Agency Pricing Models: Commonly Used Formats
Are you running Facebook Ads for clients and aren’t quite sure how you should be charging them? Or maybe you’re thinking about getting started and are wondering how to figure out your pricing. Let's go over the different agency pricing models and which one would work best for your agency and for your clients.
Facebook Ads management pricing can be broken down into four main categories. A monthly retainer, percentage of ad spend, a flat fee or a commission-based model. There are other pricing models that can be considered, but we are going to dive into these four most commonly used models.
A set amount that is paid to you on a monthly basis is called a monthly retainer. This amount is based on the amount of work you are doing for the client and the number of ads you're running. Monthly retainers are a great option when it is clear the amount of work you need to do for the client and you have an idea of how long it takes you to complete that amount of work. This works well if your agency also does web development, video production and graphic design as well.
Percentage Of Ad Spend
If you are working with larger ad spend budgets, this is a great option. You would receive a percentage of the ad spend budget, generally ranging from 10-50%. In general, all work is covered under this amount, making it an all-inclusive approach. Since you agree on an exact percentage, it is easy to calculate and track your payments.
A flat fee could be a good alternative if you're running a focused campaign for a client in a fixed time period. With this model, it is clear what you’ll be charging and the exact task you will be completing. If you're completing a task that requires extra work, this puts the agency in a position where profit is being reduced every additional hour worked.
A commission-based structure provides you with a 5-25% of overall revenue profit. This could be a good choice if you're working with a new brand or company that is just starting up. This is great for companies that have a good foundation but aren't quite ready for a monthly retainer. Take on the deal with companies that you are impressed with the brand and quality when using this structure.
*Be cautious when using this model. If you're a top-talented agency, know your worth and be sure to charge accordingly.
Find out what pricing model works best for you and your clients. Keep in mind, you can use different pricing structures based on the client and the work that you're doing for them. What pricing models have you found work best for your agency?