Are you paying too much for PPC management?

I first got involved with search advertising while promoting a book I wrote called 35 Miles From Shore. The book tells the true story of a 1970 airliner that ditched in the Caribbean Sea and the efforts to rescue those who survived. Some have described it as a cross between the Titanic and the The Perfect Storm. Okay, I'm the one who describes it that way, but it's not that far off the mark. The book was released back in 2008 and remains a top aviation title thanks in large part to my online marketing efforts, including pay per click.

My first attempts at setting up a campaign resulted in almost no benefit to me. It wasn't until I took the time, about six months, to learn the intricacies of Adwords before I started to see results. I've been learning ever since. The fact is that if you want to be successful with search advertising you need to either spend the time to become an expert yourself or hire one.

You certainly don't have to be an expert to set up a campaign. Google will give you just enough guidance to get an ad up and running. But if you don't understand the process of campaign optimization, you're going to be frustrated with the results and more than likely consider the whole thing a waste of time and money.

So the answer is that for most companies and individuals new to search advertising, hiring a PPC consultant is a good idea. It may cost you more money in the beginning, but over time you will actually save money and you will definitely out perform your competitors who have not hired a consultant.
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I'm guessing that if you're reading this article you've probably already come to the conclusion that you need a PPC consultant. I'm also guessing that you've found it difficult to understand where we consultants come up with our fee structure. The fact is there is no set fee structure in the world of PPC consulting. Additionally, most companies will ask you to contact them first before they reveal their prices. I do this as well and there are a number of valid reasons for this. For one, when you openly advertise your fees it makes it much easier for your competition to match or underbid you. It's sort of like going into an auction when you know beforehand what everyone else is bidding. Another valid reason for a consultant to have you make a quote request first is that setting up a PPC campaign is a multi-step process that is unique to each product or service. The more I know about your product or service, your goals, your current advertising efforts, and your expected budget, the better I am able to provide you with a realistic estimate of what I think it will cost for me to manage your campaign.

As a result of this need to protect pricing, there is little data available on what people are actually charging for their services. It's only when you do some thorough research that you begin to get a clearer picture. What happens is that someone considering becoming a PPC consultant will start asking or snooping around to find out what everyone else is charging. If they find two or three people charging a certain rate, they'll latch on to that rate and make that their own.

There are a number of problems with this method. One, everyone wants to make a decent living. So we all want to make as much or more as the next guy. So if I hear that so and so company is charging X amount of dollars then I should be charging the same too, especially if it's a high number.

Effective search advertising requires specialized skills. You have to be somewhat technical to understand how, when, and where to install various tracking and remarketing codes. The same is true with mastering the interface where campaigns are controlled. You have to understand web design and SEO and how they all must interact efficiently. You need writing skills and the ability to write effective ad copy with very limited space.

While there are degree programs in search advertising, the real value comes from hands on experience working with actual campaigns. So what you see a lot of are web designers who, due to competition, have decided to put a blurb on their site saying that they offer PPC management services, too. More than likely they've created their own campaign to advertising their web design business and they think that that qualifies them to be a consultant. So now everyone is a PPC consultant and no one knows what anyone else is charging so everyone charges the highest rates they can because that's what everyone else is doing.

You can spot the pretenders easily. Do they have any actual content related to pay per click advertising on their site? Do they list the services they provide related to PPC advertising? Do they have any actual search advertising clients? And most importantly, are they Google qualified? If you find someone who matches all of the above criteria, then chances are that you have found a qualified PPC consultant.

When it comes to PPC consulting, there are a few standard pricing models. One of the most popular is the percentage of spend. You spend a $1,000 a month on advertising and then you pay me anywhere from 10% to 30% of that amount for me to manage your account. So if my fee was 15% of your advertising spend I would get $150 a month to manage your $1,000 a month campaign. That's not much is it? So what you'll see is a lot of consultants insisting that they won't take on any clients unless they have a minimum spend of $3,000 a month or more. Fifteen per cent of $3,000 is $450. That's a little better, but some consultant's minimum spend is $10,000 per month. Forget the fact that as a consultant you do the same amount of work on a campaign with a $3,000 a month budget as you do on a campaign with a $300 a month budget. So where is the reasoning behind this pricing model? The truth is that this is how old school advertising agencies used to charge for their services. And since a lot of the early adopters came from this world, that's how they decided to charge. But it makes no sense. So the more money you spend the more money I make. Well then Mr. business owner I am sure that we can get you more clicks if you were to increase your budget. Yeah right.

