Facebook Ad Agency Pricing: How Much Does It Cost To Hire An Agency?

If you’re thinking of hiring an agency to run your Facebook ads, it’s crucial to understand how much that might cost and what’s involved in the quote they provide you.

Hiring a Facebook ad agency isn’t going to be cheap (unless you get a rubbish one), and there are definitely pros and cons to consider when outsourcing your advertising campaigns to an outside agency.

And that’s what this article is all about – helping you make the right decision for your business.

 I’m going to cover:

  1. The Different Pricing Models You Can Expect to See For Facebook ads management.
  2. How much do Facebook ad agencies charge for managing your Facebook advertising.
  3. Do Facebook ad agencies charge a set-up fee (and what’s included)?
  4. After set-up, what do Facebook ad agencies do? And what’s included?
  5.  When is the right time to outsource your ads?
  6. What does working with Yatter mean?

But first, let me cover a bigger question…

Should you hire a Facebook ad agency in the first place?!

It’s easy to jump to the conclusion that it makes sense to outsource your advertising. But Facebook ads can cost a lot of money to get it right.

Bear in mind that your budget needs to include:

Your campaign ad spend (to promote your campaign) + the agency management fee.

1. The Different Pricing Models You Can Expect To See for Facebook Ad Management

There are a few different pricing structures you’re likely to come across.

The most common pricing structures are:

  • Fixed monthly Retainer
  • Fixed monthly Retainer + Percentage of Spend
  • Performance-based
  • Charge hourly

We’re going to look through each of these, exploring the pros and cons of each.

Fixed monthly retainer

One of the most common pricing models is a simple fixed monthly retainer – where the agency charges you a fixed rate every month.

Retainers can vary in price anywhere from the low £££’s up to £10,000+ per month. The amount an agency charges will be determined by the amount of work required, the agency experience, and whether the agency has any specific expertise you require.

I would say the average retainer lies somewhere between £750-£3000 per month.

Often the agency will ask you for a tie-in period (such as 3 months) to give time for the campaigns to begin delivering results. At Yatter, we ask clients for an initial 3-month agreement but 95% of clients get results within the first month!

Fixed monthly retainer + percentage of ad spend

The second option you might see is the fixed monthly retainer plus a percentage of your ad spend.

This option protects the workload of the agency – if the client scales up their ad spend (sometimes for short periods), the agency is compensated for the extra work they’ll need to do.

Often agencies will include a fixed retainer until a certain level of spending (e.g. £10,000/pm) before then taking a percentage of spending.

This charging structure ensures that the ad agency can devote the appropriate level of time and resources to larger contracts.

The larger the ad budget, the more work that’s required to develop, monitor, and maintain your campaigns.

Performance-based

Performance-based charging is where the agency only gets paid if they generate results.

This structure often works for the client as it means that there’s minimal financial risk, other than their ad spend.

With performance-based pay structures, you might not pay at all until your ad agency delivers results. In this case, the agency usually takes a cut of your ROAS.

This sounds like it might be a good option for the client. However, once the agency gets the results, you can expect to pay significantly more per sale/lead than you would on a retainer. This is making it more costly in the long run.

With performance-based models, the agency is taking on risks their side and relies on the client to have a proven product and funnel for it to work.

Hourly charges

Hourly charging is relatively rare. But, if you’re working with a freelance consultant, rather than a large agency, they might charge by the hour.

Mainly, agencies that charge by the hour offer broader services than just ad management.

The average hourly charge for running and managing Facebook ads is around $137.50, although this varies. According to Credo: around 9% of the agencies who charge hourly rates charge under $50 an hour, while the vast majority charge $101-$150 an hour;

But you could pay up to $500 an hour.

Charging summary

The most important thing when hiring an agency is ensuring they know what they’re doing.

Before any work starts, you should ask them about their processes and how they determine and define their results.

It’s also important to stress here that – like any relationship – it’s a two-sided thing.

Which is the most common pricing approach?

We sent out a request to fellow agencies to find out which pricing approach they favor.

