Imagine your products and services appearing right at the top of search results, ready to grab the attention of your ideal customers. That's the power of pay-per-click (PPC) advertising. But as enticing as that sounds, managing a successful Google Ads campaign can be complex. From keyword research to bid adjustments, it can quickly become overwhelming. 

This is where a marketing agency handles the intricacies while you reap the rewards. In this guide, we'll explore the average costs associated with Google Ads PPC management, dissect various PPC pricing models, and explain what's included in these services. By the end, you'll have a clearer picture of what to expect and how to maximize your ad spend for better returns.

Average Cost of Google Ads Management 

When managing Google Ads, businesses often allocate a significant portion of their budget to ensure professional oversight. Typically, about 10-20% of ad spend goes toward management services, representing a substantial cost, especially when media ad spend exceeds $10,000 monthly. With CPCs ranging from $0.4 to $1.5, these costs can add up quickly, making choosing a management pricing model that aligns with your business goals essential.

In light of this, businesses increasingly seek more predictable pricing structures that allow for easier budgeting and cost management. Flat-tiered pricing models offer transparency and cost consistency and are gaining traction. These models are particularly appreciated for their simplicity, allowing companies to scale their campaigns without surprises in management fees.

In the next section, we’ll explore the various pricing models used in Google Ads management and provide insights into their benefits and potential drawbacks.

Common PPC Management Pricing Models

Understanding PPC management pricing models is essential for getting the most out of your ad spend. Here's a breakdown of the most common options.

Flat Fee

The PPC advertising flat fee structure offers a consistent monthly charge for managing your PPC campaigns, providing an attractive option for businesses seeking predictable and transparent costs. This approach is beneficial for companies with set budgets, as it eliminates the fluctuations that can occur with percentage-based or performance-based pricing models.

Why Flat Fee is a Popular Choice:

• Predictable Costs: One of the flat fee model's most significant advantages is its predictability. Unlike percentage-based pricing, where costs rise with ad spending, a flat fee remains consistent. This allows businesses to plan their budgets more confidently, avoiding the surprise of higher management costs during high-spend months or seasonal spikes.

  • Example: A mid-sized eCommerce company found that under a percentage-based model, its management fees increased significantly during the holiday season when it ramped up its ad spend. By switching to a flat fee structure, it could control its costs while continuing to scale its campaigns.

    
    

• No Penalty for Growth: With percentage-of-ad-spend models, businesses essentially pay more as they grow their ad budgets, which can feel like a penalty for success. The flat fee model, however, allows you to expand your campaigns without the added financial burden of rising management costs.

  • Why It Matters: The flat fee model offers a clear advantage for businesses that plan to scale their advertising efforts over time. It provides cost stability, allowing companies to invest more in ad spend without worrying about management fees eating into their profits.

    
    

• Scalable Structure: Many agencies offer a tiered flat fee structure, where the management fee scales with your ad budget but in fixed increments. For example, an agency may charge $750 for an ad spend up to $10,000 and $1,500 for an ad spend between $10,000 and $30,000. This allows businesses to grow their ad campaigns while maintaining predictable management costs.

  
  

• Comprehensive Services: Under a flat fee model, agencies typically provide complete management of your PPC campaigns, including keyword research, ad creation, bid management, and performance tracking, all for one predictable price. This approach ensures that businesses receive end-to-end support without worrying about extra costs for additional services.

  • Example: A growing direct-to-consumer (D2C) fashion brand initially used a performance-based pricing model. However, as their campaigns expanded and ad spend increased, the variable costs became challenging. By switching to a flat fee structure, they gained financial clarity, enabling them to focus on scaling their campaigns confidently during peak periods like Black Friday without the concern of escalating management fees.

The flat fee model is ideal for companies looking for stability, transparency, and scalability in their PPC management, making it a top choice for businesses of all sizes.

Percentage of Ad Spend

The percentage of ad spend model operates on a commission basis, where agencies earn a percentage of your monthly advertising budget. This percentage typically ranges from 10% to 20%, with top-tier PPC specialists sometimes charging as much as 30%. 

While this model can align the agency's goals with your success, it may not be ideal for smaller businesses starting their PPC journey. If your ad budget is limited, you might find it challenging to meet the minimum management fees required by some agencies, potentially making this option less accessible.

Performance-Based Fees

The performance-based fee model ties your costs directly to the success of your advertising campaigns. Instead of paying a flat rate or a percentage of your budget, you pay based on the actual sales generated from your ads. 