One recent trend I've seen is performance based pricing. You'll see companies with advertisements such as "you don't pay us a dime unless we increase your sales or leads by 25%." That's an appealing offer to most business owners. I don't have to pay anything unless they increase my leads by 25%. Where do I sign? Here's the deal. You take any website that's not running a PPC campaign and then add PPC traffic, and you will increase the amount of site visitors by hundreds of per cent. You could go from 20 visits a day to 200 a day with PPC. Now I'm looking like a genius. Not only did I increase your leads by 25% I increased them by 1,000%. Give me a break.

Another popular pricing model I've seen revolves around keywords. The more keywords they use in a campaign the higher your costs. Here's a secret. The amount of keywords you have in a campaign has no relevance to how well the campaign will perform. Some of the best campaigns use five or less keywords. And adding keywords is as easy as loading up Google's keyword tool, which will gladly supply you with hundreds of keywords and keyword phrases. So where's the reasoning behind this pricing model?

Last but not least is the hourly rate. You only pay us for the time we spend on your account. So what's the going rate? It's around $100 to $150 an hour depending on what part of the country you live in. Most companies using this pricing model will offer different levels of service - you've seen these they're usually advertised as something like bronze, silver, and our best package the gold package.

As with all of the above pricing models, some are better than others and just because they're using one of these pricing models doesn't mean it's not a reputable company. It's just the way things have been done since day one.

So what pricing model do I use? I've always felt that if you do honest work that you should receive an honest wage. Since I am my own boss, I am free to charge whatever I want. I could say that I like the idea of making $1,500 or more a month in PPC management fees. All I have to do is get three or four clients and I'm set. After all, there is a limit to the amount of clients you can effectively manage, thus a limit on your earning potential. So there is motivation for squeezing as much as you can out of every client. But that's not a good way to do business. It's certainly not a good way to create lasting relationships.

So I've come up with a pricing model that is unique to my company Click Here Online Marketing. It's based on time and blocks of adgroups. How much time is it going to take me to setup and manage this campaign and how many adgroups will get me the best performance. I'll need another article to explain what an adgroup is. For now just know that an adgroup contains one or more ads targeted toward a specific product or service. A single product or service could have four or more adgroups. An example might be a wedding photographer. He could easily have the following adgroups: wedding, video taping, search, display, and remarketing. It's the same service but I'm marketing to different market segments. So the more adgroups you have the more work I have to do and the higher the costs. But I'm a small business owner myself. I've put myself in your shoes. I'm not going to charge you more than what I would be willing to pay for the same service.

I also do something different than all other PPC management consultants, I charge on a sliding scale. I know from experience that I do a lot more work during the first four months of a campaign than I do once I have the campaign running smoothly. But just because I have your campaign optimized doesn't mean it can't be improved even further with more fine tuning. Add in the constant influx of new features, the need for new ads, multivariate testing, new products, etc., and you can see why it pays to have someone monitoring your campaign on a regular basis.

So my pricing model accounts for the drop off in the amount of time I might spend on an optimized campaign. I'm pretty good at what I do. I'm confident that after four months you'll want to continue having me manage your campaigns. So to make it an easier decision for you to keep me on, I'll reduce my fees after four months to a level that works for both of us.

While I don't advertise my fees on my website for the reasons stated earlier, I will send you a copy of my price sheet. Just click on this link St. Louis Adwords Company and fill out the form in the sidebar. Then you can judge for yourself if my PPC management rates are competitive or not.

Pay per click consultant Emilio Corsetti III