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PPC Pricing: What are the Different Models and What is Fair?

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If you've been in the market for a PPC agency, you've undoubtedly come across a number of different pricing models. So how do you know if you're getting a fair deal? How much work actually goes into this stuff?  We'll discuss the 3 common pricing structures below and advise on what you should be looking to pay for and what you should be looking to avoid.

Alongside any type of PPC ad buy, especially paid search, comes extensive ongoing management and optimization of the campaigns. You simply cannot employ a “set it and forget it” type of strategy, as you will not achieve your best possible ROI. Why, you ask? Well, one important thing to keep in mind is that EVERY SINGLE user search query triggers a new auction for your ad placements. These auctions can be affected by outside factors too, such as new competitors entering the auction or an unexpected influx of search traffic due to an offline event. It's a volatile and real-time marketplace, one that you cannot afford to ignore for any period of time. The bottom line is that there is a minimal amount of time that has to go into every account on a monthly basis, regardless of its size and scope.

Examples of PPC Pricing Models

Flat Fee Model

In PPC, it's just not feasible to offer the same pricing to every customer, when every company has its own set of unique goals and challenges. You can call this the “cookie cutter” approach, where you aren't receiving a custom campaign program or a dedicated account team that is looking to be a true partner in your marketing efforts.

While this may be an easy approach for billing and budgeting purposes, it doesn' lend itself to personalized service, and can lead to underperform.

Percentage of Ad Spend Model

This pricing model aggravates me the most. Ad spend does not necessarily have a direct correlation to the complexity of your paid search program, as the cost-per-click can vary greatly for different industries. For something like the legal industry, you can be paying upwards of $150 per click, whereas a company selling kites may only be charged $1.50 per click. Does this mean the law firm should be paying 100x more in fee than the kite sellers? What if the kite company is running Google Shopping and Remarketing campaigns? That only adds to the complexity and time needed to fully optimize the account. This pricing model looks to take advantage of those with higher spend levels who are charged enormous fees just because they have big budgets.

Hybrid Model

This is basically a combination of both of the above models, with a small % of ad spend added onto a monthly flat fee. If either fee structure doesn't work separately, it certainly won't work when you combine the two approaches.

Custom Model

When it comes to Pay-Per-Click, anything less than a custom pricing package designed to meet your budget and marketing goals at the same time is not ideal. You shouldn't have to pay for more services than you really need, or for hundreds of keywords that aren't even relevant to your core business. Your marketing agency should be your partner and should continually be looking for opportunities to grow your business. That growth should not be because it's tied to an increase in ad spend that then corresponds to a higher fee for the agency either.

At FourFront, we believe custom pricing is the best way to ensure that your campaigns are fine tuned to maximize your investment. Check out our PPC Management Services, or Contact us to learn more about how we can help your business.

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