Managing PPC campaigns or multiple ad campaigns across different skews can be time-consuming, frustrating, and costly. That’s why paying a PPC management agency is a good idea. Overpaying is not, however.
The tricky part is that PPC pricing is rarely one-size-fits-all. Determining what you should pay and the type of agency or services you want will require many different considerations about your business, your willingness to spend on PPC advertising, and how much effort you want to have to put in yourself. One agency might charge a flat fee. Another might base its management fee on ad spend. A third may offer performance based pricing, where the cost depends on leads, sales, or other results.
Most PPC agencies have different PPC management pricing models based on different needs and the scale of pricing can vary wildly, it’s only one of the reasons clients have issues with their PPC agency. It depends on your account, your goals, your monthly ad spend, your margins, your landing pages, and how much support your business needs. The upside is that a good agency can get you much more of an ROI than a typical marketer is capable of.
It’s a given that you’ll have to spend money on advertising in order to draw in customers, but much of that money can be wasted with ineffective PPC campaigns. The right PPC management will keep your Google ads fresh, well-targeted, and ever-evolving to consistently engage your market.
The core of figuring out how much to pay will be determined by the type of strategy that works for you and how much you can afford to spend in return for managing your ad campaign.
Pricing Models and How They Affect Your Business
Most agencies build management pricing around the amount of work required to manage your account well. That work can include keyword research, ad copy testing, bid management, conversion tracking, call tracking, reporting, strategy, and improvements to landing pages.
A simple local account may only need light ongoing management. A larger account with multiple PPC campaigns, complex offers, and several landing pages may need deeper analysis and more frequent changes.
That is why PPC management costs can vary so much.
A strong agency should be able to explain its management pricing clearly. If the proposal feels confusing, or if the agency cannot tell you what is included in the management fee, pause before moving forward.
There are three standard management pricing models that each work differently and are best suited for different types of businesses as well as additional fees and services that you may want to consider.
We’ll detail each model and then discuss the optimal situation where that PPC pricing model would work to give you an idea of what’s best for your business and campaign strategy.
Percentage of Ad Spend Models
Percentage of ad spend is one of the most common ways agencies charge for paid search.
The way these models of pricing work, is that companies pay an agency a set percentage of whatever their base ad spending is. The company then manages the ad campaigns based on regular ad spend percentages. For example, if your monthly ad spend is $10,000 and the agency charges 15 percent, your monthly management fee would be $1,500.
In many cases, the more campaigns the agency manages, the lower the percent paid gets. This means by volume the agency makes more money but the business pays less. This is not the case for every agency but is standard practice for many of them.
This is generally the most common PPC pricing model used and does not include additional fees and services provided by the agency. One caveat that comes with these pricing model’s is that they typically require a minimum amount of ad spend to operate regardless of the overall budget.
The percentage is also set by the agency and once locked in, can be difficult to renegotiate, especially mid-campaign. This means that fees are locked for a period of time regardless of return or tracked performance unless otherwise stipulated. Knowing the conditional stipulations that apply to your PPC management contract will help to avoid unnecessary costs.
A percentage model can make sense when the agency is actively managing growth. If they are improving campaign structure, testing new offers, refining landing pages, and using performance data to guide budget decisions, the model can be fair.
The concern is incentive.
With percentage of spend pricing, an agency may earn more when you spend more. That does not automatically mean the agency is doing anything wrong. Plenty of honest agencies use this model. But it does mean you should ask how they decide when to increase media spend.
More spend is not always better. More profitable spend is better.
Before agreeing to this type of PPC management pricing, ask:
What percentage do you charge?
Is there a minimum management fee?
Does the rate change as ad spend increases?
How do you decide when to raise or lower budget?
How do you measure lead quality?
Do you include monthly performance reporting?
If the agency cannot explain how more spend connects to more revenue, that is a problem.
Who They Work For
These types of management pricing contracts are best reserved for big businesses with big PPC advertising or PPC ads budgets. This is mainly due to the minimum required spending that accompanies these pricing plans.
If your account has meaningful media spend, multiple PPC campaigns, and a clear way to measure revenue, this model can work well. It gives the agency room to manage complexity and make smart changes as your campaigns grow.
This is especially true for businesses that already understand their numbers. If you know your average close rate, margin, and customer lifetime value, it is easier to decide whether the management cost makes sense.
