-
PPC Agency Fees
Hi,
What percentage should a PPC agency charge in a performance based pricing plan? I.e. say one conversion is worth £5000. How much per conversion should I be paying the PPC agency roughly?
Thanks.
-
1 Reply
-
Usually percent fees are based on ad spend amount. Not what the conversion is worth. You can find agencies who will charge you based on revenue, conversions but those fees will vary from agency to agency…..seen agencies do anything from 3% – 10% still.
-
Where I live most agencies have a 15% fee on media spend.
This percentage can be less sometimes I’ve seen 14, all the way to 5%. But the 5% was because the client had a gigantic budget -
Our agency charges a flat fee per month or percentage of spend. You should not be paying per conversion IMO.
-
Most agencies will charge either by percentage of ad spend, or a flat monthly rate. Usually that percentage is in the 10-20% range of ad spend. The flat rate will be comparable in most situations. More or less depending upon complexity.
I would assume the conversion-based pricing is similar as well. It’s not a super common method because there are so many variables.
-
Percentage or flat rate plus percentage based off level of spend
-
Have you talked to agencies yet? Like a few said already, most charge off spend or have a flat rate. It’s the only way they stay in business.
If you’re able to do it off conversions or some bottom line figure and they agree, do whatever you choose is fair. I know some savvier ones do like to basically take from what they basically help the business do – grow extra income. However, make sure the tracking and the attribution is down pat if you do that. Remember there are many sources of traffic and ultimately revenue. Nailing down what actually causes the conversion even tho the ad may be the last touch is not exactly precise. Rather, depending on the biz, it could be one of many touch points. For instance, there was a study by google that highlighted a car supper would have literally 800 or so touch points from many different online assets before making a decision. I imagine your business requires less, but if one conversion is garnering 5000 ?, maybe it might be that complicated.
As a result of he complexity, it’s easier to just charge off the media spend or a monthly retainer.
Log in to reply.