Understanding the factors behind Google Ads management pricing: What you need to know

Marketing | July 27, 2023 | 13 min read

If you’re a digital marketing solutions reseller, including Google Ads management in your wheelhouse will help you land more clients, maximize your monthly revenues, and deliver serious ROI that keeps customers coming back month after month.

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But if you want to ensure those revenues don’t get swallowed up by unexpected costs leaving you with little profit to show at the end of the month, you’ll need a rock-solid understanding of how to structure your Google Ads management pricing (previously known as Google Adwords).

By the end of this article, you’ll know exactly which considerations should factor into your Google Ads management fees, so you can create a pricing structure that works for you and your SMB clients.

Table of Contents

What’s the average cost of Google Ads management?

When determining pricing for just about any product or service, it’s normal to look at industry averages to get a realistic sense of the range of acceptable prices. Google Ads management pricing is no different.

Of course, like all digital marketing services, there’s no one-size-fits-all pricing model that can be applied to every client. We’ll go over 10 factors that will impact your Google Ads management fees in a moment, but first, let’s take a look at some average rates and pricing structures you might see from other digital ad management providers.

The flat monthly fee approach

Just as the name implies, this pricing structure involves charging clients a flat Google Ads management fee per month. It’s not uncommon to have an additional one-time setup fee at the beginning of the business relationship.

In a flat monthly fee model, the monthly cost can range from $200 per month at the low end to $4000 per month at the very high end, with most plans landing somewhere in the $500-$2000 range.

Most digital marketing agencies using this pricing structure offer tiered fees based on the client’s monthly ad budget. For example:

  • Tier 1: $300 per month for ad budgets under $1000
  • Tier 2: $500 per month for ad budgets under $3000
  • Tier 3: $2000 per month for ad budgets under $8000
  • Tier 4: $3000 per month for ad budgets above $8000

Managing larger ad budgets is a greater responsibility, which is reflected in the higher monthly fee. However, it can also produce better ROI for every dollar spent.

This approach is transparent, convenient, and easy to calculate, but one potential downside is that clients may be incentivized to limit their ad spend to just below the next tier to avoid a higher monthly bill.

This approach charges clients a percentage of their monthly ad spend. Like the flat-fee approach, it might also include a setup fee at the beginning of the contract.

For example, an agency might charge 20% of the ad spend, whether that’s $1000 per month or $15,000 per month. A benefit of this structure is that as the clients see results, they have every incentive to increase their spend, and your agency will enjoy a proportional boost in revenue as a result.

The outcome-based approach

A less common approach to Google Ads management services pricing is to charge based on how many times the desired outcome occurs. Usually, this would be a conversion, but it could also be leads generated or some other outcome. For example, an agency might charge $10 per conversion on a $100 product.

The hourly approach

The hourly approach to Google Ads set up and management pricing doesn’t take ad budget or sales conversions into account, instead charging a straightforward hourly fee for any time spent on delivering ad management services.

A combined approach

Many agencies combine elements of multiple Google Ads management pricing approaches to arrive at a structure that works for them. For example, you could combine the monthly fee approach and the markup on ad spend approach by charging a flat monthly fee of $1000 plus 10% of ad spend.

Setting your Google Ads management services pricing: Key factors to consider

Regardless of which pricing structure you choose, you’ll need a complete picture of your Google Ads management costs to ensure you charge a fair rate that’s sustainable for your agency. To do that, consider the following 10 factors and how they might impact your pricing.

The complexity of your advertising campaigns

Google Ads accounts can hold multiple campaigns, each of which can have multiple keyword-clustered ad groups nestled in it, with multiple ads in each ad group.

Confused yet? It’s easy to imagine how Google Ads management can quickly become highly complex if many campaigns, ad groups, keywords, and ads are required to execute a strategy.

The complexity of a Google Ads campaign will directly influence the cost of management services. From keyword research and custom targeting options to creating a wide range of creative and ad copy options for multiple ads, more time and effort is needed to run a complex, multipronged advertising strategy. Whether you handle it in house or outsource to white-label PPC experts, meticulous management and careful optimization are required to get results.

The bottom line: The more complex a campaign is, the more effort and resources are required, justifying higher Google Ads management fees.

