For those of you who manage Adwords for a percentage of the ad spend

by AmyKay
11 replies
I have some questions for some of you kind people who manage Adwords for their clients.

I proposed to a construction company that I get him leads using adwords for 20% of the ad spend. He's very interested, so we have a meeting next week! Could be a lot of money!

I know Adwords, but this service model is new to me. (For me, this is a better/safer model than charging per lead.)

Some things I'll include in the contract:
Pay me monthly
I'll create a website just for the clicks to go to. If he fires me, he loses that website.
I'll get a virtual phone number with tracking, forwarding, etc. If he fires me, he loses the number.
Charge 20% of total ad spend.
The Google charges will be billed to his credit card, of course.

Will start with just targeting windows leads. Then add roofing, siding, etc.

So, is this how you guys do this? Any recommendations for me? How much do you charge?

Thanks SO much!,
Amy Kay
#adwords #generation #lead #manage #percentage #spend
  • Originally Posted by AmyKay View Post

    I have some questions for some of you kind people who manage Adwords for their clients.

    I proposed to a construction company that I get him leads using adwords for 20% of the ad spend. He's very interested, so we have a meeting next week! Could be a lot of money!

    I know Adwords, but this service model is new to me. (For me, this is a better/safer model than charging per lead.)

    Some things I'll include in the contract:
    Pay me monthly
    I'll create a website just for the clicks to go to. If he fires me, he loses that website.
    I'll get a virtual phone number with tracking, forwarding, etc. If he fires me, he loses the number.
    Charge 20% of total ad spend.
    The Google charges will be billed to his credit card, of course.

    Will start with just targeting windows leads. Then add roofing, siding, etc.

    So, is this how you guys do this? Any recommendations for me? How much do you charge?

    Thanks SO much!,
    Amy Kay
    10-15% ad spend on traditional advertising (radio,print,etc-offer discounts- contact media outlets, regional&national)

    5-10% online ad spend.... Depending on volume, and amount based on the total value of the client (upselling other services, website, multimedia design, etc) *in the future it would be advantageous to offer %pts in negotiation to get higher volume contracts)
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  • Profile picture of the author Aaron Doud
    While he may agree to all that here is what I would think if you presented that to me.

    1. Website for tracking is nice I guess but why not just send them to my website? I mean I am the one paying. And if I do decide to follow your advice on the pass through website I sure as hell will own it not you.

    2. Tracking number is good. I kinda see where I might need a separate site now for tracking. But that number like the website are mine.

    3. 20% seems fair if you know your stuff at least if I keep the ad spend small. What about when this works and we decide to put more money in adwords?

    4. Of course I will be billed. The adwords account will be mine. I will be paying you to manage it.

    Ok now back to reality. Why do so many people on this site act like the clients are their enemy? "I have to own the site in case he fires me." How about you treat these business owners with respect, charge fair prices, and get results. You do that and he won't be going anywhere.

    Stop making clients jump through hoops to work with you.
    Stop treating your clients like they are untrustworthy.

    Real companies do not do this. They have contracts that protect themselves. Maybe with an adwords account their is a minimum number of months and/or a set up fee in the beginning to cover your work. That is fine. But the rest needs to go.
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    • Profile picture of the author bluecoyotemedia
      Originally Posted by Aaron Doud View Post

      While he may agree to all that here is what I would think if you presented that to me.

      1. Website for tracking is nice I guess but why not just send them to my website? I mean I am the one paying. And if I do decide to follow your advice on the pass through website I sure as hell will own it not you.

      2. Tracking number is good. I kinda see where I might need a separate site now for tracking. But that number like the website are mine.

      3. 20% seems fair if you know your stuff at least if I keep the ad spend small. What about when this works and we decide to put more money in adwords?

      4. Of course I will be billed. The adwords account will be mine. I will be paying you to manage it.

      Ok now back to reality. Why do so many people on this site act like the clients are their enemy? "I have to own the site in case he fires me." How about you treat these business owners with respect, charge fair prices, and get results. You do that and he won't be going anywhere.

      Stop making clients jump through hoops to work with you.
      Stop treating your clients like they are untrustworthy.

      Real companies do not do this. They have contracts that protect themselves. Maybe with an adwords account their is a minimum number of months and/or a set up fee in the beginning to cover your work. That is fine. But the rest needs to go.
      Aaron

      some great points which got me to think.. I believe in structuring each deal in a way that will protect me and streamline billings

      then I will do my best to provide value. but sometimes business owners renege on deals or they disorganized or they flat outr want to just exploit.. etc etc

      this happens all the time. not all but enough to cause some damage.
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  • Profile picture of the author AmyKay
    Oh, wow. I must have come across all wrong! I'm so sorry.

    I do treat my clients with respect, and will do all I can to keep his spend costs down.

    The trouble with making him a separate site for tracking is that then there is a website fee with that. I figured I would take that on myself, but as a condition of my services.

    I actually prefer to not tie the owner into a minimum number of months or a long term contract. If he's not happy with me, he shouldn't have to keep paying me, right? THAT would be wrong.

    Hmmmmm, I'll think about the phone number and website ownership. I will pay hosting and the virtual number fee, so it seems they would be mine. I guess, he could pay for it, and truly own it, but then again, I'm looking at a set up fee. I would rather not charge a set up fee if I can help it.

    Again, I really think I can across wrong to you, Aaron. I was trying to brief and concise in my post, not as though I am harsh to my clients. I'm far from that.
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  • Profile picture of the author AmyKay
    While we're on the topic of inegrity, here's a major flaw I see with this model:

    My pay depends on his ad spend. But I am basically in charge of how much he spends, to a degree. Meaning, I can convince him to bid high for the top spot, and to some degree, I can control his quality score. Seems like a conflict of interest, for lack of a better phrase to describe it.

