PPC Campaign Setup Fee - Fair?

[kylesuss]

We already do our PPC campaigns with an agency and we're looking to create another campaign. They told us that the amount of traffic around our campaign would allow for about $2-3k spend per month, possibly with some additional funds placed into display ads. For this campaign, they have proposed a setup fee of $2k and an increased management fee of $750 -- is this a reasonable price?

[kylesuss]

Thanks for the advice. I agree that someone who knows our business would have a better chance of optimizing our campaigns -- just not sure if we have the resources to accomplish this.

As far as the work required by the agency, it would involve only the campaign setup (research & building the campaigns) and optimization after introduction. They will not be doing any landing page optimization.

I guess I feel $2k is a high setup fee to charge when the monthly ad spend is only $2k. I'm not too worried about the $750 management fee, which is the fee that will be applied to the agency's optimization efforts -- but if the traffic is only enough to recommend $2k in ad spend, are they really doing $2k worth of "setup" work? I guess if we had a higher ad spend, it might make more sense to start the campaign, since the setup efforts would remain the same but with a bigger budget.

[EGOL]

Some business areas can easily spend well over $2-3k for just one keyword.  Some can not reach that over all of the profitably relevant keywords combined.  There can be an enormous difference in effort between those situations - both in setting them up and monitoring progress.  Then a person can get into the details of landing page optimization and A/B testing.  Enormous amounts of work can go into that.

So, the bottom line depends upon the difficulty/diversity of your keyword suite and the amount of time that your agency will dedicate to making you money and optimizing.

If I had this situation, I would start experimenting myself (or have a smart employee do it) with PPC and that includes both optimizing the ads and optimizing the landing pages (if you are not doing both you are blowing an awful lot of money).  Then when I knew a little I would attend the two day Adwords seminar of Brad Geddes and run the campaigns myself.

My personal opinion is that a person with inside knowledge of a business, its products and its economics has an enormous advantage over an SEO once he becomes competent with the PPC process and most importantly understands Google's quality score.