An Analysis Of Paid Search Management Pricing Models

Jeff Berman
July 21, 2010

paid-search.jpgIf you've ever looked into online advertising for your law firm, more specifically at paid search advertising, there is no doubt you've been overwhelmed by the staggering number of companies looking to manage your ad spend for you.  

Just so we are all on the same page, when I refer to paid search marketing I'm talking about spending money on programs such as Google Adwords, Yahoo AdvertisingBing Advertising, and others.  More specifically, what I want to discuss are the host of companies that offer to manage these online advertising and search marketing campaigns for your firm.

In the last few days, I've spoken with 3 different attorneys asking for my opinion and thoughts on different paid search management companies.  It occurred to me that many other attorneys probably have the same questions.  I thought the best way to go about this was to present the most popular paid search management pricing models and explain the pros and cons of each.

Pricing Models Explained

What I lay out below is not an exhaustive list of every single paid search management pricing model out there.  However it encompasses the majority of what you'll find.

Flat Monthly Fee

How It Works: In this type of model, the company will charge you one flat fee each month.  This fee will include your adspend as well as the management fee.  However, the exact amounts of each will not be broken down for you. 

My Thoughts: My biggest issues with this type of setup are transparency and misaligned incentives.  The lack of transparency is a problem in that you don't know how much of your monthly fee is going towards buying ads for you and how much is going into the management company's pocket.  Incentives between your firm and the management company are misaligned.  Ideally, they want to spend the least amount they can on advertising for you while retaining your business.  The less they have to spend to keep you paying each month, the more they can pocket.

Flat Managment Fee + Ad Spend

How It Works: The management company will charge you a set amount to manage your paid search campaign each month on top of the money you are putting towards your ad spend.  

My Thoughts: This setup is better than the previously mentioned arrangement.  This provides transparency and encourages the management company to maximize their performance with your ad spend.  This is a good option for larger ad spend budgets so your management fees stay under control.

Percentage of Ad Spend

How It Works: A certain percentage of your monthly ad spend budget goes to the management company.  Typically this is somewhere around 10%-20%.

My Thoughts: The good thing about this arrangement is that there is transparency.  This is a good setup if your monthly budget is smaller.  The bad aspect to this is that the management company has incentive to get you to spend more money each month because the more you spend, the more they make.  However, some management companies set a maximum management fee amount to negate that issue.  As long as you do your budgeting ahead of time, this is an arrangement that can work fine.

Pay Per Conversion

How It Works: You pay a fee each time you receive a lead from the advertising efforts.  Either via a phone call, an email, or both.

My Thoughts: This is a strong avenue since you are paying for real results.  The incentive for the management company is to produce as many contacts as they can for you since they make the most money doing so.  Obviously this is good for you, assuming the contacts are valid, because the whole goal of the advertising is to get your phone ringing.

There are other models that are either slight variations of the ones mentioned above or some combination of them together.   I'd love to hear your experiences with paid search management companies?  Have you had success with any of the above models in particular?

Photo by Danard Vincente

Jeff Berman
Jeff Berman, is co-founder of AttorneySync. "Properly marketing a law firm online is about producing relevant content that helps a prospective client understand your expertise and how you are able to help them. Finally, it’s about getting that content found by the people you are trying to help."
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