Small to medium-sized businesses may not be able to afford the price point of these plans and the required minimums.
Additionally, larger businesses that run more campaigns or that have large ad portfolios will benefit more from the decreased fees associated with higher workloads on these price plans.
Larger businesses also have the ability to absorb the cost over the term of a contract if the ROI is not as high as it may have been forecast. Businesses with minimal budgets or that cannot absorb extra costs would not be well suited to these models due to the lack of control overpricing.
If your budget is tight, a percentage model may still come with a minimum monthly charge. That means your PPC costs could feel high compared to your actual click budget. In that case, a flat fee or smaller flat monthly fee may be easier to manage.
Percentage pricing is also not a free pass to “set it and forget it.” You should still expect active Google Ads management, clear reporting, and a practical PPC strategy.
If all the agency does is spend your money and send a generic report, the management cost is probably too high.
Scope Based Flat Fee Pricing
A scope-based flat fee is exactly what it sounds like. You pay one set price for a defined amount of work.
This is a fixed fee model that is determined by the associated costs and scope of managing a client’s static ad campaign. The fees and assessments for managing a business’s ad campaigns are all built into one payment.
This can be one of the cleanest PPC management pricing models because everyone knows the cost upfront. You know what you will pay. The agency knows what it needs to deliver.
A flat fee may cover:
Account monitoring
Budget pacing
Search term reviews
Ad testing
Basic conversion tracking checks
Reporting
Strategy calls
Limited landing pages feedback
Basic account management
Some agencies structure this as a flat monthly fee. Others call it a flat monthly retainer. The name matters less than the scope.
This provides a set range of PPC management services for static campaigns and covers all associated monthly fees. This provides businesses with a set cost for a set run of ad campaigns.
The one typical downside to this type of payment model is that it is not easily modified and the scope of services may be less than other pricing models. If your account needs more work than expected, the agency may charge extra. That could include a setup fee, extra page work, advanced conversion tracking setup, or new campaign builds. Performance is also not guaranteed. The PPC management fee’s are paid regardless of how the Google ads campaign perform unless otherwise stipulated in the contract.
This type of setup can be a double-edged sword for businesses as the simplistic structure and flat fees are beneficial, but the range of services and performance may be limited. It’s best to discuss exact details before deciding on this type of payment model to ensure the services are what you need.
Before choosing a flat fee model, ask what is included and what costs extra. Does the price include new campaigns? Does it include call tracking? Does it include building or improving landing pages? Does it include Microsoft Ads, or only Google Ads?
A simple flat fee is great. A vague flat fee is not.
Who Should Use Scope Based Flat Fee Pricing
Though this type of pricing model is not as common as the percentage of ads spend model, it can be beneficial for businesses that run a set of standard, static ad campaigns on a regular basis and simply need them managed in some capacity.
Smaller businesses that prefer to pay a flat fee may also choose this model over others so that they have more control over the exact price they pay. The simplified pricing and limited PPC management services also serve smaller less complex ad campaigns better. If you are running a few focused PPC campaigns and do not need major weekly changes, this type of management pricing can be practical.
It can also work for companies that already have an internal marketing team. Larger businesses or businesses that run constantly changing ad campaigns, seasonal Google ads, and other promotions would not benefit from this type of pricing. The fee structure is based on static ad campaign costs and the PPC management and oversight level is less than that of other plans. In that case, the agency may handle the technical pieces while your team manages creative, offers, or the broader sales process.
This means essentially that complex ad campaigns will not receive the PPC management and attention to detail that they need to capitalize on their potential and will therefore have diminished ROI. Even if the cost is lower, in these cases the loss of potential revenue may cost even more. It’s like buying a cheaper product to save money and then having it break two days later.
A tiered flat fee model can be especially useful here. For example, a starter tier might cover one account and basic reporting. A higher tier might include more campaigns, more strategy, more landing pages work, and stronger tracking.
This lets the management cost grow only when the workload grows.
A flat fee model may not be right for businesses with constantly changing offers, seasonal promotions, complex funnels, or aggressive growth goals. If your account needs heavy testing, deeper PPC strategy, or frequent page changes, a limited flat fee may hold the agency back.
In that case, cheaper management pricing may actually cost you more through missed opportunities and wasted spend.
