When entering a procurement process, pricing is usually one of the most important, if not the most important factor when deciding which company to award the business to. As mentioned there is a broad range of pricing options available for businesses seeking PPC management. Whilst this maybe a benefit in terms of providing companies with a variety options that suit their budgetary requirements, it can make it difficult to judge how much to spend and what the difference is in service levels.
For example, some companies will charge as little as £200 per month for pay per click management whilst others will charge up to £5,000. The charges are usually based upon a percentage of you monthly spend on clicks, either on Google, Yahoo or MSN, typically between 10% and 15%. However should have a relatively small monthly spend (£2,500 or less), then you are likely to be charged a retainer fee of around £250. Unless you are intending on spending a large amount on clicks each month (over £5,000), you are also likely to pay a set up fee. The amount you pay for a set up fee can range hugely on how big the campaign will be in terms of keywords and also which company you choose. Some of the larger agencies can charge up £2,000, whereas smaller agencies may be up to 75% cheaper than this.
Knowing what service you will receive is a very tricky task to judge. Getting feedback from the agencies current clients is the best way to find out how good an agency is. Any agency worth their salt will have no qualms about you approaching any of their current clients. Pick a handful yourself and ask to speak to them about the service they have received. Many search agencies seek to maximise their own revenue by assigning lots of clients to each member of staff, lessening the standard of service.
So what should you be receiving from your agency?
- Regular contact
- Updates on performance / strategy / optimisation
- 100% transparency
- KPI (Key Performance Indicators) reports
- Usability Advice
As the management fee is based on monthly click spend, some agencies tend to spend as much of your budget as possible, even if it is not improving your ROI. Known as “budget burning” this practice means you may be paying too much each month without a suitable return.
You will want to entrust your PPC campaign to a reputable company. Many agencies stake their reputation based on the stature of their client lists. Whilst this may seem logical to offer your management contract to one of the established agencies with the most impressive client list, it also true to say that they will more often than not be the most expensive. Does your business fit in with those on the clients list? Remember you will be one of many when working with these sized agencies.
Equally, it may also be tempting to see PPC management as a standard service that is similar in quality whomever you choose, and thus always opt for the cheapest option. Because of the amount of technical and creative know how needed to run a successful PPC campaign, the performance and service you receive is likely to vary from agency to agency.
You will never quite know how good or bad an agency is until you experience their services for yourself and there are of course, no guarantees. Doing some thorough research and finding out how they have performed for other similar sized companies to yourself, should help to reduce the chance of making the wrong decision.
Finally, try to avoid signing long contracts that tie you in for a protracted period of time. Often companies with a poor retention rate lock new clients into yearly contracts to guarantee revenue.