How do PPC agencies price their work?

One of the most common questions we get at Credo about PPC firms is how they price their work.

Over the years I’ve published some musings (and a response) about PPC pricing. While I have my own thoughts about pricing (and those have changed over the years), I thought it would be helpful to know how PPC firms price their work.

To do this, in our recent digital marketing pricing survey I asked all respondents how they price their PPC work. We had 271 respondents in total and 146 who do PPC, which means that this is a cross section of the digital marketing world from which we can glean some valuable insights.

Insights

As you will see below, it is most common for the PPC firms from our dataset to bill for their PPC work on a flat fee basis. 82.68% of firms report as billing this way.

It is much less common for a firm to bill based on a percentage of your monthly spend. However, we do see this (anecdotally) more often with higher budgets as these budgets require a lot more time, effort, and upkeep to continue growing and even accelerating your business’s growth.

Breakdown of sizes of firms doing PPC

First let’s look at the breakdown of sizes of firms doing PPC, from our survey results.

Here’s the raw numbers breakdown:

Here is how PPC firm sizes compare as a percentage when put against firm sizes as a whole across our dataset:

A few interesting callouts:

• 51% of respondent firms who do PPC have 5 or fewer employees;
• Almost 32% of PPC firms in our dataset have more than 20 employees;
• PPC firms have a higher representation as a percentage of the whole than large firms across our dataset. Put simply, PPC firms tend to be larger than the average firm in our dataset.

Now that we’ve established what a PPC firm within our dataset looks like, let’s break down how they bill.

How PPC firms bill for their work

Here is the breakdown of how PPC firms within our dataset charge for their work:

As you can see above, a full 82.68% of firms will work on a flat fee (retainer) basis. Only 17.32% do not!

Once we move to the other models, the percentages flip:

• Only 12.85% bill as a percentage of spend;
• 21.23% work on a model that varies based on spend (flat fee or percentage of spend);
• 21.79% work with a flat fee retainer plus a percentage of spend.

From our data, it is most common that a PPC firm will charge a flat fee for their services.

Here’s the raw data if you are interested:

Hopefully this data is helpful to you as you look to work with, or continue working with, a PPC firm.

If you’re  looking to hire a PPC firm to help you manage your spend and scale your business, we can help.