How Do I Charge a Client for Google Ads?
Much like everything else in the world, not every agency out there charges their clients in the same way. In fact, there are multiple Google Ads agency pricing models that exist, which you should be aware of before even considering setting any PPC fees and charges for your services.
In other words, before you could even think about what Google Ads management price you should set for your services, you should understand what models agencies use to charge their clients and the pros and cons of each one of these models. That way, you can decide which one is best for you.
This is an important step as choosing one pricing model over another can make all the difference when trying to find clients for Google Ads services. Therefore, make sure to read our article thoroughly so that you can understand which pricing model works best for you and your typical client.
Before moving on, it’s good to note that what we’re about to say here doesn’t apply to all forms of Google Ads jobs. In fact, if you’re working for an employer, you don’t even have to bother coming up with any AdWords management fees as you’ll be earning your money through a Google Ads specialist salary and not from fees.
Our guide here is more applicable to other forms of making money as a Google Ads specialist, in particular, to anyone who’s learning how to start a Google Ads agency.
However, this also applies to anyone who’s learning how to be a Google Ads freelancer, whether that’s to be their full-time occupation, or simply as a Google Ads side hustle.
Flat Fees
The first form of pricing model that we’ll be looking at is the flat fee, which is a fixed Google Ads management fee that you’ll charge your clients every month. Of course, this also includes a Google Ads setup fee that you’ll charge at the beginning of your engagement.
Sometimes, certain agencies will charge tiered fees, or fees depending on the client’s ad budget. For instance, if a client can only afford an ad budget of $1000/month, then the flat fee can be something like $150 or $200. However, with an ad budget of $10,000, you can ask for a fee of $1500/month.
The good thing about this pricing model is that clients have an idea of what they need to pay every month, which makes it an attractive model for clients. However, being stuck with the same fee for the rest of your contract might disincentivize you in the long run as you might not feel “rewarded” for your efforts.
At the same time, the flat fee doesn’t account for the amount of work that’s needed to be done for each client. Some clients’ paid ads require more work even if they have the same budget as others.
Percentage of Ad Spend
This next form of Google PPC pricing is actually one of the most popular and with good reason, as we’ll see quite soon. Essentially, you’ll be charging a percentage of the ad spend that your client assigns every month; or, to put it another way, you’ll be charging a commission for every acquired lead during your management.
The typical range of percentages in this pricing model is between 10–20%, but percentages as high as 30% aren’t unheard of, especially if the agency or expert is one of the best in the business. That said, this pricing model is a little more flexible than the flat fee, as you could negotiate different percentages depending on the ad budget.
For instance, you could charge higher percentages with lower ad budgets, but lower percentages with higher ad budgets. In a sense, this almost incentivizes the client to aim for higher ad budgets as you’ll be taking a lower percentage of commission; at the same time, however, you’ll still be making more money that way.
By way of example, let’s say that you have a client who assigns you with $1,500 as a monthly ad budget, and you charge a 20% commission. That’s $300 a month. However, if the same client decides to increase their ad spend to $5,000, for example, then you could charge 12%, which effectively doubles your commission to $600.
The problem with this pricing model is that it doesn’t always scale predictably, and sometimes clients will have variable budgets, depending on seasonality, for instance. At the same time, there’s the temptation to convince a client to increase their ad spend in order to boost your revenue, which isn’t always in the client’s best interests.
Performance-Based Pricing
This is a rather rare form of pricing model, which we’ll soon be seeing why. Essentially, your Google Ads management cost is directly linked to the performance of a client’s ad campaigns. The benefits of this is that the harder you work on a client’s campaigns, the more rewards both you and your client will enjoy, which makes you more motivated as a result.
The theory behind this form of Google AdWords management pricing is actually quite sound, and many clients would prefer this model because it’s tied directly to the results an agency yields. However, in practice, this pricing model falls apart for a handful of reasons.
Firstly, the model itself works a little vaguely. You’ll need to identify which metrics or milestones to put a price on with your client, and then again, how exactly do you calculate the price for each lead or conversion generated, for example? It ends up becoming rather complex just to calculate how much commission to charge for the revenue generated for a client per month.
Moreover, this model is a little unrealistic because there are so many things that are tied to the performance of paid ads, and not all of them within an agency’s control, that you might end up falling short of your targets, and not getting paid as much as you truly deserve.
