Adwords Management Fees – What is flat fee method and who does it suit?
05
April
2013

In Australia today, a variety of companies have sprung up to service the needs of businesses wanting to capitalise on the Online marketing channel.  Online marketing is a general term that comprises of many specialist components. 

We are specifically going to talk about Adwords management and the flat fee method of payment that some Adwords service providers use to bill clients.  This one of many methods that are available for clients when choosing an Adwords company.

 

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The information compiled below is based on 10 years experience managing Adwords accounts & over 4 years managing the Paid Search Division in Australia’s Largest Online Marketing Company.

 

Flat Monthly Adwords management fee:

 

This is the most common method used in the market.  Fees are fixed and will generally range between $100-$1000 per month.  Some companies do pay up to $10,000 per month in management fees of larger accounts.  With this type of method Adwords Agencies or service providers are not obligated to provide minimum number of hours service, rather you are paying for the end result.
If the agency does not provide the expertise or man hours to achieve optimised performance, the client will generally not stay as a client. In busy agencies, clients at the lower end of the monthly fee are the last accounts that get worked on.  These accounts are worked on by the least experienced account managers.  There are many occasions that accounts may not be touched for months at a time.  The agency will always protect the highest value clients with its best assets on highest allocation of time.

 

Talented Adwords Managers, can have an Adwords account running at optimal levels within a few days, whereas inexperienced Adwords managers may take weeks or months and never achieve the results required.  This is where both the agency and client can win and lose significantly.

 

What percentage is the management fee of the Adwords budget?

 

For example, if a client has a management fee of $500 per month with a spend of just $500 per month, the management fee as a percentage is 50% – which is really high.  With a $10,000 budget this percentage is only 5%.  This is a significant difference.

 

Any Adwords expert will find it difficult to improve account performance by double.  If your total spend was $1000 on Adwords and will be cut to $500 with $500 for management fee, this is probably not the right choice.  Unless you are in a lucrative industry where the market size is very limited and squeezing maximum market share is the key, this method would not likely suit your business.

 

What is the relative importance of Adwords success to your business?

 

If Adwords, is not critical to business success then opting for a flat fee with a modest budget might be a good choice.  This provides you with coverage, average performance achieves profitability, this might be what you need.  The stakes are not too high, so that if there is a bad month, the doors won’t shut.

That being said, unless the Adwords management is sharp, you may never know the full potential that is possible.  Regardless of whether you are starting or a seasoned Adwords user, talk with different providers to find out what results they have delivered.  Wherever possible, talk with the staff that will be doing the job, not the sales rep that will tell you whatever they can to get you to sign on the dotted line.

 

Key takeaways of flat fee Adwords management method:

 

  • Provides for certainty of cost – good for budgeting cashflow
  • You pay for what you get – is your Adwords manager a gun or a rookie
  • Understand where your business fits in with the Agencies pecking order of fees – who pays the most & who pays the least, this will give you some idea of how important you will be to their business
  • Budgets that are likely to increase achieve better ROI from fixed management fee

 

Find Your Ideal Customers is a start up Digital Marketing agency backed by Australia’s Leading Adwords Management Team.  With over 10 years experience, Jayson Rodda is truly an authority in the field of Adwords Management this field.  Please reach out to discuss your needs and find out if your business can benefit from Professional Adwords Management services.

 

Learn more about the Author: Jayson Rodda

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