Google Adwords campaign management, what is a reasonable price?

[websavvy]

Hi all,

I'm working in an SME and we outsource our Adwords campaign management to a digital marketing company. We would like to keep using a company rather than a single person to do this for us as we don't want to be left stranded if this person decides to switch careers or leave the country. Our problem at the moment is that we feel we're being overcharged at a fixed fee of €300 a month which is €3,600 a year. This isn't included in our Adwords budget for the year which is roughly €20,000. We have about 7 campaigns running with 220 keywords in total. We haven't set any definite goals for the results we want out of our advertising campaigns and maybe this is a mistake. Any advice would be appreciated. What we do know is that we're starting to slip behind our competitors in the digital marketplace and don't feel like we're getting value for money out of what we spend on our Adwords management. Does anyone else out there feel this fixed maintenance fee is an unreasonable figure or do you disagree?

 

[link8r]

In simplistic terms, any fee for something that isn't working = "mal-investment", i.e. if I paid €50 to the IEDR for a domain name but it didn't work, then I was down €50 and I didn't have a domain name. But in fairness, I don't know who your digital agency are or what criteria you've fed them. If the average bid rate has gone up for a keyword and you're on a fixed budget, then you would expect that the traffic you're getting per €1 will decrease.

Management fees tend to be a % or a minimum amount (as 10% of €1,500 = €150 for example). I've heard of everything between 10% and 16% in Ireland and the UK. It is usually a separate fee to your Google spend as Google don't really pay the Agency nor do they give % spend discounts, as is typical/common practise in traditional advertising.

At €20k p.a. spend, you could apply for a Google Account Manager but they will chop and change with varying frequency (at present, this is very high) and so will their individual capability. And their primary goal is to use the Google system from Google's perspective, relying heavily on visibility, brand awareness and opportunity as well as letting adwords make many of the decisions for you. This may or may not work for you particular business but its something I stay well clear of.

€300 per month doesn't sound excessive but then you have to ask, what are you buying? Are you buying a product or a service? The right answer, is probably that you are buying a service and that this is time linked (be it 5, 10 or 20 hours). If you haven't set any metrics, then how will the provider take direction?

Let's examine your points:

1. You're working in a small enterprise
2. You're AdWords budget is reasonably high for an SE
3. you have 7 campaigns and 220 keywords > this is a metric - so you're budgeting less than €10 per month per keyword - so the keywords probably are not showing every day, so why bother with so many ? (if there is a very low search volume, fair enough)
4. Yes, paying €300 a month would be a lot, lot less than hiring someone full time.
5. You have no set metrics

Questions you need to have with yourselves and your provider:

Are you selling online? Are you able to gauge how many leads, enquiries or actual sales you are getting? Can you gauge via AdWords (for example, the result of a signup, form or actual sale made)? Can you gauge manually by asking if people phone up?

What is the value per sale and what are you willing to spend in order to generate leads? What is the ratio of leads to sales?

What is your Click through rate?

What are the relevant Quality Scores for your keywords/phrases?

Are there critical keywords/phrases that you need to rank for? What is the Quality Score for these? Is it good (7-10/10) or bad (3-4/10)

Are you sure that these keywords generate enquiries?

 

[mneylon]

You need to sit down with the company you've hired and go through it all with them in detail.
I've no idea what they are (or aren't) doing for you, but maybe you should shop around and talk to others.
For what it's worth €300 / month isn't that much to pay *if* it's working. If it's not working, then obviously it's too much

 

[davidbrett]

Having goals for your campaign is crucial. Ideally you should have this identified before you talk to an Agency. I would agree that 10% -15% is about right as an agency fee. Google Adwords is very measurable so with clear goals in place it will become very clear whether you are getting value for money or not

 

[jmcclements]

I'm glad I don't have this problem. It's a minefield. I agree with most of the above.

Get at least 2 references before you go with anyone, and (I'm slightly biased here) - if they are an AdWords Certified Partner - you can be fairly sure that they are not out and out cowboys (though admittedly it doesn't mean they are out and out experts at the top of their game either).

10% seems to be a going rate for a lot of agencies, but if you are spending a lot of PPC money then I think that is a little bit high on an ongoing basis.