Finding out how much does a paid advertising agency needs to be broken down. There are two main costs associated with getting a paid media agency to run your account. There are the costs of clicks generated, payable to the ad service provider (Bing or Google normally), and the management fee/retainer to the agency.
When being quoted by a paid advertising agency, there should be a clear idea of how they have valued the fee/retainer that they charge you. This should be linked back to the value of a conversion to your business, and so a good pay per click agency will always be interested in this data so that they can charge you a fee that will lead to a return on investment.
Model: Fixed fee quotes are the most straightforward for all parties and after the service has been defined a project or monthly retainer is worked out.
Drawback: Sometimes working on an account incorporates other activities and this leads to questions whether the activity is included within the fee or is an added extra.
Model: You pay the agency a fee per established metric. This could be for an enquiry you receive or a sale, there are many options and you need to determine what is the most valuable metric for your business.
Drawback: The downside to this metric is that it is difficult to accurately track a metric that a PPC company would have a large amount of control over, as other factors such as landing page, copy, and your call to action also play a part.
Model: This is the traditional advertising agency model. Pay per click management fees are assessed based on how much you spend in your PPC accounts. Paid media agencies can quote fees that range between 15-30% of your total PPC ad spends.
Drawback: The major drawback of this model is that it might not encourage your paid advertising provider to manage the budget effectively, as spending more means a higher fee.
Model: The agency quotes the cost based on the amount of time they spend managing the account each month.
Drawback: Some companies could waste time being inefficient to increase their wage
All paid media agency prices will vary, mainly down to the rates that the agency charges. Finding the ‘right agency’ for you is important.
All agencies are different and all will generate different results.
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