PPC advertising brings immediate results, increases awareness by up to 80%, drives website traffic, and brings a 200% return on investment (ROI). Although its undeniable effectiveness, businesses often have concerns about PPC price and fitting it into their existing budget.
This article will address common concerns related to PPC agency pricing. We'll discuss PPC pricing models, break down the average costs for different PPC metrics, and identify the factors influencing PPC prices. By understanding these aspects, businesses can make informed decisions and ensure their PPC campaigns are both impactful and budget-friendly.
Table of Contents
Five PPC Agency Pricing Models
Before we start talking numbers, you must understand five different PPC agency pricing models: percentage of ad spend, flat fee, per
1. Percentage of Ad Spend
Under this model, the PPC agency charges a percentage of your monthly ad spend as their management fee. The rate can vary, typically from 15% to 30% of the ad spend.
For example, if your monthly ad spend is $3,000, and the agency charges 15%, you will pay them $450. Usually, as your ad spending increases, the percentage charged by the agency decreases. So, for a $50,000 monthly ad spend, the agency might reduce its fee to 7%.
Pros:
- It aligns with your ad spend, which makes it fair for small and large budgets.
- Agencies have an incentive to optimize campaigns for better results.
Cons:
- As your ad spending grows, the management fee increases.
- Agencies may focus more on ad spend increase than campaign performance.
2. Flat Fee
The flat fee model involves paying a fixed amount to the PPC agency every month. This pricing approach offers predictability in the budget, with no hidden fees.
For example, a PPC agency may charge $2,000 monthly as a flat fee to manage your PPC campaigns. Some agencies might use a tiered flat fee model, where the fee increases with the size of your PPC budget. For instance, if your monthly PPC budget is $5,000, they may charge a flat fee of $1,000 per month, and for a $30,000 budget, the price might be $3,000 per month.
Pros:
- Fixed monthly costs allow you to plan your budget precisely.
- No surprises or hidden fees.
- Suitable for businesses with consistent ad spend.
Cons:
- It may not be cost-efficient for small ad budgets.
- Doesn't account for variations in campaign performance.
3. Performance-Based Pricing
With a performance-based pricing model, agencies charge based on the results they achieve, often focusing on lead generation or specific conversion actions. For instance, the agency might only ask for payment based on the number of leads they bring in or the number of completed forms. While this model can be appealing, businesses should be cautious and work with credible agencies to ensure high-quality leads that actually convert.
Pros:
- You pay only for results.
- Agencies are motivated to deliver high-quality leads and more conversions.
Cons:
- You must find trustworthy agencies to avoid low-quality leads.
4. Project-Based Pricing
Project-based pricing involves a one-time fee for a specific PPC project or campaign, regardless of the ad spend. For example, if you need an agency to create and manage a PPC campaign for a product launch, they might quote a fixed price for that specific project. Project-based pricing suits businesses with a clear and well-defined scope of work for the PPC campaign.
Pros:
- Clear and fixed costs for a specific project or campaign.
- Ideal for short-term campaigns with well-defined scope and objectives.
Cons:
- Not suitable for ongoing or long-term PPC management needs.
5. Hourly Rate
Some PPC agencies charge based on the number of hours they spend managing your PPC campaigns. They will provide an hourly rate and you'll be billed according to the time spent on your project. For instance, if the agency charges $100 per hour and spends 20 hours a month managing your PPC campaigns, you would pay $2,000.
Pros:
- Transparent billing based on the actual time spent on your project.
- Suitable for small projects or occasional PPC management needs.
Cons:
- Cost can vary depending on the agency's hourly rate and the complexity of the tasks.
- Agencies might prioritize billable hours over results.
- Some agencies do not offer this pricing model.
- Businesses should carefully evaluate their needs and budget constraints to choose the most suitable pricing model for their PPC campaigns.
Average PPC Rates in 2024
Here's a breakdown of the average costs for PPC management in 2024:
Metric | Average Cost |
Cost per click (CPC) | $2.59 / click |
Cost per mille (CPM) | $3.12 / 1000 impressions |
Remarketing | $0.66 – $1.23 / click |
PPC management tools | $15 – $800 / month |
PPC management services | $350 – $5000 / month or 12-30% of ad spend/month |
PPC ad spend | $300 – $100+ million / month |
By being aware of average PPC costs, you can make informed decisions to allocate your budget effectively and partner with a PPC management provider that best suits your needs and financial capabilities.