Milestone Pricing

Milestone pricing builds on the performance-based model by focusing on business objectives like increasing click-through rates (CTR), boosting customer lifetime value, or growing revenue over time. This approach involves defining clear, measurable milestones between the client and PPC agency during the onboarding phase, ensuring both are aligned on the metrics that matter most for success.

This model evaluates performance based on key indicators, tying agency fees directly to tangible business improvements. The agency earns its fees when these milestones are met, with opportunities for bonuses when goals are exceeded.

For example, a fashion E-Commerce brand partners with a PPC agency using a milestone pricing model. The agreed-upon milestones are:

• Increase click-through rate (CTR) from 2% to 4% within 60 days.

• Improvement in return on ad spend (ROAS) from 2.5 to 4.0 through targeted ad placements and creative testing.

• Increase customer lifetime value (CLV) by 10% within six months through retargeting campaigns and personalized ads.

After implementing the new strategy, the brand's CTR climbed to 4.2%, surpassing the initial milestone. Their ROAS increased to 3.8, nearly meeting the target, while the CLV improved by 12%. As a result, the agency earned its base management fee and a performance bonus for exceeding the CTR and CLV milestones, ensuring both parties share in the campaign’s success.

Hybrid Model

Many agencies recognize that each brand has unique needs, and they adapt their pricing models accordingly. For instance, an agency might charge a flat fee for emerging E-Commerce brands starting with limited ad budgets. This provides a stable cost structure as they scale their advertising efforts. 

Conversely, for another brand, the same agency may shift to a percentage of ad spend model, aligning its fees with the brand's growth. 

Additionally, some agencies offer add-on services beyond standard management fees. While your monthly payment might cover essential PPC management and support, you could incur extra costs for services like campaign setup or multi-channel management. 

However, it's essential to consider that while hybrid models offer flexibility, they can also introduce unpredictability and a lack of transparency in costs compared to a straightforward flat monthly fee.

Next, let's see what you get when you pay for PPC management pricing.

What's Included in PPC Management Pricing?

PPC management encompasses all the essential tasks involved in launching, executing, and optimizing your advertising campaigns. Here's a breakdown of the key services included in your PPC management pricing.

Campaign Development and Strategy

Before launching a PPC campaign, you need a solid strategy based on thorough research. Key considerations include:

• Keyword Analysis: Identifying the right keywords that your target audience uses to find products similar to yours, along with analyzing competition and search volume.

• Channel Management: Understanding which PPC channels, such as Google Ads and social media platforms, are most effective for reaching your audience.

• Audience Research: Using AI and analytics to define your target customers and their preferences.

• Custom Audiences: Tailoring your ads to specific audience attributes to enhance engagement.

• Campaign Goals: Establish measurable objectives to guide your campaign's success. 

  
  

Structure and Campaign Setup

Setting up the proper account structure is crucial for effective campaign management. This includes:

• Ad Groups: Organize your ads into relevant groups based on specific themes or products to enhance targeting. 

• Ad Copy: Crafting compelling ad titles and descriptions that resonate with your audience and encourage clicks. 

• Bidding Strategy: Determining competitive bids for keywords while staying within budget constraints to maximize ad placement.

• Remarketing Setup: Establish criteria to target users who have previously interacted with your brand, personalizing their ad experience.

  
  

Performance Reporting and Analysis

To gauge the effectiveness of your campaigns, performance reporting provides crucial insights into key metrics such as:

• Website Traffic

• Conversion Tracking

• Return on Ad Spend (ROAS)

• Clickthrough Rate

These insights allow you to assess how well your ads connect with your audience, providing valuable information for adjusting your strategy to enhance profitability.

Ongoing Optimization

Your initial ad campaigns might drive traffic, but maintaining and improving results is essential. This is where continuous optimization comes into play.

• Keyword Research: Regularly updating keyword strategies based on performance data.

• Ad Optimization: Analyzing your ad to check what works and what doesn’t. For instance, GoMarble’s expert marketers use its AI Audit Tool to analyze your ads to identify areas of improvement.

• A/B Testing: Optimize performance by experimenting with different keywords and ad formats.

• Updating Negative Keywords: Refining your targeting to exclude non-relevant searches.

• Conversion Rate Optimization (CRO): Adjustments to enhance user experience and increase conversions.

• Bid Adjustments: Fine-tuning your bidding strategies as necessary.

• Improving Quality Score: Working on factors that enhance your ad rankings and lower costs. 

While this overview covers the primary services included in PPC management, it highlights the extensive workload and expertise required from an agency—underscoring that the cheapest option may not always deliver the best results.

Now, let's explore whether PPC management is the right choice for your business.