    Personally, I'm motivated to keep his costs down so that he's happy with my service, cost, and will have a great ROI which will motivate him to spend more, and want that top spot, etc. Of course, as he spends more, I'll reduce my percentage fees.

    Then there's the other model, where he pays me per lead, and I pay my own lead gen costs. So I will pay Google, basically. Ultimately, I didn't do well with this the last time I tried, and lost some money. Maybe I should look at it again, though. I've seen others on this forum charging competitive prices per lead, telling the client they are adwords costs, basically, but then also using other sources for generating the calls like newspaper ads, etc. Then they show proof of the calls and charge the client per lead. I'm not sure that's honest, either.

    Would like for others to chime in!
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    • Profile picture of the author tryinhere
      Originally Posted by AmyKay View Post

      Then there's the other model, where he pays me per lead, !
      ? option 3 charging for account size and work to be done, more like an hourly rate * work needed and you charge in advance.

      Mostly working with roofing, / trades as you suggest, yes build your own sites per se as many trade sites are crap and not set up correctly to capture leads ( some are ).

      As for working these people you will find many want to spend peanuts and make millions and wonder why their 1980's site does not convert at 50% or better.

      Best of luck with it all.

      something I prepared earlier that may help

      lead gen calc - http://www.warriorforum.com/warrior-...HoxbriHkz3m0EU
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  • I like the idea of building a separate site because often times it's hard to get approval for changes on a clients site. It's their baby and they tend to take a lot precautionary steps to make sure you don't mess it up. I think the tracking number is good idea. I'd only recommend adding a tracking number if you build them a website. Most won't like having a different number on their site because they have a different number on their business cards, their building, signage etc. It's a branding thing and they won't let it go sometimes.

    As for pricing yeah 10-15% is pretty common. However I've been trying something new and that is using a sliding scale charging clients who aren't spending a lot of money more and ultimately bringing down the rate the more you spend. You can see an example of this here: Pinnacle Positions Pricing, PPC Management Price | Pinnacle Positions
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  • Profile picture of the author PanteraIM
    Hi, Amy.

    You have raised some excellent questions in this thread.

    I run my Adwords agency charging a 30% management fee per month with a $799 start up cost.

    The point of this pricing is because:

    I'm in business to make money, and lots of it

    The more optimized and converting the traffic I get to the customer the more he's inclined to set up different campaigns, adgroups, which lead to more work and ultimately more revenue for his business

    The amount of work required to constantly split test and optimize the campaign and the landing page can be enormous if it is a large account. For two of my largest campaigns that spend over $30,000 per month I had a dedicated support specialist to work on these two accounts almost exclusively. Do not underestimate the value of your time and the amount of work that gets put into running a profitable campaign for your customer.

    It's absolutely critical for the success of the campaign and your business and reputation to set up a separate landing page for the traffic to be funnelled into.

    Business owners get upset when their well-optimized campaigns don't convert because they point the paid traffic towards a homepage littered with navigation and other irrelevant content to the ad group.

    I can personally recommend Ubounce for landing pages that can be hosted on a subdomain of the root host.

    Customers should be given the expectation that it should take at least three months for the campaign to fully realise its potential in both the ROI and ROAS metrics.

    To begin with as a negotiation tool you can offer the $100 vouchers as a 'personal down payment', or guaruntee for the customer that this idea will make them more money, especially for those who are new to online marketing.
    Once they are impressed they will not be concerned with signing up to 3, 6 or 12 month contracts with the appropriate clauses to protect you and ensure your customer gets what he wants.


    Hope this helps.
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  • Profile picture of the author Aaron Doud
    Amy,

    I understand at times we all says things and they come off in ways we don't mean.

    To follow up on some of what you said....

    1. I really believe if you are setting up an adwords campaign and setting up a website you need a set up fee that covers that.

    2. Why not change a flat maintence fee for adwords based on the work you will do? Say $200 a month. He will pay for adwords directly and you will move his ad spend budget up and down based on what he wants but the fee you get doesn't vary as long as the work load remains relatively the same month to month.


    bluecoyotemedia,

    I think contracts and up front setup fees help protect consultants from businesses that will back out of or in some other way mess up a deal.

    I've never had a problem paying setup fees. Most businesses are used to this. Of course setting something up costs more than just a monthly fee. They expect that.

    Of course for those who don't like it you can roll setup into the monthly fee but then you need a contract that locks them into so many months. Not personally a fan of this because you still have to sue them if they break the contract.

    I'm a big believer in getting paid first. And I myself like companies that do that. Sure some of the companies I work with just bill us. We have a relationship where they will do work before getting paid because they know we will pay them. But they still have setup fees for new services and we gladly pay them. The value they provide to us more than covers the costs.

    Personally when starting out a relationship with another business I think it says a lot about the business if they can pay up front. It shows they have proper cash flow and it shows they believe in the value you will provide them. Those who freak out over paying setup fees or paying 2 or 3 months in advance.... do you really want them as a client? When they have trouble paying their bills later were you not kind of warned about it up front when they had an issue paying you?
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  • Profile picture of the author AmyKay
    Update: Closed on this deal today! $799 set up fee, 20% of ad spend!

    Thanks to all!

    Now I'm off to make him loads of money!
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    • Profile picture of the author socialbacklink
      Originally Posted by AmyKay View Post

      Update: Closed on this deal today! $799 set up fee, 20% of ad spend!

      Thanks to all!

      Now I'm off to make him loads of money!
      That's great that you closed him at 20%. I have done 20% but normally get 15%. Great job!
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