kirk williams: ppc pricing debate

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?

@PPCKirk

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@PPCKirk

To the chase!There is noperfect PPCpricing model.

@PPCKirk

To help us think more deeply about our pricing & find the best model for our

individual situations. “ ”—————————

Our Goal Today:

@PPCKirk

but first…

*3*CrucialCaveats

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philosophiam pretium

“What are the underlying

principles that should drive our

pricing model choice?”

your pricing model should fit with your customer relations?

how you measure value matters.

@PPCKirk

Principle #1 - How you measure value matters.

Time

Expertise

Task

Results$

Aunt Edith Brad Geddes

=

@PPCKirk

&

My Take on Measuring Value: Task + Expertise + Results.

$@PPCKirk

principle #2: your pricing model should fit with your customer relations.

@PPCKirk

Status Quo = a la carte

STRESSED brides

We Said: “Screw

ala carte”

We raised prices 50%.

Feedback from Stressed Brides?“We. Love. It.”

pricing should be seen as marketing

@PPCKirk

ask yourself: “How will my future price changes affect my loyal client’s orientation to me?”

pricing should be seen as customer retention

don’t be her@PPCKirk

PPC Pricing Models…

There’s… too many of them!@PPCKirk

Performance??

Combination??

% of Spend??

Flat Fee??

Hourly??

a PPC pricing model analysis.

Pros & Con

s

@PPCKirk

hourly

@PPCKirk

“hourly makes sense to my corporately trained brain…”

HOURLY Benefit #1: Pricing Simplicity

Client

(but…)

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HOURLY Benefit #2: You *Have* to Get Into the Account.

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HOURLY Benefit #3: Helps Prevent Scope Creep

Initial Agreement

2 weeks3 months

6 months

1 year

Amount of Account Work

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“hourly makes sense to my corporately trained brain…”

HOURLY Concern #1: Pricing Disconnect

Client

“…BUT HOW MUCH DO YOU MAKE AN HOUR?!?!”

@PPCKirk

≠

HOURLY Concern #2:

When you look annoyed all the

time, people think that you’re busy.

“ ”

Busy Work ≠ Good Work

@PPCKirk

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

HOURLY Concern #4: Screw You, Tools

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Easy to sell, but selling your soul to the clock isn’t worth it“ ”—————————

HOURLY SUMMARY

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performance

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I make $,you make $

Performance Benefit #1: Rewarding

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No futurehagglingrequired

Performance Benefit #2: Scaleable

@PPCKirk

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performance pricing is like Dudley Dursley

(it’s everyone’s favorite, but is, in reality, quite boorish)

Performance Benefit #3: Sounds Great!

@PPCKirk

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Performance Concern #1: Complicated Negotiating

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Performance Concern #2: What if Client Breaks Something?

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Performance Concern #2: What if Client Breaks Something?

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Performance Concern #3: Seasonal Trends

@PPCKirk

Can you really trust them??

Cancelled Orders

Phone Orders

Tracking Errors

Include Brand??

Performance Concern #4: Data Accuracy

X

@PPCKirk

38%

30%

12%11%

9% Adwords

Organic

Facebook

Bing Ads

Referrals

Performance Concern #5: Last Click Attribution. BOOOOO

1 Order

@PPCKirk

The Performance Model Attribution Pie-Chart

PPC Everything Else

NO T

OUCH

Y!!!!

!@PPCKirk

Looks like puppies and unicorns from afar, Turns out to be werewolves & donkeys.

“ ”—————————

PERFORMANCE SUMMARY

@PPCKirk

flat rate

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FLAT RATE Benefit #1: Simple to Sell

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FLAT RATE Benefit #2: Pricing WYSIWYG

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FLAT RATE Concern #1: Not Growth-Focused

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FLAT RATE Concern #2: Can Invite Scope Creep

Initial Agreement

2 weeks3 months

6 months

1 year

Amount of Account Work

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Simple selling with no eye for the future.“ ”—————————

FLAT RATE SUMMARY

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% of spend

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@PPCKirk

Fee

$1000 $3000 $10,000 $50,000

% of SPEND Benefit #1: Simple to Sell

Fee

Fee

Fee

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No futurehagglingrequired

Fee

$1000 $3000 $10,000 $50,000

% of SPEND Benefit #2: Scaleable

Fee

Fee

Fee

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¯\_( ツ )_/¯ Fee

$1000 $3000 $10,000 $50,000

% of SPEND Benefit #3: Simple to Track

Fee

Fee

Fee

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% of SPEND Concern #1: Misaligned Goals

ClientAgency $@PPCKirk

“Are we seriously going to have to go through this again?”

@PPCKirk

Client Agency

Can we please kill the misaligned goals attack??

$Reality

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% of SPEND Concern #2: Client Issues

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`

Larger SMB Client

% of SPEND Concern #3: Small Account Issues

Medium SMB Client

Small SMB Client

@PPCKirk

Scales well, but small business is the pits.“ ”—————————

% OF SPEND SUMMARY

@PPCKirk

My Model (combination)

+

@PPCKirk

Ad Spend Budget Management Fee

Tier 1 $0 – $2,500 $400Tier 2 $2,501 – $5,000 $800Tier 3 $5,001 - $10,000 $1,200Tier 4 $10,001 - Up 12% of Ad Spend

% of Spend with a Flat Rate Twist

@PPCKirk

Prevents Small

Account Drain

Not Difficultto Sell

ScaleableSpend

Reduction Means Work

Reduction

Client Goals

Aligned with My Goals

% of Spend with a Flat Rate Twist

@PPCKirk

TIP: Always, always, always charge a Setup Fee

Each build is

your Mona Lisa

@PPCKirk

keep searching for

the best model

for you.

@PPCKirk

State of Search Conference, Dallas 2015

Questions? Ideas? Insults?——————————————————————————————————————

@PPCKirk

Slides & Links: bit.ly/ppc-pricing