Pro-tips

More complex isn’t always better. If you’re new to offering Google Ads management services, follow these best practices for each client:

  • Start small: Begin with straightforward, focused, and lower-cost marketing campaigns, and add complexity over time. As you get more data on your client’s Google Ad pixel, your campaigns will become even more effective thanks to better targeting and remarketing.
  • Plan ahead: Take the time to conduct keyword research, competitor analysis, and audience analysis before spending on ads to maximize ROI.
  • Simplify with tools: Solutions like Vendasta’s Advertising Intelligence enable you to get a birds-eye view of your campaigns at a glance, making it much easier to manage complex campaigns efficiently.

The size of your client’s Google Ads account

Your client may already have an active Google Ads account when they come to your agency for support. Their account’s size is determined by the number of campaigns, ad groups, keywords, and the total number of active ads within the account.

Even if you’re taking over already-established campaigns, don’t assume there’s any less work involved in managing them. Larger accounts will require more attention to effectively manage and optimize, even if they’re already humming along and generating ROI.

The workload involved includes reviewing data, generating reports, making strategic decisions about which ads to continue running, creating new ads, performing A/B tests, and more.

The good news is that if your client or prospect already has a large, active Google Ads account, they likely have realistic expectations about the fees required to manage it.

Pro-tips

If you’re taking over a large Google Ads account, keep these tips in mind:

  • Know before you quote: Make sure you can see just how much is going on in a business’s Google Ads account before you provide a quote for your services.
  • Don’t be afraid to optimize: Your clients may benefit from simplifying their Google Ad account. In this case, you might be able to remove some redundant campaigns or ad sets, streamlining their marketing strategy while keeping your costs in check.

Your client’s advertising budget

Your client’s PPC budget will, of course, have an impact on the price you offer them.

A larger advertising budget signifies a greater potential for profit, but also produces more work for your agency to manage and optimize a large sum of ad dollars each month. That’s why the most common approaches to Google Ads management services pricing incorporate higher fees for higher budgets one way or another, either through tiered flat rates or as a percentage of the total ad spend.

Since higher advertising budgets allow for more expansive campaigns, testing of different strategies, and better potential reach, they can lead to better ROI for clients despite the higher fees required.

Pro-tips

Whatever spending bracket your clients fall into, consider these tips:

  • Don’t sell yourself short: Managing big-budget campaigns requires a lot of work and responsibility, so don’t be afraid to charge more as the client’s budget increases. Charging a percentage of ad spend can be a good way to scale your revenue.
  • Consider a minimum monthly spend: It can be difficult to generate much ROI with very limited budgets, so you may want to consider a minimum monthly ad spend for new clients. If you use white-label Google Ads management, find out what your costs will be before setting your client-facing pricing.

Geographic targeting requirements

Google Ads PPC pricing isn’t globally uniform. Audiences in different geographic areas have different characteristics, budgets, and more, which impacts the cost of reaching them.

Your clients may be targeting a region or city with higher costs per click (CPC) for their industry, making it difficult to predict exactly how far a given budget will go until you test it out.

Further complexity can be introduced by targeting multiple locations, using multiple language variations, and more. For example, a client targeting multiple countries may require you to create separate campaigns or ad groups for each location, translate ads into various languages, and research local competitors and market conditions. This would increase your costs relative to a more straightforward, one-location business.

Pro-tips

Want to get impressive results regardless of your client’s targeting requirements? Use these tips:

  • Target location-specific keywords: If you’re targeting multiple locations, consider using location-specific keywords to attract customers in each region.
  • Familiarize yourself with Google’s built-in geotargeting tools: Google Ads has robust geotargeting tools that let you tailor your ads to specific geographic locations. Get to know these tools to use them effectively.

Competitiveness of your client’s industry

Every SMB faces a unique level of competition defined by their niche and geographic location. For example, a hair salon in a busy downtown core might face a high degree of competition, while an auto repair shop might enjoy relatively little competition.

Successfully using Google Ads to generate ROI for the hair salon would likely require more strategic and careful bidding and optimization strategies, leading to higher management costs than the auto repair shop. The hair salon might also need to place higher bids to get the best ad placements, which can put upward pressure on their monthly ad budget.

Pro-tips

While some clients may require more carefully strategized ad campaigns to be successful, these tips will help you get them results:

  • Research the competition: Knowing the local competition can help you come up with strategies to differentiate your client and communicate their unique selling proposition (USP).
  • Use bid optimization tools: Google’s algorithm is pretty clever. Often, using built-in bid optimization tools, like Google’s Smart Bidding, can help you succeed even in highly competitive niches.
  • Get creative: Rise to the challenge of advertising in a competitive industry by constantly A/B testing different ad copy, creative, keyword, and targeting strategies to get the best results.

