Search engine advertising services — why so expensive?

When buying any thing, each client asks dozens of different questions. However, the most common questions are “How much?” and  “Why so expensive?”

In this article, I’ll try to explain the peculiarities of search engine advertising services pricing: what it includes and what budgets should clients allocate when ordering services in specialized agencies.

Why do you think that contextual advertising in the agency is expensive?

“Expensive” means that the cost in the client’s calculator does not match the value he expects to receive. At the same time, client expectations are often as subjective as financial opportunities, extra charges, offer competitiveness, market demand, data on the marginal cost per lead and many other business metrics that directly affect the success of the advertising campaign.

In fact, there are no “expensive” or “cheap” categories for a business where any expense is an investment. It can be either "profitable" or "unprofitable." Once again: “expensive” is subjective perception while “profitable” is an objective measure. In my experience, no entrepreneur has yet asked the question “Why so cheap?”

When contacting an agency or a freelancer, you will receive only a forecast. And you’ll be able to check whether it’s true no earlier than in a few months of cooperation. But what if you need the answer here and now: why does a top agency cooperating with large brands ask $ 500, a local agency with a small team and local clients ask $ 300, and a freelancer ask $ 100 for the same job? Let's figure it out.

1. Pricing is affected by an agency team

As to our agency, a project team consists of at least three workers:

• a project manager is in charge of collecting data, setting goals and decomposing them into tasks, communicating with clients, monitoring the work of the marketing team and reporting;
• an internet marketer is a specialist who develops strategy and creates a set of channels to drive traffic; he is in charge of KPIs achievement and advertising campaign success as a whole;
• a junior specialist is engaged in routine work (for example, collecting keys, clustering, changing rates, etc.; that is, a kind of time-consuming work that doesn’t require high competence in marketing).

The number of team members depends on the number of channels to drive traffic, the volume of the advertising account (the number of goods or services groups), the required speed to launch each stage, and the number of tasks per period.

Besides, there are team leaders of specialists and managers, who provide service quality control and consolidate the experience of different specialists within the team. They act as auditors for all projects and help to prevent problems at an early stage.

Why to pay for work of the additional team members?

It’s the most frequently asked question. Additional resources allow the agency to organize training programs, multi-stage work quality control, create and constantly improve standards for certain actions in the process of service rendering, instructions, checklists and other components. As a result, a client gains additional experience, and most importantly, we may talk about quality standards.

In other words:

• more accurate forecasts because the agency has a lot of data (for example, at the average cost per click in different topics and regions);

• fewer errors because there is a strict control system (for example, “Client Dashboard”, which provides information on the actions and time spent on each of them);
• higher speed of work because the routine is automated, and the effectiveness of many tools has already been tested on other projects in this area;
• transparent results whatever they are (since there is regular reporting).

2. Pricing is affected by combining experience and techniques 

Almost any problem that may arise has been already solved by one of the experts. We have experience in any subject, except for too narrow ones.

The experience of the agency is recorded in the knowledge base: checklists, instructions and other recommendations. Due to the scale of the agency, we find the errors that rarely occur when dealing with a few projects.

3. Pricing is affected by agency reliability

If the agency’s worker has some computer issues, he will get another laptop in half an hour. If a specialist is sick or is going on vacation, his colleagues will substitute him for this period. If a client needs to launch three times as many advertising campaigns the next month, the agency is ready to scale the team to meet the deadline. Deferred payment, payment from different legal entities — no problem.

A client hardly notices such situations when working with a large agency.

4. Pricing is affected by the added value of the agency scaling

Access to unique advertising tools and new traffic sources

Netpeak is a premier Google partner. Therefore, Google has provided us with the support of one of its teams for answers to various non-trivial questions that are not described (and will not be described soon) in the Google Help and access to the Google Ads beta.

For example, last year, when Google Merchant Center only appeared in Ukraine, our specialists had been testing this tool for our clients for several months. Let alone the fact that we used this tool to work in other countries. While others still deal with the functionality of the new tool, our customers are already collecting cheap traffic having low competition.

We also work with programmatic networks, advertising platforms like Criteo and other tools that are not available for small players.

The reputation of the agency in the market

Most clients do not realize real value of the reputation for themselves. Many treat it as a way to increase the agency’s price for the services. But the thing is that the larger the agency, the more painful every mistake made by its employees is. And that is why a large agency will work harder because the advertising market is not as big as it might seem at first glance.

Besides, we regularly write case studies with our clients for our blog. This is one more source to advertise the client’s business.

Client expertise and training

Due to a partnership program, we always have proven companies that can help our client in developing a landing page for a quick launch of an advertising campaign, implementing CRM or calls tracking for proper analytics of marketing effectiveness or any other problems that arise with any online business.

There are special conditions for attending conferences and seminars organized by our company (Digital Healthcare, 8P, SaaS Nation, Online Advertising) or by our partners for each Netpeak client.

5. Pricing is affected by analytics

We do not start working until we properly set up analytics for the client. We do it at the beginning of the first month for all the services we render. As a rule, we either do everything from scratch, or check the settings for collecting data of a client advertising account and, if necessary, make adjustments.

For Enterprise clients, we make custom dashboards and web analytics tools.

6. Pricing is affected by the product the client receives

A product is the process of service rendering for our agency. Due to the clear prescribed system of actions for every participant at each stage, we keep a stable level of quality and increase the likelihood of successful cooperation.

The product of Netpeak agency consists of three blocks — preparatory, main and final.
*For Enterprise clients, we provide extended data on the stages of the service.

7. Pricing is affected by an understanding of the real business goals

In most projects, we evaluate the result of the following performance indicators:

Besides, any type of advertising is set up on the basis of a media plan.

Let’s cut it short: how much does PPC cost and what payment methods are available?

Strategic decisions — the low-end agency commission in Netpeak is $400 (information is relevant at the time of publication).

To select the appropriate solution to the client’s tasks, we take into account the following key parameters:

1. Advertising goals.
2. The set of tools required to reach the target audience.
3. Advertising budget.
4. The number of groups and items of goods / services for advertising campaigns.
5. Terms to achieve the desired results.

Strategic decisions on contextual advertising differ in composition, channels, reporting, and the amount of allocated time.

We also have niche solutions for different types of businesses — a unique set of tools and techniques that proved to be effective for businesses in a particular area. And most importantly — they don’t include tools and tactics that do not work for a business from a specific niche. This is the direction we plan to develop further, and more niche solutions will appear soon.

Conclusions

Contextual advertising services rendered by the agency are “expensive” because, in addition to paying for the cost of advertising systems, it includes payment for:

• a well-built product;
• teamwork;
• transparent reporting;
• infrastructure;
• synergy of experience, reliability and added value of the agency scaling.

All this allows to significantly increase the chances for positive ROI.

However, it’s up to you to decide whether it is profitable for you to cooperate with our agency and whether you need the values I mentioned above.

I’m especially grateful to Andrei Koval (PPC Team Leader) and Roman Efremenko (Marketing Outbound Team Leader) for their help in writing the article.