The Great PPC Pricing Debate - State of Search 2015

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The Great (1-Sided)
PPC Pricing Debate
Kirk Williams
@PPCKirk
State of Search Conference, Dallas 2015

Who am I? Who are you? What is life?
#StateOfSearch
@PPCKirk
@DFWSEM

—————————
#StateOfSearch
@PPCKirk
@DFWSEM

#StateOfSearch
@PPCKirk
@DFWSEM

To the chase!
There is no
perfect PPC
pricing model.
#StateOfSearch
@PPCKirk
@DFWSEM

To help us think more deeply about our pricing &
find the best model for our individual situations.
“
”—————————
Our Goal ...

but first…
*3*
Crucial
Caveats
#StateOfSearch
@PPCKirk
@DFWSEM

but first…
*3*
Crucial
Caveats
#StateOfSearch
@PPCKirk
@DFWSEM

but first…
*3*
Crucial
Caveats
#StateOfSearch
@PPCKirk
@DFWSEM

but first…
*3*
Crucial
Caveats
#StateOfSearch
@PPCKirk
@DFWSEM

philosophiam pretium
“What are the
underlying principles
that should drive our
pricing model
choice?”
#StateOfSearch
@PPCK...

philosophiam pretium
“What are the
underlying principles
that should drive our
pricing model
choice?”
how you measure
valu...

philosophiam pretium
“What are the
underlying principles
that should drive our
pricing model
choice?”
your pricing model
s...

Principle #1 - How you measure value matters.
#StateOfSearch
@PPCKirk
@DFWSEM

Principle #1 - How you measure value matters.
Time
=
#StateOfSearch
@PPCKirk
@DFWSEM

Principle #1 - How you measure value matters.
Time Task
=
#StateOfSearch
@PPCKirk
@DFWSEM

Principle #1 - How you measure value matters.
Time
Expertise
Task
Aunt Edith Brad Geddes
=
#StateOfSearch
@PPCKirk
@DFWSEM

Principle #1 - How you measure value matters.
Time
Expertise
Task
Results
$
Aunt Edith Brad Geddes
=
#StateOfSearch
@PPCKi...

&
My Take on Measuring Value:
Task & Expertise + Results.
$
#StateOfSearch
@PPCKirk
@DFWSEM

principle #2: your pricing model
should fit with your customer relations, unlike Han.
#StateOfSearch
@PPCKirk
@DFWSEM

pricing should be seen as marketing
#StateOfSearch
@PPCKirk
@DFWSEM

Status Quo =
a la carte,
confusing!
pricing should be seen as marketing
#StateOfSearch
@PPCKirk
@DFWSEM

STRESSED
brides
pricing should be seen as marketing
Status Quo =
a la carte,
confusing!
#StateOfSearch
@PPCKirk
@DFWSEM

STRESSED
brides
We Said:
“Screw
ala carte” &
simplified it to
1 flat price.
Oh… and we
raised prices
50%.
pricing should b...

STRESSED
brides
We Said:
“Screw
ala carte” &
simplified it to
1 flat price.
Oh… and we
raised prices
50%.
Feedback from
St...

ask yourself:
“How will my future
price changes affect my
loyal client’s orientation
to me?”
pricing should be seen as cus...

ask yourself:
“How will my future
price changes affect my
loyal client’s orientation
to me?”
pricing should be seen as cus...

PPC Pricing Models…
There’s… too many of them!
#StateOfSearch
@PPCKirk
@DFWSEM

Performance??
Combination??
% of Spend??
Flat Fee??
Hourly??
a PPC pricing model analysis.
Pros
&
Cons
#StateOfSearch
@PPC...

hourly
#StateOfSearch
@PPCKirk
@DFWSEM

“hourly makes sense
to my corporately
trained brain…”
HOURLY Benefit #1: Pricing Simplicity
Client
(but…)
#StateOfSearch
@...

HOURLY Benefit #2: You *Have* to Get Into the Account.
#StateOfSearch
@PPCKirk
@DFWSEM

HOURLY Benefit #3: Helps Prevent Scope Creep
Initial Agreement
2 weeks
3 months
6 months
1 year
#StateOfSearch
@PPCKirk
@D...

“hourly makes sense
to my corporately
trained brain…”
HOURLY Concern #1: Pricing Disconnect
Client
“…BUT HOW MUCH
DO YOU M...

≠
HOURLY Concern #2:
When you look
annoyed all the time,
people think that
you’re busy.
“ ”
Busy Work ≠ Good Work
#StateOf...

