Now I've been contacted by an online store that has tried PPC but failed (their sales come from organic search results). They want me to manage their adwords campaign for them.
I'm interested in working with them because I think they are in a good position to succeed. But I'm wondering: is it better for me to do it as an affiliate and charge a commission for the sales I drive, or is it better for me to treat them as a client.
Wouldn't I earn more as an affiliate?
I understand that the industry standard for clients is to charge a flat fee (lets say $2,500) or 10% of the adwords spend - whatever is higher.
As an affiliate I can ask for about 7% of all sales. I assume my profit would be at least 4% of the sales, which I assume is much higher than 10% of the adspend. I would also have the freedom to do things my way (for example, they are opposed to having a newsletter themselves - but I would definitely want to create one)
What's the advantage of working for them as a client? I see that a lot of people here do that kind of thing.
Thanks in advance,
Sara
Check your assumptions carefully. Find out what their margins are, on average, because there's a good chance you'd be able to bid quite a bit more aggressively if you're working within the retailer's margins rather than your own as an affiliate. That could change the math quite a bit.
If you end up with any kind of hybrid arrangement, working directly for the company but with affiliate-style compensation, be sure you have a crystal clear understanding (in writing) about issues like who owns the rights to things you'd do on your own initiative, such as developing content, building a mailing list, and so on. Conflict of interest arguments are Not Fun.
How much of an advantage would they have, from their perspective, with respect to being trained by you, so that they might become capable of doing what you've been doing?
They do not have an affiliate program.
Marcia - that's a huge advantage IMO.
Sara
They can hide the total revenue from you don the road. I would be careful with that..
Thanks for your response.
It looks like the affiliate agreement is not working out.
What's a fair monthly amount to charge?
As I mentioned, someone told me 10% of adspend with a $2,500 minimum. Does that make sense?
Sara
hi
well......
the minimum i would take on a client for is $450 usd upfront +
$250 (up to $1000 spend per month)
$400 (up to $3000 spend per month)
$600 (up to $5000 spend per month)
payable at the end of every month (net 30 days)
a few clients require a larger amount of time
in setup and research or in monthly maintenance
(depending i may charge twice these amounts respectively)
im assuming your perspective client would fit in this range
so comparing 10% of adspend with a $2,500 minimum
(min payment per month is $250)
as a comparison:
spend $1000 or less per month
my rate $250 per month
yours $250 per month
spend $2000 or less per month
my rate $400 per month
yours $250 per month
spend $3000 or less per month
my rate $400 per month
yours $300 per month
spend $4000 or less per month
my rate $600 per month
yours $400 per month
spend $5000 or less per month
my rate $600 per month
yours $500 per month
my minimum term is 3 months
signed contract for the term
afterwords month to month
(i have offered discounts to low maintenance accounts at this point in the past)
i personally think that there is a unavoidable conflict of intrest
when working at a % of spend (imho i think its shady)
But I agree, if a PPC manager is spending carelessly, then yes there's major potential for a conflict of interest.
I like the idea of a discount for low maintenance clients.
buckworks i think the problem is more prevalent with advertisers that do not understand all the concepts involved and do not demand these performance objectives (in a contract) or any at all.
theres one particular company i am aware of that i am convinced is in a constant conflict of interest with there customers even though they have a flat rate
<snip>
targeting bussineses typically sole propriaterships
provide little or no reporting, spending little time on each account monthly and not allowing the advertiser any access to their own adwords account (at all)
they insist on handling the registration with google and insist on credit card postpay
i assume there average client spends between $1000-$1500 per month
yeilding a 30-50 percent mangement fee for the minimum amount of labour
<snip>
[edited by: buckworks at 3:08 pm (utc) on Sep. 5, 2008]
[edit reason] removed specifics [/edit]
So now, I charge based on the account size, but always in accordance with the clients real needs.
for a low maintenance
$10,000 a month client
i would charge
$450 upfront + $1000 per month for 3 months
+ $600 per month thereafter
(10% equivelant followed by 6% equivelant)
for a extremely high maintenance
$2000 max a month client (including management)
i would charge
$450 upfront + $500 per month for 3 months
+ $500 per month thereafter
(25% equivelant)
something about what you wrote makes me feel uneasy
are you by any chance a web designer?
No, I´m not a web designer. But let me explain myself a bit better.
Me, I rather charge in terms of the amount of work/hours, instead of a % from the clients monthly budget. I thinks there's got to be a logical proportion between the monthly spent and the size of the account ( I agree that sometime this is blown out of proportion) If a client wants to spend 10000 u$ monthly but have only 2 ads and 2 campaigns and bid strong on only ten keywords, I can't charge him 10% from the 10000 u$, that would be some how a rip off.
But thi is only my point of view. I respect others.
cheers.
if i can meet a clients objectives best with 15 keywords vs 60 keywords, why should they care?
if my ad copy has a higher CTR then what they suggest
(if the conversion rate is similar), why should they care?
if i add 200 negative keywords on a campaign level and increase ctr/conv rate, why should they care?
they should care only that im doing my job
they shouldnt be paying me extra for these things or testing or running reports unless they are paying on an hourly basis
what it sounds like you do is mostly assisted setup which in my opinion the only way to bill is on a hourly basis.
i am glad that is how you do it.
the web designer comment was not meant as an insult only that it seems you have a much different perspective (similar to the one some web designers i know who dable in adwords)
on another note i hope you have your 10,000 a month client switched to 30 days net.
