Hiring an agency for our software app [retainer question]

[fathom53]

Define success… could be a lot or it could be really cheap. It becomes expensive if they can not deliver.

[youngsnaak]

I think it is expensive not knowing what kind of ROAS they will get in comparison to your current ROAS.

[Happy–Human]

It depends on the work volume and manhours. 4k for 3 channels is not a lot of money. When you say Google Ads, are you doing Search, Display, YT, Shopping, Discovery and App campaigns? Are they dedicating one account manager to you plus an account exec? Or just an account exec? Are you expecting them to allocate 2-3 hours a day on your account or less than that? Will you be sending them creatives and assets every other day for new campaigns and offers?

Answering these questions will allow you to determine whether you’re overpaying or not.

[zadro]

You’re paying someone $4k to manage a $5.5k monthly budget, so $9.5k total/month? That’s a very high fee in relation to spend. Management fee should typically be around ~20% of the ad budget.

[Comically_Depressed]

Seems quite high.

[JordanGBMC]

It depends, it’s not far off average from that I’ve seen. They’ll charge more if you’re making more as a business, so it’ll change.

If they generate you 4x+ per month, then it’s probably justified – if it’s less than break even, then it’s not justified.

[Viper2014]

I believe it is a bit much considering your ad spend. *

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*I am assuming that they also provide media.

[Barokna]

It really depends on what they actually do. I had a client, spending around 900-1000€ for 50.000+ adspent per month. Just because it was mainly shopping campaigns that didn’t require much work since they managed their feed by themselves.

It also depends on how much they intend to increase cost in the case of more adspent. They might do a lot of groundwork and be able to easily scale adspent to 5x while staying profitable and not raising their fee by much.

The actual workload usually doesn’t change much wether you have 5.000 or 25.000 adspent.

But anyway. When they talk about roas always calculate their fee as well.

[DanAffid]

There’s no answer. We charge a minimum fee of 50K/m. Is it justified? It’s justified for us as we have a line of clients waiting to work with us. Could you get similar results cheaper elsewhere? Maybe yes, maybe no. If your needs are simple and your budget is small, probably yes – don’t buy a Lamborghini if you’re a slow driver

[ggildner]

It is not necessarily expensive considering they are actually charging $2k per platform (counting FB/IG as one). And I would assume they’re doing analytics and reporting as well.

However, without any knowledge of success and profitability, it could get really expensive really fast. It’s definitely not *cheap*.

[vvineyard]

$5k for one channel for a national campaign is average for PPC. You get what you pay for.

[gdaily]

We would be charging around $1,500 and landing pages would be included.

[10thgradelosers]

> With this retainer, they’ll be executing and managing our ads across FB, Insta, & Google.

There’s a minimum level of work required to do a good job on those networks but that will also be affected by your account complexity. Also, creative updates and etc easily run up time if it’s frequent. Same goes for your reporting and call requirements.

[Zero-Star]

Their fee sounds reasonable given the channels, but I don’t think it makes sense for you as a business to be honest because there’s just not enough budget there. I would look at a small agency or even a credible freelancer who can bring it in for $2,000, but admittedly they’re much more difficult to find.

[shakeitthenyabakeit]

yes and no. the revenue they will need to drive to justify these costs may be very difficult to attain. You may already have thought of this, but consider your Net ROAS (Revenue – margin/ Channel costs + Agency Fees) in this decision.