And it seems that the monthly set fee (or retainer) came out at the top. 69% of the respondents reporting retainer-basis as their favored way to charge their clients.

ppc-agency-pricing-poll

2. How much do ad agencies charge?

We’ve seen ad consultants charge as little as £250 per month, ranging all the way up to £10,000+ per month.

Whaaaaat… that’s a big gap, right?!

What do you get for £250/pm vs £10,000/pm?

Many factors go into the price of done-for-you Facebook ads.

 Most are based on:

  • How much experience the agency has
  • How complex the project is
  • The ad budget of the client
  • The return on investment generated

 What makes Facebook Ads As A Service different from other creative marketing is that the results are very black and white. It’s very easy to see in Facebook reports whether the agency or consultant has generated a positive return on investment or not.

If the consultant is generating you £10,000/pm in profit and is charging you £1,500/pm, it’s a good deal, right?

But if they charge you £500/pm and generate no return, it’s not a good deal, obviously…

 

3. Do Facebook ad agencies charge a set-up fee? And what’s included?

When you first enter into a relationship with an agency, they’ll often charge a set-up fee, which covers a range of preparatory tasks:

  • Onboarding – exploring existing ad tracking processes, understanding your in-house systems and existing funnels
  • Competitor research
  • Audience research
  • Examining historical ad campaigns through Facebook Business Manager

This set-up period takes a lot of time to get right and – typically – you’ll be charged upfront.

Here’s a list of onboarding tasks your agency is likely to complete before getting started on your campaign work:

  • Gaining access to assets

    – creating logins for your Facebook Business Manager and any other accounts the agency will need to access. Always make sure that your agency uses your Facebook Business Manager account – never let them use their own.

  • Business Manager configuration

    – the Business Manager looks pretty complicated to the untrained eye. And chances are – unless you’ve previously had someone set it all up correctly – it’ll need configuring. This includes setting up domains and verifying related accounts and accesses so that everything “just works” (and reporting is operational) once the campaign is up and running.

  • Business audit, audience research, competitor analysis

    – your ad agency needs to understand your business and WHO to target in your future campaigns. And they need to know about all your competition.

  • Developing the Campaign strategy

    – based on brand objectives, audience, and competitor activity.

  • Creation of landing pages (if required)

    – for Facebook ads to work optimally, it’s helpful for your agency to have access to dedicated landing pages that connect to funnels set up to report conversions.

  • Pixel & tracking implementation

    – the Facebook pixel tracks your audience behaviours and actions once they’ve seen your ad. It is  reporting back whenever your CTA has been fulfilled – essential in monitoring campaign success.

  • Integration with other platforms, such as your CRM

    – your ad agency may need access to your in-house systems and CRM so that they can integrate the data with their own monitoring systems.

  • Creative and copywriting creations

    – your agency might not have all of the creative for the entire campaign before they hit “GO!”. However, they’ll undoubtedly have their trial content based on their initial research to get things rolling.

  • Campaign build

    – time to develop the campaign in line with campaign objectives. This must happen before anything rolls out.

 At Yatter we opted to scrap all set-up fees for our clients. Hiring the right agency isn’t an easy decision, so we wanted to do our bit to make it a little less-difficult. In certain circumstances, we may have to charge for a set-up if the set-up requirements are massively out of scope, but it’s rare.

4. After set-up, what do Facebook ad agencies do? And what’s included?

Once the onboarding process is over, there’s a huge amount of work that goes into launching a successful campaign.

The agency will gather its onboarding findings to set up the first campaign. They may be responsible for producing new creative (or that might remain in-house), and they’ll set up the first campaign to arrive in front of the right people.

Then, after launch, it’s all about monitoring and managing:

  • Identifying what’s working and what’s not
  • Continuous split testing of ads and audiences
  • Reporting back to clients with result

 Monitor and Manage

Different agencies will get involved in your business in different ways. For example, some agencies might JUST run your ads for you, while others will take control of your ads, email marketing, and even create a complete funnel for you, including the creation of landing pages, etc.

Of course, the more complex the project, the more likely there will be an impact on price. An ad agency that solely runs Facebook ads will very likely charge less than one that takes over your broader marketing vision, creating landing pages, email campaigns,  and developing funnels.

