What determines ecommerce PPC costs?
A few factors influence what you will pay for ecommerce PPC management services, including:
Your ad spend is a critical pricing factor because many agencies use a percentage of ad spend pricing model. This pricing model bases the agency’s management rate on your ad spend. Depending on the agency, they may use this pricing model across plans or only for specific ad spends.
For perspective on this pricing model, check out the following example:
Your company sets a $5000 monthly ad spend, and your agency charges 10% of your monthly ad spend. You then pay your agency $500 per month to manage your campaigns, in addition to spending $5000 across ad networks like Google Ads or Microsoft Advertising.
In some cases, agencies will charge either a flat-rate fee or a percentage of ad spend. For instance, an ecommerce PPC company may charge $500 per month or 10% of your monthly ad spend, whichever is higher.
That means if your company started spending $5500 each month instead of $5000 on ad networks, your agency would require 10% of your ad spend. You’d pay them $550 versus the flat-rate of $500 because it’s the higher amount.
This pricing model helps your agency cover its operating costs and provide you with the best service.
Understanding these different pricing models, however, can help your company understand an agency’s ecommerce PPC prices. That way, when you contact an agency, you know how much their services will cost.
PPC pricing model
Agencies use a range of pricing models when it comes to PPC, including:
- Flat-rate: You pay a recurring and consistent monthly management fee.
- Percentage of ad spend: You pay a monthly management fee based on your ad spend.
- Performance-based: You pay a monthly management fee based on agency results.
Your agency’s pricing model will influence your ecommerce PPC costs.
For example, if your agency follows a performance-based pricing model, you will likely pay varying amounts each month. If they use a flat-rate pricing model, however, your company will always pay the same amount each month.
Before you sign with an agency, research each pricing model.
Your research can help you determine which pricing model works best for your business. For instance, while the performance-based model may seem cost-effective, it could lead to high (and unexpected) costs if your agency’s performance exceeds original estimates.
Generally, you’ll want to choose a pricing model that provides a predictable monthly cost.
When it comes to ecommerce PPC pricing, agencies carry the most influence. They decide what they will charge for their services, and several factors influence what they charge. Recognizing these items can help your business understand an agency’s pricing.
A few examples of some agency-specific features that influence ecommerce PPC prices include:
- Agency size
While many of these factors increase an agency’s rates, they’re often positive indicators of service quality. Better service quality not only translates to a better experience for your team but also better results for your ecommerce store.
Even if your business can’t afford the most prestigious PPC agency, that doesn’t mean you should ignore these pricing factors. Look at an agency’s history, talent, and background to see if they have a competitive edge that can help your business.
Your service deliverables (or what comes with your ecommerce PPC services) can also impact your ecommerce pay-per-click costs. For example, one agency may offer fraudulent click monitoring while another doesn’t, which results in a cost difference.
A few examples of some service deliverables not always included in PPC plans include:
- Call tracking
- Lead tracking
- Fraudulent click monitoring
- Landing page design
- Landing page testing
- Shopping cart abandonment emails
Depending on what these deliverables require, you may see minor or major changes in ecommerce PPC prices. A custom landing page design, for example, will often result in higher costs than fraudulent click monitoring.
Researching these deliverables before contacting an agency can help your business decide which ones you want and which ones you need. Once you decide, you can compare agency deliverables and prices with a clear understanding of what you will pay more for to access.