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Monthly retainer to ad spend ratio - is there a rule?

by DuvalStreetMedia
7 replies
Hey guys! I am new to this thread and the digital marketing world. I am getting ready to send out my first proposal and I was going to suggest a $2k monthly retainer with a minimum $2k ad spend. Is there a rule about ad spend to monthly retainer ratio? Should ad spend exceed the monthly retainer? I live in a vacation destination, so i am mainly targeting tourists while they are planning their vacations and while they are actually on our island. Thanks in advance guys!
#monthly #ratio #retainer #rule #spend
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  • Profile picture of the author Frank Donovan
    This is a little vague. Maybe you should expand on what your proposal is and who you'd be proposing it to.
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  • Profile picture of the author DABK
    I have recently been proposed something like that:
    They will make me a sales funnel with a one time fee of $395 and a monthly fee for ad management (creation, placement, tracking) of $195 (ad spent $220).
    These would have been facebook ads.


    Another one proposed no set up fee (no funnels, just sending people to my site), minimum $2k ad spend, 10% management fee (Google adwords).


    If my maximum cost to acquire a client is $500 and if I were to spend $2000, I'd want at least 5 sales. If I'm spending $4,000, I want 10. I do not care how you do it.


    If my client acquisition max is $140, for $4,000 I'd want at least 33, maybe 34 new clients. Again, I couldn't care less whether 3900 goes to you and only 100 is spent on ads or vice versa.


    I assume some people would care. But I can't imagine they'd be many. I mean, my goal, as a business owner, in buying advertising is to get clients. I judge my costs based on the total amount not on the ad spend by itself or your fee by itself.



    Originally Posted by DuvalStreetMedia View Post

    Hey guys! I am new to this thread and the digital marketing world. I am getting ready to send out my first proposal and I was going to suggest a $2k monthly retainer with a minimum $2k ad spend. Is there a rule about ad spend to monthly retainer ratio? Should ad spend exceed the monthly retainer? I live in a vacation destination, so i am mainly targeting tourists while they are planning their vacations and while they are actually on our island. Thanks in advance guys!
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  • Profile picture of the author DomMitton
    I listened to the podcast where guy charges $4k monthly retainer or 10% of total Ad spend budget (of course this is for clients that spend over $50,000).
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  • Profile picture of the author savidge4
    Originally Posted by DuvalStreetMedia View Post

    Hey guys! I am new to this thread and the digital marketing world. I am getting ready to send out my first proposal and I was going to suggest a $2k monthly retainer with a minimum $2k ad spend. Is there a rule about ad spend to monthly retainer ratio? Should ad spend exceed the monthly retainer? I live in a vacation destination, so i am mainly targeting tourists while they are planning their vacations and while they are actually on our island. Thanks in advance guys!
    Assuming a $2000 a month fee and $2000 a month ad spend, there needs to be some pretty hefty ROI going on. In general a "beginner" might get something like 10% of ad spend... and someone with a bit more experience might get 15%... a smart PPC Manager will opt for say $200 retainer and 15% of spend.

    The "Money" is ultimately in the CREATIVES. The Ads themselves... if you are proposing to create these as well, I would then follow a model that lays out a creative budget... a retainer budget ( for spitting out weekly reports etc ) and then a percentage of spend - this would be inline with how I bill for these services - with the exception I charge for % of performance over % of spend.. but this is probably not the best strategy for someone starting out.

    Hope that Helps!
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    • Profile picture of the author DuvalStreetMedia
      Thank you! My marketing is so unique (at least i feel that way) because i am dealing with 90% tourist based businesses. Simply advertising on facebook or google isnt enough, they need an entire strategy designed to bring tourists down there sales funnel one time, and then (usually) never see them again - or not until they return years later. Building a brand with a good social presence, stunning content, free content, reputation management and an email campaign will be taking around 20 hours of my time each month, at $100 thats $2000 - before any ad spend. I proposed the retainer only, no ad spend %. I hope i didnt come off greedy, thats not my intention, just trying to make sure im paid what I am worth. Thank you so much for your thoughtful reply!
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      • Profile picture of the author savidge4
        Originally Posted by DuvalStreetMedia View Post

        Thank you! My marketing is so unique (at least i feel that way) because i am dealing with 90% tourist based businesses. Simply advertising on facebook or google isnt enough, they need an entire strategy designed to bring tourists down there sales funnel one time, and then (usually) never see them again - or not until they return years later. Building a brand with a good social presence, stunning content, free content, reputation management and an email campaign will be taking around 20 hours of my time each month, at $100 thats $2000 - before any ad spend. I proposed the retainer only, no ad spend %. I hope i didnt come off greedy, thats not my intention, just trying to make sure im paid what I am worth. Thank you so much for your thoughtful reply!
        I would suggest then NOT calling it a retainer, I would call it a "Creatives Budget" with the added ad spend.

        I would suggest to make this "Sellable" you will want to be clear in what will be developed on a monthly basis... who will be responsible for things like photo and video ( at this point I am assuming you will be? ) The creation of the "Funnel" A/B testing for optimal performance etc etc etc

        I am reading what it is you are including... and I would suggest there is more than 20 hours there. probably closer to 40 would be my guess.

        In terms of getting paid "What you are worth" oh trust me I do NOT have an issue with that at all... YOU just have to set the tone for what is to be expected - looking at this from the clients perspective, $4000 spent needs to produce 12 to $20K on the up side to justify ROI - and keep in mind.. your client has expenses and time spent etc fulfilling what it is you will be selling.. so even something like 12K thru the funnel with the $4K spend may put them in a hole.

        If you are met with an amount of friction selling this ask to break down a product expense.. say a bus tour of the island or whatever it is, so you then have a better idea of what the expense of providing that to tourists is vs what you are charging to bring the business clients.

        Best of Luck!
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  • Profile picture of the author RedPoleMarketing
    It's standard to charge anywhere from 10%-20% of the ad-spend for your management fee. Also, you should have a threshold for minimum ad-spend. I would say anything lower than $1500 a month would not be worth doing.

    The minimum protects you from providing anything less than the desired results, and also allows you to look for clients who have the capacity to buy your services.
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