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In terms of management fees, how do you deal with managing 2 channels (e.g. FB + Google)?
Typical mgmt fee structure is tied to spend, often with a minimum.
If you’re running ads for a client using Facebook ads and Google ads, do you keep it simple and base your management fee off of the combined spend?
e.g. let’s say Google Ads spend is $1500 and Facebook is $500, would you charge your fee simply based on the $2000 total spend?
The reason I ask is because clearly it’s more work to manage 2 separate channels, but I wouldn’t want to overcomplicate the fee structure.
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1 Reply
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We charge a flat rate for the vertical. Example: $10k for Home Services, regardless of channel. Our clients operate on Operational Expenses – and that’s how we’re paid commission. We all shared in the losses or we share in the profits. It creates a tighter relationship. We charge a sliding scale of commission from 3% – 26%.
(3% is absolute bare minimum, unless there is a loss then there is no commission)
Not everyone can do this because it takes a very close business relationship to be able to have that kind of transparency and trust. Good luck!
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Most agencies stick to % of spend under management with a minimum monthly fee.
Something like 15% of spend with a $5k/month minimum agency fee is common for small to mid-sized agencies. They don’t charge more for additional channels, because the spend increase per channel already accounts for that.
Sounds like you’re working with a small budget for each channel, but your minimum fee should be priced to take care of this. The amount of “work” you do in each channel is limited by budget anyway. You really shouldn’t be running too many campaigns / audiences / creatives or making tons of regular changes with that size budget. It should be a very simple setup and consolidated structure with few changes made throughout the month. Don’t overcomplicate it.
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There is no “right” way to do this. At my agency, we used to charge a single fee for total ad spend. But we realized that a number of clients would spend a lot on one core platform and then “experiment” with tiny budgets on other platforms.
This meant we were essentially not get paid anything additional to do 2-3x as much work as if we just managed one platform.
And while it’s possible you strike gold and the client increases spend, experience tells me this rarely happens. If you’re going to properly evaluate an ad platform you need to make a healthy investment.
As such we now charge a separate fee, each with a minimum and based on tiers per platform. This makes much more sense and prevents clients from taking advantage of a situation.
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We charge based on hourly estimates that we’ve agreed on beforehand, and the hours are different based on different channels (search term analysis takes longer than launching a Facebook banner, for example). It’s not ideal, but since most of our clients are small or very small businesses, basing our fees off budget would kind of suck. Then they’re also free to change up their budget based on seasonality and our fees won’t change because of that.
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