· 1 min read · Bookwell
Management fee vs. ad spend: what you are actually paying for
Two separate bills, two separate jobs. How agency pricing works and the questions to ask before you sign.
Every contractor asks this on the first call, and they are right to. There are two separate costs when you hire someone to run your ads.
Ad spend
This is the money that goes to Google each time someone clicks your ad. It should be charged to your card, inside your Google Ads account. You set the monthly budget.
Management fee
This is what you pay the agency to build, watch and improve the campaigns. It is a separate invoice.
Three ways agencies charge
- Percentage of spend. Common, simple, and it means the agency earns more whenever you spend more.
- Flat fee. The same price each month regardless of budget. This is how we charge.
- Pay per lead. Sounds safe, but check who decides what counts as a lead and who owns the account.
Questions worth asking
- Whose name is the ad account in?
- Can I log in and see the spend myself?
- If I cancel, do I keep the campaigns and the history?
- Is there a minimum contract?
If the answer to the first three is not a clear yes, keep looking.