Lead Generation-Oriented Performance Models
Performance based pricing ties the agency’s compensation to results.
These models are much less prevalent than the previous two and are tailored to less traditional campaigns that rely on leads generation to close sales. In general, this model is used for campaigns such as e-mail marketing, cold calling, B2B sales marketing, and other types of direct sell campaigns.
Agencies typically manage these campaigns and collect a fee-based either on overall performance or per lead that closes in a sale. Though the niche for these types of campaigns is smaller, the costs associated are also much more mitigated than other options.
This option works exceedingly well for eCommerce, direct sales, and referral models.
The upside is obvious. The agency has skin in the game.
The risk is that “performance” can mean different things to different people.
A lead is not always a good lead. A phone call is not always a real opportunity. A form fill is not always worth chasing. If the agency is rewarded for volume only, you may end up with more leads and worse lead quality.
That is why conversion tracking matters so much. You need clean data before using performance based pricing. You may also need call tracking, CRM feedback, and a clear definition of what counts as a qualified lead.
Before choosing this model, agree on:
What counts as a valid conversion
How conversion tracking setup will be handled
How phone calls will be judged
How bad-fit leads will be filtered
Who owns the ad account
Who owns the landing pages
How disputes will be handled
This model can work, but only when tracking and trust are strong.
Who It’s For
As we’ve discussed, this model is rarer than others due to the niche nature of the campaigns that use it. However, businesses that market directly or use conventional sales tactics can make great use of this as a leads-generation service to drum up sales.
If your team can quickly tell which leads became customers, which calls were useful, and which campaigns created revenue, the agency has better data to work with. That can improve PPC strategy and help reduce PPC costs over time.
The basic idea is that you only pay when they bring you a client. This makes the cost relative to client acquisition a worthy exchange in most cases. Linkedin campaigns, B2B campaigns, and direct-to-consumer sales would benefit greatly from this model.
Traditional marketing tactics, ad campaigns, and site-driven sales would not benefit from this model as the overall benefit would be lower compared to the cost per customer.
If leads sit for three days before anyone calls them, even great Google Ads management will look weak. If nobody tracks which leads turn into revenue, the agency will be optimizing with partial information.
That is how good budgets go bad.
A performance model needs clean tracking, fast follow-up, strong communication, and honest reporting. Without those pieces, it can create arguments instead of results.
Additional Plans and Management Fee’s
The plans we’ve listed are the top 3 management pricing models that are most common, agencies may include other plan options as well as PPC management fee.
Typically, PPC management services fees are flat, static, and applied on top of standard pricing plan rates. The benefit of agencies that offer these fees is that the level of service is usually higher. In particular, services offer more control over ad campaigns, including automatically rotating or updating ads, managing dynamic ad campaigns, updating copy and other elements, and monitoring performance.
The fees for these services aren’t cheap, typically ranging from $500 to $5000, but the benefits are great for businesses with large campaigns who can afford the added cost and want more precise control of their PPC campaigns.
Deciding What You Should Pay
Before you decide on a plan, having a full understanding of your needs will help you determine what you need and what you should pay in terms of required services, changes, and other issues. It’s not enough to say “well, I can afford this much, so that’s what I’ll pay.”
First of all, take a look at your business’s PPC advertising or PPC ad structure. Look at your base performance, decide what you want to improve. What can you afford to spend each month? What is your target cost per lead or sale? How much is a customer worth? What kind of close rate do you have? Are your landing pages strong enough to support paid traffic? The right PPC management pricing depends on those answers. If you don’t have a dedicated PPC advertising/PPC ads program or budget, try to get an idea of what you want so that you don’t go into negotiating with an agency blind.
This is why larger businesses can afford to pay large premiums, they already have the ad budget and the return on ad spend usually covers any costs associated with using an agency.
Once you have a budget in mind, you can begin to decide on what plan would work best. This includes considering whether you want to pay for additional PPC management services.
The fees on percent ad spend plans are fairly standard and don’t leave much room for negotiation, but performance-based models and flat fee structures usually leave room for negotiation in terms of service and price. The larger and more complex your ad campaigns, the more you’ll spend overall, but you can also expect a higher ROI in these cases, with a good agency.
