THE LIBRARY · A PLAIN GUIDE
What does Google Ads management cost, and what should the fee buy?
If you're pricing out Google Ads, here's the part that's easy to miss: you'll be paying two bills. One goes to Google, and one goes to… well, whoever's running them. The first one is simple enough, at least until you read Google's own fine print...
Google's own help page on budgets says the amount you spend "is entirely up to you." In the next paragraph, it says that on any given day your spend "may exceed your average daily budget by up to 2 times." The month is capped at 30.4 times the daily figure, so $10 a day is $304 a month, whatever happened on Tuesday. That's the first bill, and it goes to Google.
The second bill is the fee for running the account, and it's the one you're probably here about. Most of what you need to know about Google Ads management is in how those two bills relate to each other.
Published fees for that second bill run from $249 a month all the way up to "$4,500 or 12% of ad spend, whichever is greater." That spread has less to do with quality than with three different ways of charging, and each one rewards the agency for something different.
Which bill is which?
Ad spend goes to Google (or Meta, or wherever the ads run) and buys the clicks or the leads. Nobody marks it up unless they pass it through their own account, which is worth asking about. You set it, and Google's rules above are the only ones that govern it.
The management fee pays a person or an agency to decide where the spend goes: which searches to bid on, what the ad says, where the click lands and what to turn off. The fee is the same whether the ads work or not, which is the whole reason to understand it.
So if a proposal gives you one number, one of these is folded inside the other. Ask for both, and ask whose account the spend runs through.
How do agencies charge?
There are three models, and most published prices follow one of them or mix two.
A flat fee. The same amount every month, set by a tier of spend. One national agency publishes exactly this: $750 a month for $100 to $5,000 of ad spend, with a first month at $1,200 that includes an audit. A contractor-focused agency starts its Google Ads and Local Services Ads management at $2,000 a month, described as "a flat monthly retainer set by your ad spend." And a low-cost provider for home-service businesses charges $249 a month after a $149 first month, with no contract and no setup fee.
A percentage of spend. The agency takes a share of what you spend, commonly 10 to 20 percent. The national agency's own summary line says management fees are "typically 10% – 20% of your ad spend or around $1,000 to $3,000 per month."
A hybrid: whichever is higher. Above a certain spend, the flat fee becomes a floor. That same agency's middle tier, for $5,000 to $30,000 of spend, is "$975 or 15% of spend, whichever is higher," and its top tier is "$4,500 or 12% of ad spend, whichever is greater." The contractor agency's fee "goes up as you spend more on ads," though it doesn't publish a formula.1
Here's what each model rewards the agency for:
| Model | Rewards the agency for |
|---|---|
| Flat fee | Keeping you as a client. The fee doesn't move with results or spend. |
| Percentage of spend | Spending more, whether or not more works |
| Hybrid (flat or percent, whichever is higher) | Spending more, with a floor if you spend less |
Flat fee
- Rewards the agency for
- Keeping you as a client. The fee doesn't move with results or spend.
Percentage of spend
- Rewards the agency for
- Spending more, whether or not more works
Hybrid (flat or percent, whichever is higher)
- Rewards the agency for
- Spending more, with a floor if you spend less
None of these is wrong. A percentage can be fair when the work really does grow with the spend, and a flat fee can be too low to cover real attention. What matters is knowing which one you're agreeing to. A fee that rises with spend gives the agency a reason to recommend more spend, so when an agency suggests a bigger budget in month three, find out whether its own fee goes up when you say yes.
One more number, because it explains some of the cheap fees. At least one wholesaler still shows a rate card for agencies that resell its management under their own name: under $5,000 of click budget, "$149 min or 10% of Click Budget." So if a $249 fee seems too low to cover a person's time, it may be because the person isn't at the agency you're paying. That isn't necessarily bad, but it's worth asking who actually touches the account.
- $3,000 of spend$750 a month
- $10,000 of spend$1,500 a month
- $20,000 of spend$3,000 a month
From its published tiers.
What should the fee buy in a month?
Decisions, and a record of them. Here's what a month of real management on a small account looks like:
- Searches reviewed and the irrelevant ones excluded (the HVAC company paying for "hvac technician jobs" from job seekers, or the dentist paying for "dental school").
- Bids and budgets adjusted around which searches turned into calls or forms, which takes call tracking and a form that reports.
- The ad text changed when a better line turns up, and the landing page checked to see whether people who click actually call.
- A short written note of what was changed and why, with the numbers that matter: cost per lead and cost per booked job, not clicks.
Now hold the second bill up against that list. If all it bought was a dashboard, you got the first of those at most. A dashboard can't tell you that nobody's looked at the search terms since March. (Our piece on what a marketing agency does in a month makes the same point about the whole relationship: ask for the work list, not just the chart.)
How much should the spend be?
Enough to learn something in the first 60 to 90 days, and no more than you'd be willing to lose finding out. There are a couple of published rules of thumb, and one you'll work out yourself:
- What the agencies say. The low-cost provider above says its "minimum budget recommendations start at $775 per month." The national agency says "there is no strict minimum budget to run PPC ads" and that you can start at $1 a day, then recommends, in the same answer, "$1,000 to $3,000 per month" for a campaign that gathers meaningful data.
