Facebook manager wants to charge me a percentage of monthly ad spent

thats normal 10-15% fee... yes

what would you expect to pay?? I would also want clicks involved in the payment as well. If you spend $1,000.00 and do not get any clicks then I would be reluctant to pay anything

al

Do you have legit proof he can deliver great work? Also, why not settle a limit? That could fix things.

Personally, I would charge a base fee or X percent of spend, whichever is greater.

Some charge just a fee, some a percentage, combination, some may also have campaign setup fees.

Anyway, that is how it works.

There is no guarantee of performance, however, it is obviously in their best interest to produce ROI or they know you will leave after a certain timeframe.

I think it's justified for a person to charge their management fees in %. As the magnitude of the spend increases, risk of managing the spend for optimum ROI also increases.

Instead of looking at it as "person would be inclined to overspend, so they can get "overpaid." think of it as someone who is putting more number of hours in analysis, planning, management, and optimization of your high spend account. If you were that guy, wouldn't you want to be paid more. Even if you had hired the person at a flat hourly rate, wouldn't that be justified then?

Hi perneali45,

An advertising account manager could easily perform $2000 worth of services, in labor and resources, working on an advertising campaign.

It just doesn't make sense for an account manager to invest $2000 of his own resources on an account with a $100 a month ad spend, right?

So the advertising manager must curtail most of his account management activities to squeeze into the reduced budget of a small account. That means that small ad spend amount is not going to get the time and attention it needs to perform well until after it has been under professional management for many months. This is due strictly to budget restrictions.

If, however, you are spending $10,000 per month on advertising do you really want only $20 dollars worth of management services for that larger amount of ad spend?

Generally speaking, spending so little time and resources on managing a $10,000 ad spend could seriously harm your pocket book. That would be foolish, it is a bit like stepping over a $20 bill to pickup a dime.

You need to keep the resources spent on managing you ad campaigns proportional to the ad spend, else you are going to end up wasting a lot of money on poorly optimized campaigns. Your campaigns will typically perform much better when the extra work is put into managing them, you just can't allow the management fee to exceed a certain percentage of the ad spend without spending away all the advantages.

Think of the percentage based fee as a "limit" to the amount of work that can be done to improve your campaign performance. You don't really want to "limit" the work, you just need to "limit" the fees to keep them in line with the ad spend. Limiting the fees limits the amount of work that can be done.

You want as much to be done as possible, as long as the fees don't eat up all of your profits. The industry average is about 15% of ad spend. That number isn't arbitrary, it is the number that tends to bring the biggest long term success. Just make sure that the amount of work your ad account manager is performing scales with the ad spend and management fee. You wouldn't want to pay $2000 for the same amount of work the manager did for only $20, right?

The bottom line is that the campaigns need to be made profitable, as long as the profits grow at the same pace as the ad spend then you should be just fine with an increasing management fee. In fact, that is the safest way to protect your ad spend investment, keep ad spend proportional to your sales and profits, and management services proportional to ad spend.

Also keep in mind that the account manager has a built-in incentive to grow your business because his fees will grow along with your profits, provided your ad spend level is proportional to your total profits.

HTH,

Don Burk

That 20% across the board fee may seem a bit ROUGH but......

If he can drastically lower your CPC rate as well deliver solid PROFITS, the 20% might well turn out to be chump change.

It takes money to make money

One more note: Make sure the "FB Manager" is not reducing your average clicks by getting Tier3 countries.

That's a common trick.

Don't get fooled

Focus on profits ie ROI