Are You Paying Too Much For PPC Management?

30 Nov, 2009 | Written by Joe Balestrino | under PPC

I was speaking to a friend of mine who is an in-house SEO. The company he works for was looking to hire an SEM firm to manage their PPC campaign. He was shocked at the quotes he received and asked me if I’d take a look at them. So being the nice guy that I am, I did.

Now keep in mind these companies reside in upscale buildings in the heart of NYC, so their prices of course will be higher than most. Many of these companies charged about the same amount around 10 - 15% which didn’t shock me, but what did shock me was the 15% was on the spend. Now you may ask me “What’s the difference?” and I’ll get to that in a minute. But, what really shocked me was on top of the 15% of the spend they added an additional 1k to manage the campaign which just didn’t seem fair. Not every company taxed on an extra $1,000 to the percent, but the percent was in the ballpark.

In what I have seen, 15% is pretty high. Charging it on the spend is just wrong. What incentive does a company have to make you money if they are getting paid based on what you are spending? They can just increase your budget which will increase your expenses all around. A good PPC person or company charges you based on what you make. This gives them incentives to make sure they do everything they can to see that you make money. More money for you means more for them. Sure… some people will charge you a minimum amount.. for example $500 a month or 7% of sales revenue, whichever is higher. This model will still benefit the client because the consultant will want to make sure he/she gets paid more than the minimum.

Most small companies won’t deal with firms this expensive or large. But, try to look out what is best for you. You want the most out your campaign and you want someone that will be motivated to continue to increase your sales.

So, what was the suggestion to my buddy? Well, when you do the math… the cost to hire these firms would have been 7k a month. It would be better for his company to hire someone in-house to monitor the PPC since the campaign wasn’t very large and one person could handle the job. When it comes down to it… having another company running PPC and then an in-house person reviewing the data from the firm, it was smarter just to bring it in-house.

I personally never charge that much ever. I want my clients to be happy and I genuinely want to make them money. Heck, if they are happy I am happy and we both make money. Isn’t that what business is all about?