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Stats, ideas and happenings in the world Pay Per Click Marketing...

April 19th, 2010

PPC Management Fees

Profit Percentages (Sales)

There are some companies that are assured that their methods work that they are willing to only charge a percentage of profits that the pay per click campaign generates. This generally makes an agency seem as though they are more of an affiliate type company then an actually management company.

How Agencies Are Affected

This particular type of billing action is risky for an agency. Basically, with agreeing to engage in this type of billing agreement, an agency is agreeing that once the account that they are managing makes money, then they will begin to make money. However, if the account does not make money, this could mean an array of adverse things of the agency. Before entering into this type of billing situation, there are a few things that an agency must evaluate, in order to assure that this is a wise choice to make:

1. What are the conversion rates that presently exist for the company? For example, if a company avidly engages in orders taken by phone, are these orders accredited to the Pay per Click Campaign?

2. Can the website be changed, if the website is not converting any sales?

3. Can you place a bid on different branded keywords for the site?

4. PPC and SEO can traditionally be utilized in order to increase conversion rates; do you have control over the SEO of the site and the display ads that are placed to promote the site?

5. Will the advertiser be able to track all of their shopping carts, analytics, and other billing systems?

6. Is there a way for the advertiser to track their profits efficiently, in a means that relates to their pay per click campaign?

7. The length of the contract. Setting up a new and successful PPC account can take hours to complete. If the advertiser decides that they want to walk away after a profitable campaign has been made, then there is money lost with the setup process.

Be extremely cautious before entering in this specific type of billing relationship. If your company is opened to taking risk, they may also want to begin engaging in affiliate advertising campaigns conjointly with their current campaigns.

How Are Advertisers Affected?

If advertisers are willing to engage in this specific billing relationship, the advertiser should also be involved with an affiliate program. Since the advertiser is only working with one PPC company at a given time, if the company fails to convert sales for the advertiser they will instantly cease spending money, since they are not making a profit. Multi-month contracts can hurt your advertising campaign. Advertisers should be aware of all conversion leaks that come their way, and work closely with an agency in order to turn these leaks into a positive conversion for their company.

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