- Set it by the month. Because Google caps the month rather than the day, the number to decide is monthly. Pick what you can stand to spend in a month, divide by 30.4, and that's your daily budget.
- Your own rule. Take the most you can pay for a new customer, and multiply it by how many more customers you could take. Our piece on how much a small business should spend on marketing works that out in three numbers. For a business where one new customer might be worth a few thousand dollars, like a heating and cooling company, a few hundred a month can be a real test. For a $40 ticket, it usually can't.
If you're a service business, check Local Services Ads before Search. Google's own page lists the categories that qualify, including "HVAC (heating or air conditioning)," plumbers, electricians and appliance repair. The model is different, too: you "only pay when a customer gets in touch from your ad," not per click. Google screens the business, and the Google Verified badge is the result, "signaling to consumers that your business has passed Google's proprietary screening process." Ads can run while the screening is still underway, but they rank below the businesses that have passed. The requirements include a license or business registration, plus reviews. If yours qualifies, it's worth pricing out before Search, and some agencies bundle its management with search ads for one fee.
- $775 a month$25.49 a day
- $1,000 a month$32.89 a day
- $3,000 a month$98.68 a day
Which terms matter more than the fee?
Two agencies with the same fee can still be very different deals. Here's where they part ways.
Who owns the account
Most agencies promise the account is yours. It's a standard line, so it rarely sets one apart. The exceptions are published, though, and they're instructive. The $249 provider says it "will create a new Google Ads account for your campaign and retains ownership of the Google Ads account." If you leave, the history, the learned data and the ad copy stay behind, and the next person starts from nothing.
The first month
First months are often priced differently from the rest. The $249 provider's is $149 and includes setup, and the national agency's are $1,200, $2,250 and $5,800 by tier, each including an audit. Ask what the first month includes and what'll be live by the end of it. "Gathering data" for 30 days is reasonable for a brand-new account, and a lot less reasonable for one that's been running for two years.
The minimum and the way out
Plenty of ads providers advertise "no long-term contracts," and they use it as a selling point. A short minimum can still be fair, though, because a change made in month one needs another month or two before its numbers mean anything. If a proposal asks for six or twelve months on ads alone, ask what the extra months are for.
Whatever the term, add up the fee for all of it, plus the spend, before you compare. Here's the math on two of the published examples. The $249 fee on its $775 recommended minimum spend is about $1,000 a month. The $750 fee on $3,000 of spend is $3,750. Those are the numbers to compare, along with what each one buys from the list above.
The stop
Agree, before the first month, on the cost per lead or per booked job that would mean the ads aren't working, and the date you'll both look at it. An agency that names that point before you start is one that expects to be measured. Our piece on whether agencies for contractors actually work sets out a 90-day test built around that point, and the one on choosing a marketing agency has the rest of the checklist.
The two numbers on one page
So, back to those two bills. Before you sign anything, put both on one page for every proposal you're weighing: the fee and the spend, each added up through the minimum. Next to them go two checks. Is the account in your name? And will you get a written note each month of what was done? Laid out like that, the comparison mostly makes itself. The cheapest agency per month isn't always the cheapest per customer, and the monthly note is where you'd see the difference.
| For each proposal | Proposal 1 | Proposal 2 | Proposal 3 |
|---|---|---|---|
| The fee, through the minimum | blank | blank | blank |
| The spend, through the minimum | blank | blank | blank |
| Account in your name? | blank | blank | blank |
| A written note each month? | blank | blank | blank |
And before any of it: if the page the ads land on doesn't turn visitors into calls, no fee model fixes that. Our piece on whether your website needs a redesign is the place to look first, because every click costs the same whether or not anyone picks up the phone at the end of it.
Where we fit
We sell this too, so here's how ours answers the same questions:
- The two bills. An Ads Launch is $1,500, plus the ad spend you pay Google or Meta directly, from an account in your name.
- The stop. It's one campaign with a written verdict on day 30: keep, change or stop. The readout shows what each new customer cost against a threshold we agree on before launch, and why the verdict is what it is. If either one is missing, the $1,500 comes back.
- The fee model. If the verdict is keep, Ads Monthly starts at $750 a month, with $500 of the Launch fee credited. That flat fee covers managing up to $5,000 a month of your spend. Above that, it's $750 plus 5% of the spend over $5,000, so you'd only pay a percentage on what's above $5,000.
- The minimum and the way out. Three months, then 30 days' notice. If we recommend stopping, or a month's fee is refunded, the minimum ends right there.
- What the fee buys. A note every Friday, a log you can open any time, and a review in plain English each month, including what failed.
If the verdict is change, the readout says what needs fixing first, whether that's the page, the service area or how the phone gets answered. If it's stop, there's no monthly fee, and you keep the account, the tracking and the readout.
Ads are the last thing we'd sell a business whose landing page or phone isn't ready, and the first thing we'd test once they are. On the 15-minute fit call, we'll cover the channel, the spend it would take to learn anything (a Google Search test for a Kansas City business usually needs at least $1,000 a month, and Meta tests can start around $500), and whether a campaign is worth running at all. If you'd rather have the whole marketing question answered in writing first, that's what the Marketing Plan is for, and every price is on one page.
Thirty days from now, you could know.