Before you sign the contract, make sure you have a PPC audit performed and go over any and all particulars so that you know where you stand. Having stipulations in your contract that cover you in case of downturns in business, poorly performing Google ads, or dynamic ad campaigns will allow you more control over your campaigns and protect you from the unexpected.
Plan Payment Cost Estimates
To help you figure out how much you’ll be spending, we’ll break down some of the standard industry fee structures.
Estimating is key to success in Google Ads.
Startup Fees
Startup Fees are essentially assessment fees that are paid at the start of the contract. These are usually paid regardless of whether you start a long-term contract or are month to month. They can range from a couple of hundred dollars to several thousand depending on the agency and the scope of the PPC management services needed.
You’re paying these fees up-front for the agency to put together a plan for your ad campaigns and the PPC management services requirements. What you get for these fees, however, depends on the agency, so don’t expect a guaranteed level of service just because the startup fees are higher.
Contract Length and Minimums
Contracts typically come in three types when you sign with an agency. Depending on your situation or budget, choosing one type over another may have more benefits.
Some agencies offer month-to-month contracts that allow you to change or alter services on a monthly base or quit the contract after the next 30 day period if you so desire. If you’re uncertain about your need or want to test out the agency before committing to a long-term contract this is a good option.
Though rare, some agencies offer a no-contract option. This allows you to end service at any time. Fees may be applied, but this may be a good option if you face financial difficulties or find that the service you are using isn’t working out. Those who don’t like commitment may prefer this option as well.
The standard option for most agencies is a term contract. These typically range from 3 to 12 months. These contracts can include performance minimums and expected services as well as all minimums and fees associated with payment. Payment is typically made on a monthly basis and can include the contract fee as well as PPC management fee’s.
Expected Rates and Fees
There are three components to PPC management agency fees: Monthly click budget minimums, the standard monthly base fee, and the percentage of ad spend fee.
The first component and one that you should be aware of before signing is the monthly click budget minimums. These are the minimum ad spend budgets that an agency will work with. This is especially important if the agency takes a percentage of ad spend as part of their fee. If you don’t meet these minimums, you may need to change agencies or renegotiate the terms of your contract. This can determine a lot of the expense. Smaller businesses with tighter ad budgets may want to shy away from agencies with high minimums.
The second component is the base fee. This can be structured in a number of ways, but the base fee can be considered the minimum you will pay the agency for their work each month. Some agencies charge this as a flat rate or have flat-rate plans that don’t add additional charges.
Some require a base fee, plus hourly expenses based on workload. Others have a base fee based on keyword count, tiered fee structures, or fees associated with each service, as an a la carte service.
The normal practice is to charge a base fee, plus a percentage of either ad spend, or a percentage of the total PPC advertising budget, both of which can become quite hefty and can range from a low of 15% and a high of 50% of ad spend.
You should assess your financial health and your overall marketing budget when deciding on the type of payment structure and agency to choose.
So, What Should You Really Pay?
Understanding the benefits and costs of a PPC marketing agency allows you to make more educated decisions on what to pay. What that number is for you will be dependent on a lot of factors.
The best answer we can give you is to do a hard inventory of your business’s finances and marketing budget and determine what you can afford to spend, even if things don’t go your way.
In general, you can expect a great return on your investment, and using a PPC management agency is a fantastic resource, but you shouldn’t over-leverage your advertising budget in case your conversion rate drops or your business suffers a downturn.
The rule is: pay what you can afford for the services you need most. Even a big business needs to be smart about where it puts ad dollars in order to maximize profits. Paying for things you don’t need is never a good idea.
If your account only needs light maintenance, do not overpay for a giant plan. If your account needs strategy, better tracking, new landing pages, and stronger reporting, do not expect bargain-bin management pricing to solve the problem.
The cheapest option can be expensive if it leads to poor targeting, weak pages, bad tracking, and wasted budget.
Be especially careful with cheap PPC management services that promise big results without asking serious questions about your goals, margins, offer, or tracking. Good agencies ask questions because the answers shape the plan.
Conclusion
Hopefully, this post has given you everything you need to know about PPC management agencies, how they work, their fees, and what you can expect to spend.
If you’re thinking of hiring a PPC agency or firing your existing PPC agency, get in touch!
Now you’ll have a better idea of what it’ll cost you and what you should and shouldn’t pay the agency you choose.
