PPC services are not cheap. But sometimes the choice is not about the price of the service. How to choose a good PPC partner who will ensure successful results? That’s the question.
Business owners may go through several PPC partners. They even hire a full-time PPC manager for a change. What’s the optimal option for PPC management? Here is the industry insider’s view.
After years of PPC campaign management for brands and companies in the US, UK and Canada, the same question would come to me every now and then. Which is better: to hire a PPC agency, a PPC consultant, or a full-time PPC manager?
Well, I’ve been in these three roles and can provide some insight about that. I hope this information can serve as a shortcut in decision making about hiring a PPC manager.
A new e-store needs sales. The first sales instill confidence and allow you to learn, enhance, build new features. To get the first sales is actually difficult when your site or brand does not have any reputation or authority built yet. Pay-per-click or PPC comes to help and brings relevant traffic and, hopefully, sales.
What is PPC?
PPC or pay-per-click includes all paid campaigns where a business pays per click. Google Ads or Bing Ads come to mind first, when one mentions PPC.
Usually, PPC includes paid search, shopping ads, remarketing, display campaigns. These days PPC may also mean placements on Facebook, Instagram, Amazon. Social advertising is not necessarily pay-per-click as the cost is still based on CPM = cost per mille impressions. But we are not going into the subtleties of the term PPC in this piece.
In a nutshell, PPC campaigns are a good way to bring relevant users to your e-store fast.
Why Use PPC?
Search engines like Google and Bing see millions of daily searches. These searches can turn into paying customers on your e-commerce site. It can happen when users see your site’s listing in the search results.
For example, we worked with a grocery site to optimize its visibility in organic searches for ethnic food in New York and Los Angeles. After the initial optimizations and ongoing efforts, it took the site 3 months to start showing up on the first page of Google’s search results for high volume searches.
Unlike SEO, a PPC campaign brought the same grocery site to the top of search results on Google on day one.
In a nutshell, PPC can help get a good level of visibility in search engines very fast. It will come at a cost, though. This cost is controllable and manageable. Now should you run PPC campaigns yourself or hire someone to do the job?
Why Pay for PPC?
Running PPC campaigns on your own is always an option. In my account histories I saw business owners setting up campaigns and running those on their own.
This is a good way to save on fees and be in full control. Is it a good approach, though? Short-term, this may seem as a good solution. But my personal experience tells a different story.
Business owners have a more important goal. They are there to grow the business. PPC management is not their first priority. What happens often is that they get disillusioned with bad results and they stop all paid advertising. And the bad results are guaranteed without a proper setup and ongoing campaign management. This bad experience builds a lot of stigma in their minds. Then it takes years for them to change their minds and return to PPC.
Working with a dedicated PPC manager is actually a good thing for a new or growing business. A successful PPC campaign can actually accelerate a business’ growth. The question is who can ensure this success?
PPC management can be done in various ways. You can hire a specialized agency. You can work with an independent PPC consultant, or you can bring PPC in-house.
All of these can be beneficial for your e-commerce business. There might be certain caveats that you need to consider by working with any of the three PPC campaign managers.
By agency I mean any digital marketing agency of 2 people and more who offers PPC services.
Agencies work with lots of clients. Plus, their sales team is constantly out there searching for more clients. You will probably be talking to a sales or business development person who will be doing some over-promising to get you onboard.
What should you know? Here are some insider tips.
Your PPC manager will be working with multiple clients. The PPC manager will probably work with 10-15 active clients each month. This includes the setup of new campaigns, routine changes in the accounts, calls with customers.
Some agencies decentralize the work. One individual does the PPC campaign setup, the other does daily optimizations, their manager goes to client calls to report on the results.
Also, PPC management is in high demand. Turnover at digital agencies is high. A PPC manager may switch jobs every 12-18 months.
These above don’t create that connection to your PPC account needed to produce exceptional results.
Also, agencies tend to have pricing tiers. The lower the tier, the less you get. Let me give an example.
One of my clients was enrolled in the lowest price tier (with $20-25K ad spend per month) with a PPC agency from Atlanta, Georgia. The $2K management fee entitled my client to have several hours of active campaign management per month, a monthly call and an automated quarterly report. The results were so-so. The client was just breaking even: $25K spent – $26-27K made. The client was kind of happy, as they did not know any other alternative.
After a cleanup, which involved a setup with a new campaign structure, new ad copy, new landing pages, ROAS (return on ad spend) went to 2x, then 3x, then 5x. The client started spending more and we continued getting more sales. It took us several weeks and the client hired me as an in-house PPC manager. Good times!
In-house PPC management makes sense when your brand has tens of product lines or brands. In-house PPC also makes sense when you are a major global e-commerce business, active in different countries.