Factors That Influence the Cost of PPC
- Company Size
- Industry
- PPC Strategy Size and Complexity
- PPC Ad Network
- PPC Agency Experience and Reputation
The final PPC advertising cost may vary depending on several factors, such as company size and industry, campaign complexity, and the expertise of the chosen PPC agency.
1. Company Size
Company size often dictates the marketing budget and influences PPC agency pricing. Larger firms have bigger marketing budgets which translates to larger PPC spending. These firms have complex campaigns and target broader audiences, diverse regions, and various products. Consequently, agencies charge more to handle these extensive and multifaceted campaigns.
On the other hand, smaller businesses with limited budgets might focus locally or on fewer products. Their campaigns could be less complex, causing lower agency fees.
Average PPC management spends based on a company’s size:
- Startups: $300 – $1000+ / month.
- Small businesses: $1000 – $10,000+ / month.
- Mid-sized businesses: $10,000 – $500,000+ / month.
- Enterprises: $500,000 – $100,000,000+ / month.
2. Industry
Different industries have different levels of competition, which impacts costs. More competitive industries have higher costs, and agencies must craft refined strategies to ensure businesses get good ROI. Because of these challenges, agencies might change their prices based on the specific needs of each industry.
For example, industries with the highest CPC include attorneys and legal services, dentists and dental services, and the home improvement sector at $6-8 per click. The lowest CPC is recorded in real estate, arts and entertainment, and travel at under $2 per click.
3. PPC Strategy Size and Complexity
Simple campaigns target one specific area (like a town) and promote one product or service with a few ads. The complex campaign targets multiple regions or countries, promotes various products or services, uses different ad formats, and has layered strategies to optimize performance and deliver the best results.
Multifaceted campaigns require more time and expertise, and agencies invest more resources and tools to handle them. Given the increased workload and expertise required for complex strategies, agencies may charge more.
4. PPC Ad Network
Different PPC ad networks have different cost and management complexities. Google Ads is a major player in PPC, but its popularity means higher competition and costs. The average PPC cost on Google Search Network is $1 to $2 per click, while Google Display Network is cheaper - the average CPC is less than $1. Microsoft Advertising is more affordable - the average CPC across all industries is $1.54.
Each network's unique characteristics, like user behavior and competition levels, affect campaign strategies. An agency's expertise in a particular network, combined with the network's cost structure, influences pricing. Managing ads on multiple platforms also increases costs due to the diverse skills and tools required.
5. PPC Agency Experience and Reputation
Established agencies with a track record of results delivery might have higher fees. Their expertise, backed by years of experience and industry recognition, assures clients of effective campaign management. Data-backed case studies, client testimonials, and industry awards can all attest to an agency's proficiency.
Newer agencies might offer competitive rates to gain market traction. However, a seasoned agency's higher fee often promises better strategy, insights, and potential returns.
What Services Does PPC Management Include?
From keyword research to monitoring and adjusting, PPC advertising management encompasses various activities for setting up, optimizing, and maintaining PPC ad campaigns. Some of the key services that are typically included in PPC management are the following:
- Campaign strategy creation
- Keyword research
- Competitor and market analysis
- Ad and landing page design
- Ad copywriting
- Bid management
- Geo and demographic targeting
- Conversion tracking
- Performance testing and optimization
- Reporting and analytics.
Wrapping Up on PPC Agency Pricing
Understanding the costs of hiring a PPC agency is crucial for any business considering this form of online advertising. PPC agency pricing is an investment in expertise, strategic development, ongoing optimization, and detailed analytics. By collaborating with an agency, you can access industry knowledge and tools to elevate your campaign's success.
While costs might initially seem high, the potential for increased conversions, higher quality leads, and more efficient targeting often justify the expenditure. As always, it's important to select an agency that aligns with your business goals and budget to get the most out of your PPC efforts.
PPC Agency Pricing FAQs
1. How much do PPC consultants charge?
How much PPC consultants charge mainly depends on the chosen pricing model. The percentage of ad spend usually ranges from 15% to 30%, while you can also opt for a flat fee (price depends on the project’s scope), performance or project-based pricing, or an hourly rate.
2. How much is PPC per hour?
The average US-based PPC agencies charge their services approximately $150/hour.
3. Is PPC still worth it?
Yes, PPC is still worth it (and probably will be in many years to come)! When executed correctly, PPC advertising provides immediate visibility in search engines, targets specified audiences, and brings a measurable ROI. However, the exact value depends on the industry, keyword competition, and the effectiveness of the campaign management.
