We do a % of tracked sales and the account is theirs (they pay for clicks). We like this method because it aligns our goals with the client - aim for ROAS, we strive to sell, not spend. But there's really no perfect way, all have some bias to a degree (like we'd love to have a lower ROAS goal, drive more volume, so I'm not claiming that a % of sales is automatically a superior way to bill - as always, it's about value delivered to the client).
Most do a % of spend, also account belongs to client. Some do a tiered flat rate based on spend level brackets, but it still usually works out to the 10-12% range. Bigger accounts are likely ~10% or lower, smaller ones can climb into the 15%+ range.
If you own the AdWords account, as an Agency, Google has rules about reporting data to the client, if you don't follow those rules, you'll get nuked:
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These rules actually apply to both cases, client owned or agency owned AdWords accounts, but the reporting you must do to assure transparency, when you own the account, are more difficult to comply with.
Personally, I think the client would not want to feel so removed from control and access, but there are several good agencies that do agency-owned.
Careful on % of sales (like we do), you're taking responsibility for tracking and conversion optimization to a heightened level, which can cut both ways.
"Best sources for reading how to initially set up and then manage the campaigns?"
Read Brad Geddes articles until your eyes bleed, then read some more. Sprinkle some Larry Kim in there too. Rimm Kaufman blog and news articles for enterprise / large accounts. But keep going back to anything Brad G writes, his acumen, clarity and level of disclosure are unmatched.
On top of AdWords, layer in continuing education and reading on attribution, multi-channel analysis, and site analytics (Avinash Kaushik).
Your clients will expect you to stay up on SEM news and updates:
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How you'll manage should be primarily determined by your client's goals - don't be a Guru, but a Sherpa.