PPC Management Fees.
There are many ways to price management of pay per click campaigns. Last April, four pricing models were addressed at Search Engine Land. But what is an appropriate fee? Kevin Lee, of the Didit agency, believes PPC management fees may be too low. He states that he has seen fees below 10-20% of ad spend, and the former article states that fees are typically between 5% and 20% of PPC spend. While there are several models of charging for PPC management, I’ve always believed it to be a standard industry practice to charge around 15%. I have, however, seen incredibly low monthly fees, based on rates in the range of $15/hour, as well as percentage based charges at less than 5%.
So what is a reasonable management fee? Honestly, I don’t know that I have an answer. But I can say that agencies don’t all work solely with PPC. If an agency works in site design, copywriting, SEO, social media, and a slew of other services, and are good at what they do, they often charge premium fees for the quality of their work and their expertise. What would be a reasonable management fee for a prospective client looking to spend $1000/month in the PPC ad networks with no other work for the agency? Say an agency decides to charge 15% of the PPC ad spend. In that agency, they will see revenue of $150/month. If the person managing that PPC account can be billed out to clients on a site design for $300/hour, the agency would effectively lose money on the PPC client if the employee spent more than 30 minutes managing the campaigns over the course of the entire month.
Employee on Site Design Job = $300/hour.
Employee on PPC Management = $150/month.
Half an hour on site design job = $150.
The employee above would not want to spend more than 1 minute per day managing the accounts to stay profitable for the employer.
I can tell you from experience that managing a PPC campaign takes more than 1 minute per day. Even with Google’s Adwords Editor, or a 3rd-party PPC management tool, it takes longer than 1 minute to understand the top-level numbers, and reporting on them or making changes is time on top of that.
So if you’re going to pay even the industry rate of 15%, it begs the question of how much time will the PPC manager actually spend on your account? If an agency charges $30/hour for all work, they might be able to spend enough time on a $300/monthly PPC management fee (on a $2,000/monthly PPC spend) to make your campaigns work. Similarly, an agency who bills some tasks at $200 or more for consultations probably won’t make money on you as a client if they spend too much time on a $300/monthly fee, and might be doing you a disservice.
Certainly you should not be purchasing PPC management from an agency based on pricing alone, but it’s important to understand the agency side of things. Now, it’s also important to understand that an agency who does charge 15% fees may be willing to “lose” money on a client, as it’s really the opportunity cost that is lost. If the agency does not do a whole lot of site design at $300/hour, they may gladly spend the time and energy on a PPC campaign that is effectively a $20/hour job.
And that’s not to mention that agencies may pay their employees accordingly. Perhaps PPC management does not cost as much, but the employees are similarly not compensated as well as one who can do site design. Agencies often have very distinct roles for employees, so they don’t run into the issue of wanting to put an employee on one job as opposed to another.
So when selecting a partner for PPC management, find out more about the process and what is included in the management fee.
Guaranteed Rankings Permitted?
I could guarantee your site will rank in the top ten for keywords.
I could tell you what keywords I will use to achieve those rankings.
What I can’t tell you is how long it will take to rank.
The firm I work for won’t guarantee rankings, and I agree with that, but let me put my take on the guaranteed rankings debate anyways.
Some companies still guarantee rankings, but even they can’t tell you how long it will take. (If they do, it should never be less than 2-3 months, as Google indexing and other crawlers may not come around any faster than that, regardless of what the firm says. Sitemaps, paid inclusion, and linking strategies can speed things up, but indexing is still different from ranking (which is another topic altogether)). Some of these companies say that you don’t pay until you rank, or maybe you pay but you will get your money back if they don’t achieve rankings. I can understand the attractiveness of free service until results are seen. As new sites popup every day and are optimized for keyword rankings, and your competitors are already ranking for keywords you want to rank for, why spend the money on someone who doesn’t guarantee?
A guarantee of rankings is a performance-based business model. If the SEO firm does not perform, they will not get paid. Based on that, they should only take the clients where they believe they will achieve top ten rankings quickly. This means that they should analyze sites prior to signing a contract or they risk losing money. As comparison, an attorney may take some forms of cases on a contingency fee, meaning they only get paid if they win. If they do not win, they lose the time and money invested in the case, and they might just permanently lose the client, all when they could’ve been working on a winning case. My understanding of social security/disability insurance (SSI/SSDI) cases, is that attorneys cannot be paid by the government unless they win. That is why these attorneys spend money on PPC ads and television ads; they must attract the cases that are most likely to win or they don’t get paid. An unscrupulous lawyer might want to do SSI cases like these in volume, hoping that 1 out of 100 cases wins, but for the most part, they won’t be able to focus on that winning case. They might actually lose some cases that can be won but didn’t come into the lawyer already a winner.
Some SEO firms likely work the same way, either (1) take the clients most likely to achieve rankings, or (2) take on volume (many clients) and hope that some of them will achieve rankings and pay the firm. But others (3) simply guarantee rankings and you can purchase their services on their sites without ever speaking with them. I’d be much more inclined to go with the first kind of firm who guarantees, than the second or third. But even more than that, I want to know about the strategy and process the firm goes through, and I want to know that they’re actually doing work to achieve rankings.
And most firms work in that way: they get paid for services rendered, not for results achieved, and that is why they don’t guarantee rankings. It’s not necessarily about the impossibility of guaranteeing rankings, it’s about using a different business model.
Search Engine Friendly Fallacy
In November, I posted on the blog at work about how sites are not naturally search engine friendly. And though I’ve likely said that something can be naturally search engine friendly, when I think through it, I just don’t think a site or a blog can be search engine friendly right out of the box. Aspects of the CMS or blog engine may aid the search engine friendliness, but there are still a dozen ways to write and post content and organize links in a way that negates what is “naturally” search engine friendly.
Jennifer Osborne, in her first of a five part series on how to sell a client on a blog strategy states, “In addition to it being an opportunity to talk to your client in a different tone than the rest of your site, it’s a very Search Engine friendly, Social Media friendly infrastructure.”
Blogs are not very search engine friendly by default. I suppose it is an accurate statement for a search marketer to say the infrastructures are, because they create and refine them so they are, but as a general statement to a client, it’s just plain wrong. WordPress, my blogging tool of choice is generally considered to be a search engine friendly infrastructure. But by default, it creates posts that look like this: ?p=123, instead of /keyword-rich-title/. I don’t recall exactly what it does with Titles and Meta Tags out of the box, but I know I don’t start a blog without first installing the All-in-One SEO Pack and the Dofollow plugins.
And does a blog have a social media friendly infrastructure? In my post on blog improvement tips, one of my priorities was to make sure there were buttons on this blog for submission of my posts to social media sites. These buttons aren’t there naturally. The option to comment is certainly social, and is turned on by default, but to truly make a blog social requires more than a comment form.
So if you’re a potential client to a marketing agency, or are thinking of building a blog on your own, blogs are not necessarily search engine friendly or social media friendly until they’re modified.
