Hi there,

We're a small search marketing company offering as part of our services PPC Account Management. At the present time we usually charge a setup fee and a monthly fixed price retainer for managing the account on our clients behalf. To me this is the most obvious charging methodology.

However the majority of agencies still seem to prefer charging on a commision basis with perhaps some bonus built in if they reach particular targets or campaign objectives.

I can see what benefit the agency has from charging this way i.e increased turnover etc. but i'm struggling to see what the benefit is to the client, if the more the agency spends the higher the commision they make. Surely this doesn't make financial sense in any respect.

I'd be interested to get some feedback from other agencies and end users on this.

Thanks in advance.

Andrew Alfrey
www.aspirica.com

Andrew -

We use a similar structure. The set up fee protects us from a client that wants to use us to set up the account, structure it, etc. and then walk away taking the know how with them. We waive this for a client that signs a longer term deal.

As far as percentage of media, we go with a fixed fee based on range of spend and campaign complexity. Each client is different. Some clients have relatively easy campaigns to manage, while others have many different updates to make outside of normal PPC management (i.e. product updates, availability, offers, pricing).

I have seen a lot of companies use percentage basis because they essentially outsource it, putting their mark up on top of the fees they pay to 3rd parties.

Stuart
www.stinsonpartners.com