HOURLY Concern #3: Discourages Speed & Skill Growth
#StateOfSearch
@PPCKirk
@DFWSEM

HOURLY Concern #3: Discourages Speed & Skill Growth
#StateOfSearch
@PPCKirk
@DFWSEM

HOURLY Concern #4: Screw You, Tools
#StateOfSearch
@PPCKirk
@DFWSEM

Easy to sell, but selling your soul to the
clock isn’t worth it
“
”—————————
HOURLY SUMMARY
#StateOfSearch
@PPCKirk
@DFWSEM

performance
#StateOfSearch
@PPCKirk
@DFWSEM

I make $,
you make $
Performance Benefit #1: Rewarding to both parties.
#StateOfSearch
@PPCKirk
@DFWSEM

No future
haggling
required
Performance Benefit #2: Scaleable
#StateOfSearch
@PPCKirk
@DFWSEM

—————————
Performance Benefit #3:
Sounds Great!
#StateOfSearch
@PPCKirk
@DFWSEM

—————————
performance pricing is like Dudley Dursley
(it’s everyone’s favorite, but is, in reality, quite boorish)
but.......

—————————
Performance Concern #1: Complicated Negotiating
#StateOfSearch
@PPCKirk
@DFWSEM

—————————
Performance Concern #2:
What if Client Breaks Something?
#StateOfSearch
@PPCKirk
@DFWSEM

—————————
Performance Concern #3:
Seasonal Trends
#StateOfSearch
@PPCKirk
@DFWSEM

The Performance Model Attribution Pie-Chart
PPC Everything Else
NOTOUCHY!!!!!
Performance Concern #5:
#StateOfSearch
@PPCK...

Looks like puppies and unicorns from afar, Turns
out to be werewolves & donkeys.
“
”—————————
PERFORMANCE SUMMARY
#StateOf...

flat rate
#StateOfSearch
@PPCKirk
@DFWSEM

FLAT RATE Benefit #1: Simple to Sell
#StateOfSearch
@PPCKirk
@DFWSEM

FLAT RATE Benefit #2: Pricing WYSIWYG
#StateOfSearch
@PPCKirk
@DFWSEM

FLAT RATE Concern #1:
Not Growth-Focused
#StateOfSearch
@PPCKirk
@DFWSEM

FLAT RATE Concern #1:
Not Growth-Focused
#StateOfSearch
@PPCKirk
@DFWSEM

FLAT RATE Concern #2: Can Invite Scope Creep
Initial Agreement
2 weeks
3 months
6 months
1 year
#StateOfSearch
@PPCKirk
@D...

Simple selling with no eye for the future.“
”—————————
FLAT RATE SUMMARY
#StateOfSearch
@PPCKirk
@DFWSEM

% of spend
#StateOfSearch
@PPCKirk
@DFWSEM

#StateOfSearch
@PPCKirk
@DFWSEM

Fee
$1000 $3000 $10,000 $50,000
% of SPEND Benefit #1: Simple to Sell
Fee
Fee
Fee
#StateOfSearch
@PPCKirk
@DFWSEM

No future
haggling
required
Fee
$1000 $3000 $10,000 $50,000
% of SPEND Benefit #2: Scaleable
Fee
Fee
Fee
#StateOfSearch
@P...

¯_(ツ)_/¯
Fee
$1000 $3000 $10,000 $50,000
% of SPEND Benefit #3: Simple to Track
Fee
Fee
Fee
#StateOfSearch
@PPCKirk
@DFWSEM

% of SPEND Concern #1:
Misaligned Goals
ClientAgency
$
#StateOfSearch
@PPCKirk
@DFWSEM

“Are we seriously going to have to go through this again?”
#StateOfSearch
@PPCKirk
@DFWSEM

Client Agency
Can we please kill the misaligned goals attack??
$
Reality: Client doesn’t increase spend
unless client is J...

% of SPEND Concern #2:
Client Issues
#StateOfSearch
@PPCKirk
@DFWSEM

`
$1,500 Spend
% of SPEND Concern #3: Small Account Issues
$1,000 Spend
$500 Spend
SAMEWORKLOAD
#StateOfSearch
@PPCKirk
@D...

Scales well, but small business is the pits.“
”—————————
% OF SPEND SUMMARY
#StateOfSearch
@PPCKirk
@DFWSEM

My Model
(combination)
+
#StateOfSearch
@PPCKirk
@DFWSEM

Ad Spend Budget Management Fee
Tier 1 $0 – $2,500 $400
Tier 2 $2,501 – $5,000 $800
Tier 3 $5,001 - $10,000 $1,200
Tier 4 $...

Prevents
Small
Account
Drain
Not Difficult
to Sell Scaleable
Spend
Reduction
Means Work
Reduction
Client Goals
Aligned wit...

TIP: Always, always,
always charge a Setup Fee
Each build is
your Mona Lisa
#StateOfSearch
@PPCKirk
@DFWSEM

keep searching for
the best model
for you.
#StateOfSearch
@PPCKirk
@DFWSEM

State of Search Conference, Dallas 2015
Questions? Ideas? Insults?
——————————————————————————————————————
@PPCKirk
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