Hourly Rate
This is another form of pricing model that isn’t exactly popular with agencies, and we’ll see why. As the name implies, this is a Google pay per click pricing model that charges clients depending on the number of hours spent on their project. Clients like this model as there’s an easy correlation between the amount of work done and the fees charged.
However, for an agency, this pricing model isn’t ideal for your bottom line. While it’s good to know that you’ll be compensated for whatever work you do on a client’s campaigns, no matter how trivial or menial, there’s a tendency that over time, you’ll be getting less money for managing the same client’s campaigns.
Remember that the ultimate goal for any agency or specialist is to optimize their workflow so that they can do more work for far less effort. And in PPC, working efficiently also means that you spend less time for each campaign. In reality, this ends up penalizing simply for doing a job well done.
Sure, you can charge a client for writing up reports and other more administrative tasks, but you won’t be getting paid for doing PPC that way. Finally, there’s also the matter of having to constantly write down the number of hours you worked, which ends up being another nightmare of a task as you can often lose track if you’re focusing hard.
Mixed Models
Finally, certain agencies will use what are known as “hybrid models” of pricing for their Google Ad management services. The most common mixed model that you’ll find is a combination of the flat fee and percentage of ad spend, as it covers both of the advantages of those pricing models.
For example, you could charge flat fees for the more repetitive and administrative tasks, like compiling performance reports, account setups, etc., and then charge a percentage of ad spend as Google PPC charges, so to speak. It ends up being ideal for getting paid for the variety of tasks that you’re expected to undertake.
The drawback of this Google Ads agency price scheme is that there’s a lot of necessary guesstimation involved in the process. For instance, how well can you judge how much to charge as a flat fee for setting up a Google Ads account, for instance? Or for other repetitive tasks, like drawing up reports?
Finally, it’s not always easy to predict how much revenue you could receive, since clients won’t necessarily spend the same amount every month, which makes assessing future costs and tool purchases a little difficult.
How Much Should I Charge for Google Ads?
You might be able to appreciate that answering this question isn’t exactly easy: after all, if you’re going for the percentage of ad spend model, for example, you need to charge depending on how much money the client affords. Moreover, when it comes to flat fees, you also need to account for your business size, expenses, etc.
That said, you would usually find that the range of charges for Google Ads management ranges from something ridiculously low like $250/month, up to significant fees of $1,500/month and beyond. There are many factors to consider when deciding on pricing, which we’ll be looking at here.
Assess Your Competition
Firstly, you need to check who you’re up against when offering PPC services. This will necessitate a lot of introspection as you need to look at your company and understand the kinds and quality of services that you provide. What do you provide that your competition doesn’t?
Moreover, what is the list of services that you can provide clients? Do you provide other marketing management services rather than only PPC? Do you also offer copywriting, video production, graphic design, landing page design, and other services? And how comprehensive are your services?
You should also consider the worth of your business: did you receive any accreditations (like getting Google Ads certified) or receive any awards for your services? After all, if you’ve made a name for yourself, you should also consider that when calculating your rates.
Finally, you also need to take into account the kinds of prices being charged by your competitors. If you’re too expensive, there’s no chance you’ll ever be contracted. In reality, the most important thing that you need to do is provide value for money.
Once you’ve looked deep within yourself and at your surroundings, so to speak, then you can consider what kind of pricing model and rate you can charge your clients.
Factor In All of Your Costs
Not only do you need to consider what services and value you provide your clients, you also need to check what kind of costs you’re incurring when you’re providing your services. Much like any other business, you need to calculate how much it costs you to take care of clients’ paid ads.
Therefore, you need to account for the costs of tool subscriptions (whether that’s tools like Semrush, Optmyzer, WordStream, HubSpot, etc.), employee salaries, internet connection, office rents, purchasing equipment, personal expenses, etc. Make sure that whatever rates you’re charging covers all of these expenses—and lands you a profit.
Charge Fees for Smaller Tasks
When opting for the percentage of ad spend pricing model, you should also consider charging flat fees for the more mundane aspects of your services. These would include things like campaign setups or strategy consultations. This is because there’s often more work in the beginning stages of a client’s ad campaign.
In this, there’s a delicate balance of what kind of fees to charge: do you charge a high fee to make up for the large amount of work required at the start of a campaign? Or do you charge a lowish fee in order to attempt to secure that client in the long term? It’s tough but ultimately it’s a decision you have to take.
