hourly rates, instead of a long-term contract. This type of agency usually works from the first month and then each month thereafter to retain you as a client.

Pay Per Lead or Sale

This pricing model, which is more commonly used among small businesses that don’t have much of an advertising budget, involves paying based on a cost per lead or cost per sale.

Revenue Sharing

This method charges a percentage of revenue, which is much more common for smaller businesses that haven’t established themselves yet in advertising.

Summary

Deciding on the right PPC AI for your business can be difficult with so many options available that are constantly changing. We believe that going with an hourly rate and a rolling month-to-month subscription is the best way to go because it gives you the flexibility to test suppliers without being locked into a long-term contract.

Liam Holmes

Liam Holmes