Your agency’s service level

The scope of services provided by your agency will impact your Google Ads management pricing. Additional services beyond basic setup and management might include:

  • Landing page optimization
  • Ongoing reporting and analysis
  • Regular strategy meetings

 

It’s worth noting that these services contribute to better overall performance and higher ROI, making the additional cost worthwhile for many clients—and making them well worth including in your PPC reseller packages.

Pro-tips

The old familiar rule that you get what you pay for certainly applies to Google Ads set up and management pricing. These features should be included in your digital advertising services if you want to ensure your clients are satisfied:

  • Detailed reports: Regular reports build trust by demonstrating transparency and helping clients understand what they’re getting from your management services.
  • Regular check-ins: Don’t wait for your clients to come to you with questions. Instead, check in regularly to help them feel confident that you’re on the job. This can be a regular phone call, a quick Friday email, or any other format that works for your agency.
  • Bundle options: Give clients the option to bundle PPC with SEO and other related services. They can enjoy discounted service rates on local SEO and digital advertising while you can maximize your revenue and customer lifetime value (LTV).

Your agency’s reputation and expertise

The more experience your agency has in delivering advertising management services, the more you’ll be able to charge.

Social proof goes a long way, and as you build up your client roster, you’ll be able to build case studies proving the ROI you can deliver, gather testimonials, and generate word-of-mouth buzz. These build trust in the eyes of new prospective clients, justifying a higher Google Ads management cost for your agency.

Pro-tips

  • Create a referral program: Incentivize existing customers to bring new business your way by offering discounts, extra services, or other extras in return for successful referrals.
  • Showcase testimonials on your homepage: Don’t make prospects dig for testimonials: display them prominently on your agency’s homepage where they can’t be missed.
  • Build a portfolio: As you get more clients under your belt, put snapshots of their case studies together in a portfolio that can easily be downloaded or emailed to entice prospects to learn more.

Specific client goals and objectives

Each client brings unique business goals and objectives to the table, and these can directly impact your Google Ads management cost.

If they have ambitious targets for aggressive sales growth or want to target highly competitive keywords, these demands should be reflected in the cost of your services. More strategizing, time, and resources may be needed to deliver on lofty ambitions. This remains true if you use white-label PPC pros to work under your agency’s banner, since you’ll likely be charged more in turn.

Pro-tips

  • Set SMART campaign goals: Ambitious goals are good, but they should be specific, measurable, achievable, relevant, and time-bound.
  • Ensure an adequate budget: Ensure your client is willing to spend enough on ads each month to reach their goals. If their ambitions are out of proportion to their budget, you might be better off without them.

Duration of contract

Many agencies stick to month-to-month agreements with their clients, but you may want to offer more appealing Google Ads management pricing in exchange for a lengthier contract. A longer-term commitment will give you time to demonstrate your effectiveness, but having to commit to a contract could also push some prospects away.

Pro-tips

  • Determine contract details before starting: Make sure there’s no room for misunderstanding about contract details before you start working for a client.
  • Stick to relatively short contracts: If you offer better rates for longer contracts, limit contract lengths to several months. These days, year-long contracts come off as prohibitively restricting, and may impact your sales.

À la carte value-added extras

You can boost your revenue from each client by offering a menu of value-added extras THAT they can select from on top of their basic Google Ads management services pricing. These might be:

  • Additional or more robust A/B testing
  • Advanced reporting
  • Custom content creation
  • Joint strategy sessions
  • And more

Pro-tips

  • Make sure your basic packages stand alone: You don’t want your customers to feel that they have to pay for extras to see results from your services.
  • Ensure your extras really add value: The idea is never to nickel-and-dime your clients without delivering value. Make sure that any extra services they pay for are well worth the investment.

Frequently asked questions

How do different types of campaigns impact Google Ads management pricing?

The complexity and scope of different types of campaigns can impact Google Ads management pricing. More complex campaigns, like those with multiple ad groups, many targeted keywords, and diversified audience targeting options often require more time and expertise, leading to higher ad management fees.

Are there any industry-specific factors that impact Google Ads management pricing?

Industries with high competition often require more strategic bidding and optimization efforts, leading to higher Google Ads management pricing. More competitive industries also have higher average cost-per-click rates, which can impact the overall advertising budget.

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About the Author

Lawrence Dy is the SEO Strategy Manager at Vendasta. His career spans from starting as a Jr. Copywriter in the automotive industry to becoming a Senior Editorial Content Manager in various digital marketing niches. Outside of work, Lawrence moonlights as a music producer/beatmaker and spends time with friends and family.

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