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Hiring an agency for our software app [retainer question]
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is it performance-based? If it is then it might make sense but as a flat fee most likely not. Then again, how good is their track record?
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Make sure if/when they stop managing the ads you actually own them!
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7.5 – 15% can be the standard if you’re in a commission model.
15% of $5500 is not much at all, they aren’t going to make money considering they need to manage two platforms (FB / Google)
If there is set up (accounts, reporting, etc.) then sometimes there is a fixed set up cost.
Are you planning to scale spend and grow with them?
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lol man, that’s absolutely ridiculous. i usually charger $1.5k per month for ad spends between $5-10k
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Pricing seems fair relative to the scope of work for the 3 platforms and 2 ad managers that will be setup and managed. No YouTube Ads huh?
I personally never understood why an agency would offer pricing based entirely off of ad spend.
The strategies, experience and systems an expert ad agency rolls out is what you are paying for.
Not sure how that changes as the ad budget does.
Also it seems silly (to me) to change pricing all the time based on whose in front of you.
If it were me I’d feel weird to be charged way less or more because how much I spent in Ads but we both get to work with the same consultant or agency.
Even with minimum ad spend requirements.
There is only so much A/B testing that can be managed in the beginning and if it is a new ad account spend will be conservative until the KPI’s are dialed in so the agency and client have a conflict of interest to scale spend.
Fixed pricing or Fixed pricing + small % of ad spend over Roas has always made much more sense to me and allows both parties to have common interest at all times.
Profit
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flat fee for most agencies is from $1k to $3k + some kind of bonus from ~10% of revenue generated or %bonus by achieved roas
(if its a performance contract)$4k is a lot, but a retainer doesnt mean they take all the money, its just there, doesnt mean they take it all. you should clarify that one with the agency.
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I’d say that’s cheap but I’d also you probably have to spend more in the actual ad spend to gather the data and let the agency learn what is going to work. $2750/m/platform isn’t that much for google and fb/ig.
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That seems VERY steep.
The most important factor is the results they produce. If they can get you a significant ROAS and you’re making a good profit that is what matters at the end of the day.
We’ve been in business 8 years and have scaled up each year. But these past two months with apple’s IOS update we are watching the numbers like a hawk. Our returns are lower and it doesn’t justify the amount we are currently spending. We can’t spend money on ads when the return is a 1.5 ROAS
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