Be as Transparent as Possible
A very important point that we need to bring up is transparency. This doesn’t really factor in your pricing schemes, but it’s for securing long-term clients. Firstly, you have to make sure that you’re explaining every aspect of your services: what exactly your services consist of and what they can do to help them achieve their goals.
At the same time, you should also continuously keep your client updated on the state of their paid ads by providing regular performance reports as well as allow them to view what you’re doing by giving them access to the account. By working from the client account, you client will trust you more because they can see you’re not making up the data you present them with.
Clearly Categorize Your Fees
Finally, you should differentiate between each one of your fees, especially when you consider our previous point about transparency. Since your clients are actual people with actual concerns, you need to set their minds at ease and assuage their doubts by showing them what your fees are for.
This is especially true if you offer more services than simply Google Ads management. For instance, if for a client you’re providing CRO (conversion-rate optimization), SEO (search engine optimization), and landing page optimization on top of managing their Google Ads, you need to show them what you’re charging them for.
This is also important if you’re only providing Google Ads management to a client. Make sure to show them which of the fees are for, say, setting up their campaign, and which are the fees for optimizing and managing their ads. That way, the client has much more reason to trust you and they’ll keep you as their agency of choice.
Should I Pay Someone to Do My Google Ads?
This is one of the burning questions that many business owners and entrepreneurs seem to have. And, let’s be honest, it’s easy to understand why. If you’re a business owner, adding another cost to your list of expenses is going to make the road to profitability seem even more daunting than ever.
However, the thing is that Google Ads shouldn’t be considered an expense but rather an investment. With the power of Google Ads, you can get closer to your marketing goals thanks to the increased brand awareness as well as the massive potential for new leads and conversions.
Paying someone to manage your Google Ads should be a must if you lack both the time and expertise to set up, manage, and optimize your own ads. In our opinion, not having the necessary experience to manage your own Google Ads leads to more harm than good because you’ll end up wasting a lot of ad budget just to gain experience.
Moreover, managing and optimizing paid ad campaigns can be rather time-consuming, which takes away from time that you could use for other aspects of your business. Therefore, we think that paying someone to manage your Google Ads is a great idea if you don’t have the experience, time, or even the money to set up an in-house marketing team.
Other Articles to Explore:
- Wondering if being a Google Ads specialist is legit? We can tell you that yes, it is. But our blog post on the subject will explain it in further detail.
- Maybe you already know that being a Google Ads specialist is a genuine job, but you’re not sure if it’s worth doing… if you’re wondering if becoming a Google Ads specialist is worth it, then you can find out in our article on the subject.
- One of the accreditations you can receive in pay-per-click marketing is the Google Ads certification. But is the Google Ads certification worth it? Our article explores the topic in greater depth.
- If you decide on becoming a Google Ads specialist, then one of the best ways of gaining experience is through being employed full-time; for that, you’re going to need an excellent Google Ads specialist resume. We’ll take you through the steps of building one in our dedicated blog post.
FAQs
How are people charged for Google Ads?
There is a number of methods that agencies use in order to bill their clients, each with their pros and cons. These are: flat fees, percentage of ad spend, billable hours, performance- or milestone-based pricing, and mixed models. None of these are perfect, so it’s best to weigh up the pros and cons and choose which one is best for you.
How much should I pay someone to manage my Google Ads?
Different agencies or specialists will have their own rates as well as pricing schemes, depending on their own business model and requirements. Meeting these fees and rates will depend on your business needs and budgetary constraints, so it’s up to you to decide whether you can afford them.
How much do freelancers charge for Google Ads?
While not all freelancers will ask for the same rates, as it depends on their level of experience and other factors like their geographical location, you will find that freelancers are charging anywhere from $30–$200 per hour. Naturally, the higher their rate, the better they should be at improving your ROI and getting you that much closer to your marketing goals.
How much does Google Ads cost for a small business?
The cost of using Google Ads as a small business differs depending on whether you’ll be doing your Google Ads marketing yourself or whether you’ll be hiring someone to do it for you. If you’re doing your own marketing, you could be looking at anywhere from $1500–7500 in terms of monthly ad budget. If you’re hiring someone then these same costs will need to increase to factor in the agency’s or specialist’s fee.
How do you charge clients for ad spend?
Charging clients for ad spend typically works similar to a commission: you calculate a percentage of their monthly ad budget and add that to your invoice of Google Ads fees. Calculating the percentage will depend on your business requirements and how much you need to make in order to not only break even but even walk away with a bit of profit.