However, managing a Facebook advertising campaign is often just the tip-of-the-marketing iceberg. For ads to perform optimally, there’s a whole host of other things that need to be in order: content strategy, follow-up processes & sales.

However, this section is about what you can expect from any Facebook ad agency, so we’ve put together a comprehensive list of the tasks a typical Facebook ad agency might do after onboarding:

 Campaign build

This is about developing the approach and content for an entire campaign. This should be a fairly lengthy, thorough process, especially if an ad agency checks and double-checks everything (which they definitely should!)

 Daily campaign check-ins & metrics monitoring

Once the campaign has kicked off, the agency needs to monitor progress. They’ll analyse the metrics presented in the Facebook Business Manager so that they can report the outcomes to the client.

If your agency isn’t checking the campaign results daily, there’s a ton of performance data they’re missing out on. This task leads to:

Continual campaign optimisation

If the agency monitors campaign outcomes daily, they’ll have a clear idea of what’s working (and what’s not).

They should continually optimise the results; scaling and reallocating budgets according to campaign performance.

And if an ad isn’t performing, the agency will make the decision to turn it off while testing alternatives that may work better.

Ongoing strategy, planning, and “thinking time”

An advertising campaign is “alive”; it lives and breathes. And – just like everything in life – things change.

A proactive ad agency will continually audit its strategy, making appropriate changes to optimise the outcomes. Great Facebook ad agencies never sit on their laurels (have you ever sat comfortably on a shrub, after all?).

 At Yatter, we sit down with all clients each quarter review the previous quarter, and strategise about the quarter ahead.

Client communications & reporting

A great Facebook ad agency should keep you up-to-date regularly.

You might not want a daily update (or perhaps you do). Make your expectations clear, and make sure your agency complies.

You might not understand all the graphs and charts on Facebook Business Manager, but your agency will, and they should report results in a language that makes sense to you.

Expect regular emails, calls, and easy-to-digest reports.

 Regular creative and copy rollouts

Great advertising campaigns need frequent, fresh content, but the rate of change depends on your audience.

You want to trickle out new creative and copy at a rate that won’t overwhelm your target audience but maintains excellent visibility of your brand in a non-invasive way (unless you’re going for the jugular!).

This is all about keeping things fresh and continually testing outcomes.

 Ongoing research and analysis of competition, audiences, and market

Finally, an agency that knows the market understands how to place you above the precipice of your competitors. They should know how your competitors are doing things and be analytical about what works for the target market.

A thorough understanding of WHO is going to consume your marketing content gives a campaign appropriate direction.

In summary, a great ad agency can be a fantastic investment for you and your business. It’s an excellent partnership: they free up your time (so you can concentrate on running your business), and they generate leads and potential clients to help your business grow.

Win-win.

But:

You need to ensure your business is ready to invest in a marketing agency.

5. When is the right time to outsource your ads?

When we receive enquiries from businesses, we look for a couple of things…

 Do they:

  • have a budget of £3,000/pm or more (or the GBP equivalent)
  • have a proven online sales funnel

If the answer is yes to either of these, we’ll look further into working with them.

What is the right time to outsource to a Facebook agency?

We’d say these could be desirable conditions:

  1. You’re a funded startup, and you want to test proof of concept.
  2. You have a large budget and want to drive customer acquisition.
  3. Your current Facebook ad strategy is no longer working.
  4. You need someone with more experience (and a deep understanding of the technical aspects of Facebook advertising) to help you scale.
  5. You no longer have the capacity to continue running your own ads.
  6. Your current agency hasn’t been producing the results you need to help your business grow.

6. What does working with Yatter mean?

Yatter is a renowned lead generation agency that specialises in scaling organisations through the power of PPC advertising. Working with Yatter means equipping yourself with the knowledge of industry professionals who are capable of delivering the results you need for your business. It’s the stress-free way of going about getting your advertising done, all made simple through our unparalleled expertise. Don’t believe us? We have a LONG list of successful partnerships with a vast range of businesses. Check out our Case Study page to find out what we’ve done for them (and what we might be able to do for you!).

 Thanks for reading, y’all!

 

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