Million-dollar ad spends on PPC cannot be given to agencies. There is a lot at stake. Public companies or startups in the exit or growth stage prefer to bring PPC in-house.
Having in-house PPC managers means that you have full-time employees. This comes with all perks, benefits, sick days, vacation time to give. It also comes with the employees’ career growth ambitions. For them to perform, they need both career growth and financial motivation.
In-house PPC means all the needed time will be given to the campaign management. It may also mean your PPC managers may get bored after everything is set up and it’s all running well. Even big budget campaigns may not always need 8 hours of optimizations each day.
Sometimes, too much time in the PPC campaigns may bring about over-optimizations. The in-house PPC manager wants to show more effort and starts optimizing what’s already working well.
The only way to avoid over-optimization is to task the in-house PPC team with more projects, like developing and building new landing pages. Another area to use in-house PPC managers to their full potential is to give them freedom to experiment with new paid ad platforms and placements, or try new acquisition methods like influencer or blogger-vlogger outreach.
With budgets that are small and that don’t increase, an in-house PPC manager will find it un-motivating and boring.
PPC consultants like myself work only with a select roster of customers. The rationale is simple – there is only that many hours a day. Plus, there is no room for bad quality as sloppy and botched projects tend to tarnish a consultant’s reputation. So quality work requires focus and time.
PPC consultants have different faces too. Some consultants are all about business development. In the end such consultants are about low-maintenance clients paying monthly retainers without asking too many questions.
Other consultants focus on retention which is achieved through good results. I tend to keep customers for over 2 years. The reason for the end of our relationship is rarely the quality of the work. It’s more about the business being sold, or the contact person moving on to other opportunities, or the business stopping all activity in the region I cover.
Retention is a good indicator about the ethics and types of clients your future PPC consultant has.
How Much to Pay a PPC Manager?
Managing PPC campaigns is a skill like any other skills. With experience you get better. This skill also involves constant knowledge updating about advertising platforms. Google, for instance, adds new features and makes changes to Google Ads every 6-9 months. PPC managers need to be aware about the changes and make respective changes to the campaigns fast.
Like paying a plumber or a car mechanic, PPC management is a paid service. The pricing model may different from country to country. But it also differs from agency to agency, or from consultant to consultant.
Here I am going to give a couple of standard pricing models that agencies and consultants use in the US and Canada.
Agencies and consultants tend to charge a fixed monthly retainer for small budgets (under $10K/month). The retainer may be between $500-$2,000 depending on the promised involvement. Independent consultants may charge less.
Retainer + Percentage of Ad Spend
The most popular pricing model for the PPC service includes a monthly retainer and a percentage of the PPC spend.
This pricing model is convenient for brands and sites that want to be able to scale up and down the PPC spend. The PPC provider charges the guaranteed retainer for the work and a percentage (between 10%-20% of the ad spend).
Percentage of Ad Spend
With high PPC spends, over $20K/month, some agencies charge only the percentage of the spend. This is a convenient solution for spends between $20-30K/month.
If the spend goes up to say over $100K/month, the fee will be a heavy $10K/month. If the results are so good, it’s probably justifiable.
Several years ago an agency outsourced PPC management of a fast-growing Canadian brand to me. My service fee was a small retainer and a higher hourly rate for overages. The agency was charging the client 12% of the ad spend. The client went on a spending spree after an acquisition by a larger brand. I was working day and night to get the best results. It was an interesting 12-month experience for me, and it was the best year in terms of revenue for the agency that gave me this business. Smart them!
Hourly rate may be applied to small tasks like PPC campaign audit or setup. Usually, PPC managers don’t work on hourly rates to do ongoing campaign management. If you deal with an agency or consultant that gives you quotes with hourly rates, check the other numbers, too.
I’ve been getting price quotes from a bunch of overseas agencies for some web development and SEO work. Their attractive hourly rates of $30-40/hour became unrealistic when I looked deeper in the quote. One quote promised to have a dedicated manager who’d be giving 60-70 hours a week to my case. Well, you cannot have one person from an agency with tons of clients working for you over 40 hours a week.
If you hire someone to do PPC in-house, the salary will depend on your state or province (US/Canada). Junior PPC managers with 1-2 years of experience expect to start at $40-45K/year. More senior specialists with 3+ years of experience will want $55-60K/year and above.
What’s the short answer to the question: PPC agency, PPC consultant, or in-house PPC for an e-commerce site?
- In-house PPC managers top our ranking. You get focus, control, results. But you pay more in perks, benefits, office space, office politics.
- PPC consultants come next. They are motivated to give high quality work as their reputation is at stake. They are also driven by retention.
- PPC agencies can offer a variety of skills and are expandable if needed. They may not always reveal how they operate. Your campaigns may end up outsourced to a consultant or a freelancer.