Before I answer your question, I’d like to make sure we are talking about the same thing. If I were to rephrase your question, would you agree ‘how much does an agency charge above the cost of the ads that gets paid to Facebook?’ has the same meaning? I ask for the clarification because my agency does not upcharge for Facebook ad services (meaning take a percentage fee on every transaction). I do, however, charge a fee for my service. I think your intent of your question is to gain an understanding of how much you can reasonably expect to pay a provider.
There are a number of formulas that agencies use. First, an agency will assess whether FB ads make sense for the client. Usually, a client is hiring an agency because the media buying and traffic generation is beyond their own capacity, but they have a product that makes sense to scale and promote.
I’ve seen a few different pricing models.
- Direct percent of Adspend – This is straightforward and usually reserved for larger accounts (a rough estimate of “large” is a monthly budget of at least $10k or more). The percent ranges from 25% to 5% based on the amount of spending. These are usually national if not international, brands and/or scalable products.
- Flat fee – Flat fee pricing is usually reserved for freelancers who are working with local companies (think dentists, restaurants, realtors and similar local business types). Check out Upwork.com to find solo providers or small agencies offering this type of service.
- Mixed – A mixed flat fee with a percent of adspend is a common structure for small to mid-sized businesses working with boutique ad agencies. This pricing model provides a base monthly income for the agency, so they know what their minimum is, as well as adding a percent of spend when the ads do scale and require more work on the part of the agency.
Heads up – there is usually a set up fee as well. Many agencies and freelancers charge a setup fee above and beyond other charges. This is because the work with FB ads is front-loaded -the initial configuration takes the most time.
From the perspective of The Exfil Project marketing agency:
As the Exfil Project Marketing Agency has grown, my team and I have tried a few different pricing concepts. What seems to work best for our clients and us is that we charge a flat fee, plus a percent of adspend. Our minimums are typically smaller than a larger advertising agency, but we can be flexible as a boutique marketing firm. The additional percentages get smaller as the amount of money spent on ads gets higher. This aligns both client and agency objectives as increased ad spend (i.e. successful campaigns) increases revenue for the client and at a slower rate for the agency.
SOCIAL MEDIA ADVERTISING | LEAD GENERATION
Is your business running more than $2500 a month in Facebook ads and wondering if you are getting the most for your money? Maybe there is more you could be doing?
I offer a Facebook Ad account audit for businesses currently running ads. Check it out here ->