Agency
What does a Google Ads agency really cost?
The price on the proposal is the smallest part of the bill. Three billing models, what each one triggers inside the agency, and how to weigh a fee against contribution margin instead of revenue.
Published on · 7 min read
- 1Three billing models are common: a percentage of ad spend, a fixed monthly fee, performance-based. Each sets a different incentive inside the agency.
- 2Typical market rates are 10 to 20 percent of media spend, or fixed fees between roughly 1,500 and 6,000 euros a month, depending on account size and depth of work.
- 3Weigh the fee against additional contribution margin, never against revenue. Otherwise you pay an agency for reshuffling revenue you already had.
- 4The most expensive agency is not the one with the highest fee. It is the one still running the same account after three months as on day one.
The question comes up in almost every first call, usually as the second one. And the honest answer is: the fee is the part of the cost you see most easily. The bigger part sits in what an agency does, or does not do, with your budget. An agency that costs 2,000 euros and leaves a 40,000 euro account untouched is more expensive than one that costs 5,000 and pulls half the budget out of brand searches and returning customers.
Still, you need a sense of what is normal. Otherwise you compare proposals that look similar on paper and mean completely different things in practice.
Three models, three incentives
| Model | Typical level | What it triggers inside the agency | Fits when |
|---|---|---|---|
| Percentage of ad spend | 10 to 20% of media spend, less on large accounts | More budget means more fee, regardless of whether the extra euro still earns margin. | Growth is the only goal and you keep an eye on margin yourselves. |
| Fixed monthly fee | 1,500 to 6,000 euros, depending on account size, number of markets and depth | The agency earns on its time, not on your budget. Efficiency in the account is in its interest too. | You steer on profit and want predictability. |
| Performance-based | Small base plus a share of revenue, ROAS or contribution margin | Maximise short term whatever the formula rewards. With revenue as the base: collect brand traffic. | The target is cleanly measurable and both sides see the same numbers. |
Ranges from proposals stores show us in first calls and from public price lists. Not a statement about our own fee.
The percentage model is the oldest and the most comfortable for the agency. It sounds fair because the fee grows with your success. But it does not grow with your success, it grows with your budget. That difference becomes visible exactly when you ask whether the last 10,000 euros of extra budget produced any contribution margin at all. An agency earning on those 10,000 euros will not raise that question on its own.
The fixed fee solves this conflict and creates another: it rewards calm. Whoever receives the same amount for an account every month has an incentive to put as little time into it as possible. That is why a fixed fee always needs a description of what concretely happens in the first 90 days. Without that plan you are paying for availability, not for a rebuild.
Performance-based models sound the boldest and are the most fragile in practice. Almost always the reference is revenue or ROAS. Both are fastest to raise by collecting people who would have bought anyway: your brand searchers, your existing customers. A performance fee on revenue is an invitation to do exactly that. If it works at all, it works only with contribution margin after ad costs as the base and a data foundation both sides trust.
What the price rarely tells you
Two proposals with the same fee can mean completely different work. The difference is where the hours go. In a real rebuild, most of the time is not spent inside the ads account but on what sits in front of it.
- Product feed and Merchant Center30%
- Tracking, consent, data foundation20%
- Campaign structure and bidding25%
- Assets, copy, creatives10%
- Reporting and alignment15%
Schematic split from our projects in the first three months. After that the weight shifts towards structure and scaling.
Whoever sends you a proposal that only talks about campaigns will only work on campaigns. So ask less about the price and more about the content. These five questions sort proposals faster than any price list:
- What concretely happens in the first 30, 60 and 90 days, and how will we know it happened?
- Who works on our account, and how many accounts does that person run in parallel?
- Which target is the account steered on, and who defines it: ROAS, cost of sale or contribution margin?
- Who owns the account, Merchant Center, tracking setup and documentation if we part ways?
- What does it cost to stop: term, notice period, handover?
The actual calculation
Whether an agency pays off is not decided by the price but by what it creates on top. And that can be calculated, if you pick the right number. Revenue is the wrong one, because an agency can also create revenue by spending more budget. The right number is contribution margin after ad costs: revenue times margin minus returns minus media spend.
Worked example
A store spends 30,000 euros a month and generates 90,000 euros of revenue at 40 percent margin, so 36,000 euros of contribution margin before ad costs. An agency at 3,000 euros a month has to lift that contribution margin by a good eight percent to pay for itself. Everything above is your profit. A rebuild that takes brand searches and existing customers out of paid traffic achieves that in most accounts within the first weeks.
This calculation has a pleasant side effect: it makes the billing model almost irrelevant. Once you know how much additional contribution margin has to be there after three months, you can measure every proposal against it. And you have a number you can put on the table on day one.
The most expensive agency is not the one with the highest fee. It is the one still running the same account after three months as on day one.
If you are comparing proposals right now: ask each one for the plan for the first 90 days, in writing. What is not on that page will not happen. And weigh the fee against the number left in your bank account at the end of the month, not the one in the dashboard.